In the opinion of Ross Whitelaw, computers represent one of the most exciting retail markets on offer and he feels they will continue to do so for quite a few years to come.
His opinion is worth garnering too. After working his way from the showroom floor to the executive offices during an 18-year career with the Waltons Group, Whitelaw spent three years as Australian general manager at Retravision, working up a corporate identity policy and strategy.
This was followed by nine years as merchandising manager for Dick Smith Electronics, where he oversaw the group's annual revenues growth from $50 million to $200 million. Whitelaw also spent a year with the Vox Group (of Chandlers fame) before joining Leading Edge Computers in February this year.
"If you are going to be in any business, you want it to be an exciting and fast-moving industry like computers," said Whitelaw. "There are very few other industries that have the same rapid technological development which we enjoy."
Exciting times in retail
Without wanting to draw too much attention to the number of years he has been roaming the planet, Whitelaw confessed to being in retail during the 1970s when colour television was introduced to Australia.
"They were exciting times," he said. "We are now seeing the same sort of revolution with computers and it is great to be a part of it.
"The distinguishing factor about this industry is its enormous potential for growth. We have so far only achieved a 40 per cent household penetration with PCs and this means there is still plenty of room left in the market," said Whitelaw. "While there are a lot of people now who will never buy a computer, that situation is going to change as the population turns over.
"The penetration of computers is obviously going to grow significantly in the future and that will continue to be an opportunity for large and small retailers," he added.
Whitelaw is of the opinion that the greatest opportunities in computer retailing come from the technology obsolescence factor. "This makes for recurring sales," he said. "At Leading Edge, our whole philosophy is built around retaining a customer for life and ensuring that their computing needs are fully served. It is the retailers who best retain their customers who will be the successful ones in the long run."
Whitelaw claims that as a young buyer for Waltons in the 1960s, his mentor drummed into him the notion that "there is nothing new in retail" and that all you have to do is remember what works. His experience shows that despite rapidly changing product ranges, this theory still rings true.
To sum up the retail industry, Whitelaw refers to a line former David Jones head honcho Brian Walsh issued during a farewell luncheon. "Walsh said that 'retail is detail' and I agree with that," he said. "You really have to pay attention to even the finest detail if you want to be successful in this business.
"The way to grow any business is to continually focus on the basics of the operation," he said, pinpointing things such as customer service, inventories, accounts management and store presentation as being at the core of retail success.
Whitelaw pointed out that a lot of independent computer operators have the mind-set that they don't need to keep a great deal of product on the shelf. He said that the success of superstores such as Harvey Norman and Dick Smith Electronics has been in the mass availability of product and that consumers are now getting used to that sort of shopping experience.
Having recently been involved in the process of watching Leading Edge Computers members stock up for the release of a new catalogue, Whitelaw said that members experienced a spike in sales once the stock was on display, but before the catalogue was released.
"Many of our members have had their eyes opened to the breadth of product that they can sell if they have it on the shelf," he said. "They started to see sales they never thought they would get."
Whitelaw feels another area where a lot of retailers let themselves down is in the presentation of their stores. "Most stores have nice showrooms but they don't have well thought-out retail premises," he said.
"Our experience shows that this is crucial to the generation of sales. Customers remember a shopping experience and if you want them to keep coming back it has to be a positive one. They don't want to go into a crummy shop, they want to shop somewhere that looks good. That is what sells and that is what people are drawn to.
"There has to be some form of what we call the 'wow factor'. That is why companies like Woolworths and Coles-Myer spend billions on the presentation of their stores," Whitelaw said.
Manage your accounts
Account management is another area which needs regular and close scrutiny, according to Whitelaw. "Credit is always going to be easier to get if you have good control over your debtors," he said.
"Retailers have to get out of the habit of funding their customers with credit as this eliminates the cash flow benefits they would obtain by having credit from their suppliers. There is not enough emphasis put on this aspect of business by a lot of smaller stores and I think it is absolutely crucial," said Whitelaw.
Furthermore, he has seen too many small retailers doing nothing but buying and selling in their businesses. He feels it is very easy for retailers to engross themselves in their businesses but it is the ones that step back, have a look at what they are doing from a customer's point of view and then put a little effort into marketing, who can reap the benefits.
"Even simple things like a post-sale follow- up letter, a bonus CD or free voucher means so much to customers, but very few people do it. The ones that do these simple things are usually very successful," Whitelaw said.