Even before the events of September 11, it had been a tough year for retailers - and for vendors that thought they could make the direct approach work with consumers. After months of speculation, Compaq finally admitted what the channel knew all along - its Connect stores would not work - and closed the operation. Cracks also began appearing in the Apple reseller conglomerate Buzzle early this year, and when talks between the group and major creditor Apple broke down, administrators were called in to pick up the pieces. Just when the dust looked like it was settling, a fly-on-the-wall documentary series on the rise and fall of the group aired on the ABC. It proved great viewing, but the fallout from the failure is ongoing.
Gateway also decided to take its bat and ball and go home, exiting the Asia-Pacific market after a 32 per cent decline in year-on-year revenue in the region.
The final nail seemed to have been hammered into the coffin of pure-play e-tailing as administrators were appointed to take over the reigns of E-Store. But despite criticism from the channel, the administrators continue to operate the business as normal, and have even expanded its call centre and instigated online tracking for orders.
Twelve months is a long time in retail, as we have seen from the on-again, off-again antics between Harvey Norman and Compaq. Just months after the failure of its Connect stores, Compaq and Harvey Norman were back at the bargaining table. Meanwhile, the retail giant announced the end of its consumer relationship with IBM, another vendor that has come under reseller fire for its direct dealings.
With so many high-profile failures, it would be easy to dismiss 2001 as a dismal flop. But while PC sales have been lacklustre, the peripherals market has been booming. Software and games console sales have performed strongly, with Sony's PlayStation 2 selling out in the wake of a significant price drop. Victorian retailers have seen some new entries into the market, with Dick Smith Powerhouse opening stores and Laptop Land also making the move south.
The high-profile launch of Windows XP helped get customers in the door, and retailers have been making the most of the sell-on opportunities the new OS presents. The good news is after a tumultuous year, initial signs among retailers point to a strong Christmas season.