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EDITORIAL: Christmas wishes

EDITORIAL: Christmas wishes

An old saying affirms that Christmas comes but once a year. But by all reports from the channel, last year it didn't come at all. Meanwhile I guess some could be forgiven for thinking that during the latter part of the 20th century, the IT industry saw all its Christmases come at once.

Christmas time is a major anomaly in the ledgers of businesses in the IT distribution channel. For retailers it is traditionally a time of year when the tills start ringing to a jazzier beat and perhaps it serves up the biggest single opportunity that comes around each year. However, for other channels it is an annual sales plunge.

This year, which started badly for many and just got worse, a Christmas tickle for the retail channel would be most welcome. During the last Yuletide, some retailers reported sales to be down by as much as 50 per cent on the previous year as consumers reflected on their Olympic and pre-GST splurges.

Christmas 2000 also lacked a champion product to drive people into stores as price-slashed PlayStation gaming consoles did in 1999. This year is different with the high-profile launches of Intel's P4 processor and Microsoft's Windows XP OS.

Prices on popular peripherals such as scanners, burners, printers and cameras are also rapidly falling, which all adds up to home and small office consumers again having a reason to walk into their local IT retail store.

Harvey Norman's John Slack-Smith hit the nail on the head in our page one story this week about the channel's confidence in the coming Christmas. He identified the main challenges for retailers at Christmas as being the building of store traffic through effective marketing and then having the right stock on store shelves when punters arrive.

Christmas, however, is not such a good time for other channel communities. As Isaac Newton discovered a few hundred years ago, for every action, there is an equal and opposite reaction. Retail stores are full of people because so many workers are on annual leave. All those people taking a break tends to reduce demand from the corporate sector, which means that while retailers are busy, other dealers and integrators hit their traditional slowdowns.

This effect could be intensified this summer as companies insist their staff take annual leave as a prudent accounting measure. Not having to hold employee entitlements in reserve helps the bottom line of FY2001's closely monitored business plans.

As a result, the slowdown in corporate channels around January may be a little longer and deeper this year. The only upside is that companies get an opportunity to take a long hard look at the books and the market in preparation for the new year.

Effective review and planning is something many businesses never get a chance to undertake - more so in times of economic uncertainty. Without phones ringing all day and with fewer staff around the office, peace and quiet can do wonders for focusing on business direction, evolution, growth and viability.

It is a good time for this category of channel player to undertake a full SWOT (strengths, weaknesses, opportunities and threats) analysis with a view to maximising readiness for meeting the changing demands of customers. Alternatively, it could be the right time to take the vacational tonic that many have been avoiding for years because of work overload.

Whatever Christmas means to the huge variety of businesses in the channel, it is always a different time of year with different challenges. The beginning of December signals that Christmas is just around the corner, and everyone in the channel should be ensuring they make the most appropriate use of its economic impact.


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