Editorial: Something to chew on

Editorial: Something to chew on


As far as the digital home concept is concerned, the consumer IT channel still seem to be divided into two pretty distinct camps - some see it as another potential revenue stream and are keen to embrace it; others have already decided to give up the ghost and leave it to the mass merchant channel.

For those who do see it as an area of potential, the Digital Dog concept announced by Dicker Data last week looks like a real opportunity to dip a toe in the water (see page1 of ARN, october 12 edition).

To my mind, the vendor community has not done a brilliant job of involving the IT channel in the digital revolution to date and resellers have so far lost more than they have gained from the convergence trend. There have been some good reasons for this - new markets have to start somewhere and concepts are much easier to promote in the large demonstration spaces that are available in a Harvey Norman or Dick Smith PowerHouse. Even a high street consumer electronics retailer tends to be a roomier affair than your local IT shop.

But, for the sake of the consumer-facing IT reseller, that has to change. With hardware margins having settled at miserly levels for some time now, with little or no prospect of rebounding, there are many resellers out there that need to find a new revenue stream. The provision of services has long been identified as one significant avenue but consumer electronics, with its fatter margins, are just about as attractive as a desert oasis.

The Digital Dog scheme provides dealers with a fairly low-risk way of adding a convergence string to their bow. All resellers will be asked to provide is the staff to operate the booth, which could be viewed as a valuable training investment. After all, part of the reason many of the consumer electronics giants have been reluctant to display their wares in IT shops is because of the perception that tech resellers have historically sold products on speeds and feeds whereas the CE channel has built its selling skills around desire creation.

By getting staff trained up to operate one of these digital kiosks, resellers would be building valuable skills within their business that could then be transferred into their main store. It is the thin end of the wedge but could well be significant in breaking down vendor fears that the IT channel cannot be trusted with high-margin consumer electronics kit.

I have no doubt that the floodgates will open and the IT channel will get to carry a much broader range of digital gadgets. The main question is how long that process will take and this new Dicker initiative can only help the cause.

One worry from Dicker's perspective would be that providing dealers with easy access to the scheme could see it building a channel that lacks commitment. Furthermore, all new concepts face the problem that you can never quite tell whether it is a good thing or not until the public votes with feet and wallets.

But let's hope the Digital Dog can wag its tail and help the IT channel to take a bigger bite of the convergence market.

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