GE’s cyber catalog sells ultrasound, MR, and other major platforms

GE Medical Systems is boasting that its newest marketplace for selling MR, ultrasound, mammography, and other diagnostic imaging equipment—the Internet—is producing out-of-this-world sales.

For nearly two years, GE’s www.gemedicaldirect.com Web site has let customers order accessories to go with all its imaging modalities. Last August, the company added ultrasound, and in November, MR hardware. The site now offers more than 6000 products.

GE’s competitors and medical equipment distributors such as Philips, Siemens, and Marconi all have plans to launch e-commerce sites in the near future.

GE’s site is set up so that when a customer enters a password, he or she can read information about a piece of equipment, buy it, and order accessories and training information to go along with it. The site is an extension, rather than a replacement, of the traditional salesperson, said Lisa McClung, GE’s director of global e-commerce.

For example, if an obstetrician wanted to buy a certain ultrasound model, he or she could find out what accessories go with that device. If that doctor has ordered from GE before, GE has the doctor’s ordering history in its database.

Or a user can log on just for information. Doctors can use the Web site to find out about a product before a salesperson makes a visit, McClung said. Questions can be e-mailed to a GE staff person familiar with the equipment.

The site is like a store. Details of promotions are flashed on a colored bar above the marketplace screen, and some items are listed as “specials” or “Internet features” of the month.

Not all products offer all that information just with one click, however.

“We are in a process of transition,” said Diahann Boock, creative director with GE’s e-business. “Some products have more information (available) than others.”

GE boasts that it sold 17 Signa OpenSpeed MR systems through its online store. The Signa OpenSpeed, which is a high-field, 0.7-tesla open system scanner, was unveiled at last year’s Radiological Society of North America convention (SCAN 11/24/99). The OpenSpeed won’t be available for delivery until July, but GE has taken purchase orders for 17 of the highly complex machines.

“We’ve recognized the order, but we haven’t recognized the income,” said Pam Passman, GE’s customer center manager. Passman said customers knew they could purchase the OpenSpeed via the Internet from information at the RSNA show.

If customers don’t finance the $1.5-million machine through a special arrangement with GE, they must put $100,000 down, send another 15% 120 days before shipment, pay 75% on delivery, and the balance at installation.

Information on the rollouts of OpenSpeed and other equipment was passed along to industry followers at the RSNA show.

“Customers were able to place orders online (for OpenSpeed) before they were able to place orders with their sales representative,” Passman said. “It was a way of promoting the product.”

GE did not have any information available as to whether this venue would cut into its sales force, and no information about its latest sales numbers from the Internet is available. The company made about $6 million within six weeks of launching the site that contains the more expensive platforms, McClung said in an interview at the RSNA meeting.

Customers have jumped on the opportunity to buy medical equipment over the Internet because of the convenience, Boock said. “The marketplace has been waiting for this for a long time.”

This theory flies in the face of the experience of one radiology industry analyst, Robert Bell of R.A. and Associates in Encinitas, CA. The Internet is an unlikely venue for selling MR, ultrasound, and other scanners, Bell said, because these large pieces of medical equipment are consultative sales—not commodity sales—that require extensive interaction between customer and salesperson.

“I don’t see those big-ticket items being amenable to e-commerce,” he said.

At press time GE could not identify a customer who had bought anything as big as an MR or ultrasound over the Internet.

Customers may be more confident buying accessories such as film and probes over the Internet, but because these items are usually sold in packages or through group sales, selling them over the Internet could undercut traditional sales forces, Bell said.

“A lot of (business) relationships are in jeopardy if a company goes out and sells on the Web, adding major discounts,” he said.

Other companies said they are developing e-commerce sites. Officials at Siemens, Philips, and Marconi were quick to point out that doing business via the Internet is more complicated than just launching a catalog site.

Marconi’s healthcare products division will have an Internet catalog site up by the beginning of the second quarter. The Internet may be able to help Marconi reach out to customers it hasn’t reached in the past, such as small clinics, said Daniel Lamb, Marconi’s communications manager for the healthcare products division.

There are also challenges to the just-click-and-spend convenience of the Internet, said Dr. Ajit Singh, Siemens vice president of managed healthcare services.

“Medical devices are not commodities,” Singh said. “Each purchasing decision satisfies a particular clinical, technical, or financial need and these needs vary from market to market and user to user. This makes the purchasing process more complex, and this degree of complexity is difficult to overcome in a basic e-commerce site. This would suggest that a high degree of personalization and potentially ‘human’ intervention is still required today.”

Philips will launch a pilot e-commerce site at the end of March that will carry its x-ray product line, said St. John Brown, Philips’ director of e-business strategy development.

Asked if Philips plans on making a profit or increasing sales via the Internet, Brown said the company will use the Internet to reach customers less expensively and more effectively, and that it should help Philips reduce costs within the company.