INDUSTRY
Q1 REPORT
Consulting for profit Double dip recession getting you down? There is hope, but independents must continue to take a consultative approach to driving innovative and technical product sales. GfK’s Greg Allen takes a look at how certain IT and office products fared in Q1 2012
S
o, the UK found itself in a difficult position yet again in the first quarter of 2012. With the news of a technical recession and double dip, the challenge for technology markets continues to grow. Moreover, with the information that well over a 1,000 outlets selling IT and office products have shut down in the last year (across both retail and B2B), there is still significant cause for concern. With retail and B2B both impacted by lower sales, there doesn’t seem to be much optimism around.
David v. Goliath
Value over volume The IT market may still be struggling on a volume side, but with value there are some good growths being observed. Within retail, of course, the webbook product segment is driving value strongly (up over a 100% on the previous 12 months). More interestingly is the value growth of a number of categories on the B2B side of the market, e.g. webbooks, storage, headsets, software and deskbound computers. So, there might yet be some optimism for the market. This January to March, the storage segment of the market has grown dramatically, now comprising 14% of value in the B2B IT Market. With the flooding in Thailand, it’s to be expected that prices have grown 220% this Q1 2012 against Q1 2011, (up to an average selling price of £196), but the level of demand is still strong enough to grow the category. The deskbound computer segment is also a point of interest, where values are up 21% over the same time period as above. This is being heavily driven by workstations (up 163% year-on-year) and by normal desktop replacements in B2B (up 81% year-on-year). Software continues to drive forward in the B2B sector, with sales towards utility software like security and operating systems.
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JUNE 2012 www.dealersupport.co.uk
“The more technical products that require more consultation are being driven well by the independents ”
When we look towards the independents and multiples, we also see similar trends across the product categories, e.g. the growth in value of storage, software, webbooks, communication devices (like wireless routers) and the negative value trends for netbooks and notebooks is still observed. However, there are some areas which independents are performing better than the multiples like multi-function devices (MFDs), growing at three per cent Q1 2012 on Q1 2011 in the independent channel, compared to -21% in the multiples channel. It seems the more technical products that require more consultation are being driven well by independents. For the independent channel, it must therefore remain a key focus to drive technical, innovative products forward with good consultation. If it can continue to do this and diversify into more product fields, e.g. webbooks, then the impact of outside factors can be (albeit not entirely) diminished. DS
Greg Allen GfK account director, office greg.allen@gfk.com 0870 603 8121 www.gfkrt.com/uk www.twitter.co.uk/gfkrtuk