Chaos theory: Drive in and jive away

Online retailer ChaosMusic has made the transition from the e-commerce world to bricks and mortar with an agreement with the Strathfield Group to sell CDs, DVDs and computer games through its chain of electronics stores.

Despite music being the third most purchased item online, the year-long deal, which has an initial trial period of three months, will see floor space in five of Strathfield's Sydney stores and two of its Melbourne outlets being allocated to the "Chaos Bar".

The deal will allow Strathfield's stores to provide more products to existing and new customers without necessitating a vast increase in inventory, according to Andrew Kelly, Strathfield's CEO. It will also allow customers to select titles from ChaosMusic's catalogue of over 450,000 titles for delivery direct to their homes or offices.

After the three-month trial, the deal is expected to be extended to 80 Strathfield stores nationwide, and will provide cross-promotional opportunities between the companies.

According to Rob Appel, ChaosMusic's CEO, the alliance is "a winning combination for both companies and a way to cross-promote for mutual benefit".

ChaosMusic will utilise its site (www.chaosmusic.com), which receives 1.5 million impressions per month, in conjunction with newsletters, other online and offline promotional programs and its user base of over 55,000 members, to promote Strathfield's range of mobile phones and consumer electronics, with Strathfield receiving a commission on CDs, DVDs and games sold.

"This innovative arrangement gives us an immense retail reach to bona fide music buyers without the bricks-and-mortar expense of establishing an offline chain. Strathfield and ChaosMusic are not in competition with each other in their respective markets," said Appel.

Strathfield will in turn use its Web site (www.strathfield.com.au) to promote ChaosMusic. Strathfield will also use its regular, high-volume direct mail catalogue to promote the music video and game titles.

"This agreement gives us the ability to add a new dimension for our existing customers, as well as driving new customers into our stores," Kelly said. "The alliance now opens the way for us to explore the digital download market as it evolves in the near future," he said.

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