Retailing On The Upswing

Most vendors would agree that the main objective of opening any retail outlet is to reach out to the SOHO market with a complete offering of home computing solutions. Retail outlets have traditionally catered to the home user but the market witnessed a sudden boom with distributors and resellers opening a number of retail outlets within a short span of time. Not only that, vendors are coming out with their own retail policies. Does that mean that retailing has come of age?

“Yes”, says DS Batra, CEO, Computer Land, which has just opened one more Compaq retail outlet in Delhi. “The market has seen a transition from the one per desk concept to one per home concept. The idea is to cater to different localities. It is still a relatively fresh and untapped market and it’s going to increase over the years.” Computer Land plans to open four more outlets in Delhi alone – the numbers, says Vinay, are a clear indicator that Delhi retail market is huge.

Guidance for the customer

According to Neelam Dhawan, Director (Sales), Compaq Computers India Pvt Ltd, the retail outlets aim to guide the consumer and help him choose an appropriate PC, based on individual requirement and usage. The other reason for the boom in the retail segment, say vendors is that the consumer likes to touch and feel the product before buying the product. The retail network presents the right ambience and opportunity for consumers to do this.

The biggest advantage, however, vendors believe, are the huge margins. With margins shrinking rapidly in the market, the retail business has brought in some relief to resellers. “The shrinking of the chain definitely helps in profitability,” says Gautam. Agrees Vinay Kwatra of SD Computers Ltd. He added that the margins from retail showrooms are high, as are volumes. “We have a target of 80 HP machines per quarter. Besides, we have sold almost 40 machines through one retail outlet in the last month and the demand is only increasing. 53 machines have already been booked,” he said.

Not an easy task

However, some retailers believe that selling the product through retail outlet is not an easy task. Gautam Khandpur, CEO, Integral Shoppe says that when a product is sold through a retail outlet, it is not an end but a beginning. “Customer beyond a transactional point wants a value add which we have to provide through after sales service support.” He expatiated further that retail involves a completely different set of skills to attract the customer. “ The customer today is very IT savvy, therefore, the retail manager is a very important person.”

Promotional activities drive retail business and generate traffic. iMost of the time, vendors run promotional activities but sometimes retailers also run their own promotion. “Promotions are run after we take feedback from cross section of retailers on what excites a consumer but the management and implementation is totally done by HP,” said JT.

Compaq, on the other hand, apart from providing product related support, works with the channel partners on in-store branding, sales training and joint promotions. Compaq frequently conducts training programs for dealers and retailers on various modules to help them understand customer behavior and ensure store traffic.

Says Gautam, “Almost 15-20,000 is spent every fortnight on promotional activities. First year is very crucial but once a clientele is built, ‘walk-ins’ becomes an easy job.”

However, Batra believes that walk-ins are the natural flow and they don’t do much about that. “Initially, yes, one has to go in for promotional program but later walk-ins happens by word of mouth.”