IT markets are rapidly changing with the inflow of various kinds of products and technologies. Just take a look around your office desk. Dual-colored monitors and multi-colored cabinets have become the norm of the day. 

Manufacturers of PCs and peripherals are giving as much emphasis on aesthetics as on the technology behind it. Products like modems, joysticks, gaming solutions, software, floppy diskettes, CDs, webcams, digicams, headphones and consumables are getting into the retail segment in a big way.

In a market inundated with different types of products, there is a need for end-users to understand products in sync with their requirements. Customers also want to have a touch-and-feel of these products. It is here that IT retail has to play a very important role. 

Interestingly, slowdown in the IT market has also given a fillip to its retail in India. It has brought channel margins under greater pressure and forced partners to move up the value chain. This has indirectly led the consumer to go in for more value additions. 

The definition of value-addition has certainly undergone a sea change. A simple warranty with good after-sales service is no longer looked as a big value-addition. In this competitive market with myriad options, end-consumers are always asking for more. 

VENUE OPTIONS
In terms of value-addition, retail venue options allow consumers to buy products according to their need. Broadly, there are four categories of retail venues.

Brand Shop: It is a retail shop associated with a single brand and displays all products of one company. This concept is gradually picking up in India. However, this kind of retailing is successful only when the brand being sold has indisputable credentials, and customers have full faith in the brand. 

The advantage of this category is that brand-loyal customers get to see all products under one roof. Moreover, the retailer also gets exclusive attention from the principal or the vendor. 

Multi-Product Retail Store: This system is more prevalent in India at present. Here, unlike the exclusive shop, it is associated with multiple brands. These stores give customers more options and is generally a good place for buyers who do not associate with a single brand. 

Shop-in-Shop: This category can be defined as a hybrid of the above two categories. Exclusive space in the same shop is earmarked for different products and brands. This category is quite advantageous from the retail owner perspective, as every brand owner’s will include the retailer in their promotions. It also facilitates enhanced walk-ins. The customer gets to see exclusive options under the same roof.

Web Retail Store: This can be classified as the virtual store on the Internet. It is very easy to set up this store at a low cost. However, there are many limitations to it. On its own, this kind of a set-up has problems in getting customers. Lack of Internet penetration and proper e-commerce infrastructure are some constraints to this model.    

THE KEY INGREDIENTS
There are certain factors that are common to all retail outlets. The changing scenario requires retailers to look at ideas that will help them in their business. Therefore, it becomes pertinent to look at the following factors involved in IT retail.

Retail Space: This is the very foundation of any retail set-up. There is a lot of speculation regarding what should be the location of the retail outlet. Should it be centrally located? How much should one invest initially? And so on. 

To start with, a rented space is better than a self-owned one, as it saves a lot on the working capital. Moreover a prime location is not very important.

In-shop Décor: This factor is of great importance in IT retail as attractiveness of the shop is dependent on it. A good shop décor creates a pull factor for customers and can even attract window-shoppers. In this, the retailer can seek the support of principals, as the investment is generally a one-time factor. 

Display Product: Product display is also a very critical part of IT retail. Here, retail outlets should display the whole range of products. Moreover, emphasis should also be on displaying accessories and trendy hardwares. The idea behind this is that the customers should get a good feel of the range of products.

In-shop Demonstrators: All efforts of a good retail outlet would be in vain if the shop does not have good sales people. Since the needs of every consumer is different, it is important for the sales staff to understand and recommend products best suited to the customer’s need. Principals could take the initiative to train the respective sales staff on their brands. 

Security Systems: Since retail shops have high value products, security of the shop is a must. A CCTV and magnetic decoder alarms are most recommended here. The retailer should also display dummy samples of tiny products.

High Marketing Cost: This is one aspect which requires retail owners to do meticulous planning as sales depends on right marketing strategies. The idea behind good marketing should be high visibility at low cost. Here, retailers can look for co-op funded promos with principals and vendors. Moreover, low-cost promotions like paper inserts, outsourced tele-marketing and cable TV tickers can also be used. Further, game events, movie shows and free Internet browsing can also attract end-users. 

VALUE ADDITION: KEY TO SUCCESS
In this highly competitive market scenario, the line between winners and losers is very thin. The retailer has to keep in mind that any customer, who is keen on investing a substantial amount on PCs and accessories, will have some expectations in mind. 

The partner’s policy should always be aimed at meeting and exceeding these expectations. Warranty and after-sales services are no more the yardstick for measuring customer satisfaction. Retailers have to find alternative means and ways to generate better sales.

It is important to provide customers with need-based budget-centric solutions, rather than thrusting a product on them. Along with assembling the whole PC right in front of the customer’s eyes, exclusivity in selecting software, games and hardware can also help in securing business. The essence of IT industry will now be to make the whole sales affair as interactive as possible.

R MANIKANDAN  is the Deputy GM, Sales & Marketing-IT Product, LG India.

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