What was initially looking like being one of the worst Christmases for retailers turned into a highly profitable silly season, according to those that spoke to ARN last week. What's more, the potential for January and February is keeping those smiles plastered on most faces.
Harvey Norman achieved an exceptional 35 per cent increase on last year's figures, culminating in forty million dollars worth of computer goods sales.
According to Tony Gattari, Harvey Norman's computer and communications manager, there were a couple of surprising triumphs and failures.
"A lot of computers were purchased right before Christmas which was unusual, as people generally don't buy big ticket items at this time. I put it down as second and third time buyers knowing what they want." Gattari also commented that price slashes from big brand names have made the PC into more of a consumer commodity.
"However, there were still areas that performed much worse than had been expected.
"Play Stations and Nintendos were obviously a big success but games on CD-ROMs were a big disappointment, probably because of the effects of piracy on the market," Gattari said.
Paul Corning, country manager for Diamond Multimedia, agrees with Gattari that consumers were waiting until the last minute to make purchases, causing many retailers to readjust their profit predictions.
Yet despite this, IT retailers seem to have affected a turn around by concentrating on what Corning describes as "legitimate, good services and a good return policy". Corning believes that chain merchants will not necessarily dominate the retail market if smaller operators continue to provide good service.
Mid-level Sydney-based reseller Harris Technology epitomises this attitude and recorded four million dollars worth of sales over the December period. According to managing director Ron Harris, the massive 70 per cent increase in sales over last Christmas was in large part due to the 10 per cent contribution of electronic sales.
Harris was also surprised by the lack of business in early December but was buoyed by exceptional takings from the SOHO market between Christmas and New Year.
Both Gattari and Harris are expecting consumer confidence to continue into the new year.
Harvey Norman established a two- year interest free period which ran until January 18th and accentuated the deal with the release of its signature brand PC for under $1000.