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IT RETAILING: Are We There Yet?

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DQC News Bureau
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IT retail concepts have gone through many transformations over the last decade and a half. While there exists a huge consumer base ready to be tapped via the retail mode, only a combination of key strategies can help retailers reach the desired success levels.

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In my last 15 years in the IT industry, I have seen companies experimenting

with several IT retail concepts. In the late 80´s  when

PCs were just coming into vogue with the introduction of strong national PC

brands, retailers put up outlets to provide visibility for these brands as also

to display and sell peripherals, accessories, books and software.

This was the non-Internet era and these outlets provided the much-needed

touch-and-feel opportunity to knowledge-hungry potential IT users. However, the

initial craze waned off as consumers realized the high premium being extracted

by these outlets. Also, home markets were not mature and hence low business

volumes could not sustain high the infrastructure costs.

CHANGING FACE OF THE 90’S



With the arrival of MNC brands of PCs in the 90´s, a new breed of retailers

came into existence. Most of them were funded by MNC vendors who insisted on 100

percent brand loyalty in return. Retailers were left with little choice but to

succumb to this demand, due to the low RoI on non-funded retailing.

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Retailers

must display maximum brands under a



single roof, to ensure that serious buyers can take


immediate buying decisions and not go elsewhere to


compare between brands.

While this concept did work for certain top brands, margins were under

pressure due to proliferation of these outlets and continuous price wars between

rival brands. In this melee, while the consumer did get the best price, he was

denied the luxury of choosing between rival brands under a single roof.

The same period also saw another breed of mini-retailers proliferating in the

midst of the IT wholesale markets in all major metros. These outlets were

primarily retail fronts for sub-distributors, who leveraged their price

advantage on volume purchases and hence were in a position to provide a variety

of brands to consumers looking for bargain prices.

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Y2K also saw a spurt in web retailing which fizzled out expectedly due to

lack of touch-and-feel and concerns on web payment security

SOME FACTS



So, where do we go from here? Have we collectively reached a consensus on

how to effectively address the burgeoning lot of retail consumers who demand the

best for the least?

Let´s start with a few facts:



l The Web has

succeeded in feeding continuous information and data on the latest technology

innovations and introductions. Potential IT users are sufficiently aware of what

they need to standardize on prior to visiting a retail outlet. On the flipside,

the sea of information has also succeeded in thoroughly confusing the consumer

on which technology he/she must standardize on.

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l Price lists for

virtually every PC component are readily available on the Web. Hence, potential

customers are armed with individual component prices.

l Powerful brand

advertisements by vendors has resulted in excellent brand recall for specific

brands. This has also provided variety for consumers to choose from.

l New product

introductions are in sync with worldwide launches. Hence, customers demand the

latest at the lowest price.

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l After-sales service

support has become a priority. Consumers seek foolproof assurances on this

count, prior to making a purchase decision.

INGREDIENTS FOR SUCCESSFUL RETAILING



Given the population demographics, the next few years will see a flurry of

new retail consumers entering the market for technology product purchases. These

will consist of highly informed persons looking for mature retailers to make

their purchases from. So what are the possible ingredients for successful

retailing :

l The retail outlet

must cover sufficiently large floor space to provide potential customers with a

hassle-free atmosphere and for them to be enthused to spend the requisite time

required to make a buying decision.

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l The informed

customer needs choice. Retailers must ensure that they display maximum brands

under a single roof so as to ensure that serious buyers are in a position to

take immediate buying decisions and not go elsewhere to compare between brands.

l Proof of concept

centers must be set up and trained sales representatives must be at hand to

unravel technology issues, making it easier for customers to select the

technology most suited to their individual applications.

l To provide a

feel-good factor to potential customers, the retailer must act as a single point

support center for all products sold. Customer relationship executives must be

assigned to each customer as single point contact for all post-sales service

support. Regular service camps must be organized in league with vendors.

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l Retailers must

advertise value-added services like technology consultancy, buy-back programs,

on-site installation and training, Web-based technology updates and finance

options.

l Conduct continuous

in-house technology awareness programs in the vicinity through impromptu

roadshows, competitions, contests and the like.

l Maintain competitive

prices to suit customer expectations. Retailers selling at high price tags get

negative word-of-mouth publicity and attract few repeat customers.

l A separate section

for accessories, gaming products and gizmos to appeal to children and home users

with experience zones to build a traffic of potential buyers.

l A future technology

corner where vendors can provide sneak previews of upcoming technologies and

products. This will ensure repeat visits from customers seeking newer

technologies or wanting to upgrade their existing products.

l Complimentary

product offerings for family audiences.

PG Kamath is GM, Lexmark

International (India) Pvt Ltd

BOTTOMLINE



There is never a single mantra to get things right in one go. All one can

say is that, this is indeed the right time to experiment and come up with a

workable formula, either singly or collectively, to tap the excellent market

opportunity that will unravel in the near future.

The cellphone boom is on. Can the retail IT boom be far behind? It´s time to

sit up and take notice! Retailers can invest safe in the notion that ultimately

vendors will back those that are close to the end-customer.

PG Kamath is GM, Lexmark

International (India) Pvt Ltd

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