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Retailers pin hopes on Christmas cheer

Retailers pin hopes on Christmas cheer

If the upbeat nature of distributors and retailers is anything to go by, it really is beginning to look a lot like Christmas.

At the end of a year that has been forgettable at best and terminal at worst, there are many indicators that suggest Christmas will provide some relief for the beleaguered IT retail sector.

Santo Pappalardo, managing director of Queensland-based distributor IT Wholesale, was confident Christmas was "going to be good". There was some "momentum" building, he said.

"Digital cameras and other add-ons seem to be the order of the day," Pappalardo said. "Cameras are definitely fairly hot this Christmas. We have put together some bundles around Apple iMacs including printers and digital cameras and they appear to be popular."

Pappalardo said IT Wholesale was starting to kick some goals in retail under the umbrella of the multinational Cellnet. He feels part of the success of IT Wholesale has been in trying to educate resellers about the benefits of offering pre-proven combinations of products. Those sort of packaged, plug-and-play set-ups, which customers can test drive in the store, come into their own at Christmas, he said.

"My Christmas tip to retailers would be to skill up and to set up displays that allow customers to touch and feel the technology," he said. "The market is looking for a hands-on experience so they know exactly what they are getting.

"There are lots of feet on the street looking for something to spend money on. Customers don't want to spend money, walk out of a store and still struggle to make their purchase work."

John Slack-Smith, general manager of computers and communications at retail giant Harvey Norman, also said the Christmas season was shaping up well.

Christmas and the January holiday season are traditionally strong trading periods for Harvey Norman, he said, and this year quarterly "revenue forecasts were not softened" despite the tough economic climate.

"We have a good run into December and I am expecting Christmas to be strong," Slack-Smith said. "The last three weeks have seen a big increase in the traffic flow in stores, which is very encouraging. Demand has been very good for HP's desktop PC range. That is not to say that part of the business has recovered yet. It hasn't, but it is definitely picking up."

Harvey Norman is also expecting a lot of activity around peripherals and games. "Digital cameras are currently showing the strongest growth of all products at Harvey Norman," Slack-Smith said. "Console and PC entertainment software is also going very well, while mobile phones are proving very resilient to the turmoil in the telco industry."

Slack-Smith said Harvey Norman has just released its Christmas catalogue, which is the largest one of the year with the biggest circulation. "At this time of year, with the extra traffic, it is important we make sure we have the right stock on the shelves -- the best value and the best-quality products that are available."

Hakan Alac, a senior research analyst at Inform, said that with any luck, "Christmas will change the attitude of a lot of buyers" who have been "in hiding" for 12 months.

"Interest rates are low and people have been saving, so I am expecting to see a pretty good Christmas for the IT channel," Alac said. "The big opportunity is in peripherals, upgrade components and accessories. There is a large general pool of installed high-powered PCs in the home marketplace.

"Expect upgrades such as bigger hard drives, more memory, better monitors, LCD displays, games and other software to all be popular presents. Good-quality printers are also continuing to fall in price and that makes them good presents as well."

Alac isn't counting on Christmas stimulating a massive run on PCs through indirect channels. He doesn't believe the next great PC upgrade will kick in until Q2 of next year, although sales will be better over Christmas and the holiday season than it was during most of 2001.

Sasan Rahmani, manager of Adelaide Computer Superstore, said Christmas is traditionally a great opportunity for retailers that have good reputations, good stores and good locations.

Although the retailer hasn't had a great year, Rahmani is confident that things will pick up once Adelaide's CBD opens for weekend retailing during December. "There have been a few indicators that this will much better than last year," he said. "The Federal election is now behind us and I think people are starting to get over the terrorist attacks, so I am definitely expecting a bit of an upturn this Christmas.

"There have been some phone calls and enquiries about a Christmas special we have been promoting, so I am happy."

Rahmani said he is expecting sales of both peripherals and lower-priced PCs to pick up. He added that he has been selling a lot of sub-$200 CD burners so he will be keeping plenty of stocks of blank CDs.


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