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Expo fine-tuning mix.

ADDISON, Texas -- Three months after the first Communication Expo store opened here, executives say some product categories are flourishing, but others still need find-tuning.

The company is still studying what works and what doesn't at the 21,000-square-foot store that opened in this Dallas suburb in August. The superstore, which marries communications and computing, is a prototype for stores to follow, the second of which is set to open in Arlington, Texas, in the first quarter next year.

The store is doing well with telephones, and computers when value-added packages are promoted, but just so-so in the paging category, according to Michael Flink, senior vice president of merchandising.

"We are doing well in categories that require the consumer to see and use the product, like computers that need to be demonstrated," he explained.

Communication Expo is the first in a planned chain of 150 stores expected to be in operation by the year 2000.

The store carries more than 4,000 products from more than 450 brands, and most products can be demonstrated.

Flink, prior to the store's opening in August, predicted the telephone category -- especially PBX, or business telephone systems -- would be a big seller. And that seems to be coming true.

"We are doing very well in the telephone category," said Flink.

That could be because the goal of Communication Expo is to help satisfy the needs of the small business user, who has really not been served at retail, according to Flink. Until now, the only way to buy business telephone systems has been through small dealers or directly from the manufacturer.

Flink said, judging by the customers, Communications Expo is meeting those needs. "The mix of customers fits our projections. We are seeing a heavier small business crowd and upscale consumers."

"I am surprised at how fast and how big the business market is [at the store]," said retail analyst David Goldstein of Dallas-based Channel Marketing, which is conducting research for Communication Expo in conjunction with the opening.

There are plans to improve the telephone mix, which makes up a majority of the store's SKUs, with 380 types of land line (as opposed to cellular) phones. Just how the store will do that, Flink did not say.

And, contrary to expectations, even fashion phones -- which management thought would be impulse buys -- are doing well. "There are certain phones that people just love, like the train and plane phones," he said, noting Kash 'N Gold's Telemania fashion phones do very well.

Sales of certain telephones, such as high-end 900MHz cordless phones and two-line phones, are "spotty," Flink reported.

In computers, value packages sell well. Promotions such as one Hewlett-Packard ran recently -- a computer bundled with a monitor and printer for $499 -- do well, said Michael Henochowicz, vice chairman and executive vice president.

"It's harder to follow the computermarket than any other category," Flink noted. "We haven't nailed the product mix down yet."

Paging is doing only mediocre business, said Flink, who added that originally the store "went after the advanced user with higher-end products like alpha pagers with larger memory capacity. "We've looked at it [paging] and said, 'There's a better way to go.' We're going to focus on positioning alpha as wireless e-mail," Flink continued.

There are plans to make promotional in-store signs bigger and easier to see, Henochowicz said.
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Title Annotation:Communication Expo Corp.
Author:Silberg, Laurie
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Nov 25, 1996
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