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EDITORIAL: Coming in off the periphery

EDITORIAL: Coming in off the periphery

It should come as no surprise to anyone that the retail sector of the IT distribution channel has been feeling the pain of the industry downturn as much as the rest of us. Perhaps even worse.

Compared to the heady days of the late 1990s, it is no secret that desktop PCs sales have been dead in the water for most of this year. IDC forecast in June that global PC sales for 2001 would be down by 6.3 per cent on 2000.

Meanwhile, channel researchers have been telling us all year that software sales are in decline along with PCs.

In January, Inform channel research showed business software to be down 14 per cent on December 2000. By March, the figures were down 43 per cent on 12 months earlier and April was down 50 per cent on the previous year. Inform claimed this to be the lowest point for business software sales in Inform's history of researching the market, which started in early 1999.

The winter months of June, July and particularly August -- which rose 43 per cent on a poor July -- saw a little stabilisation but the software market is still as unsteady as the PC sales it is dependent upon.

So if PCs are lame and software is going cold, just where is the next retail meal coming from?

As evidenced by our page one story this week, along with notebooks, it is peripherals sales that are providing a ray of sunshine among the gloom for retailers. Harvey Norman franchisees, always a great barometer on what is happening in Australian IT retail, are seeing noticeable growth in revenues from peripheral devices and accessories.

For the first time ever they are outstripping software sales, and since the peripherals category doesn't include printers, clearly shows there is some movement.

Harvey Norman's success with peripherals should be sending a clear message to all smaller dealers across the country to pay attention to the cross-sell and up-sell opportunities that come with your PC customer base.

It's no wonder the retail community is hoping the launch of Microsoft's latest market dominator, Windows XP, will breathe fresh life into the industry.

One of the universally acknowledged advancements made with this latest-generation operating system is its improved compatibility and functionality in the area of attached devices. XP's purported ability to enhance the PC experience in areas such as digital cameras as well as audio and video is delivering a new generation of PC peripherals and applications.

Smart retailers, both large and small, will work hard on making their customers fully aware of the opportunities Windows XP offers to business productivity, education and entertainment. If they are an existing customer of yours, the chances are they may also require a hardware upgrade/replacement and attachable devices to gain these benefits -- thereby increasing your peripherals sales.

If you want to know what sort of peripherals are selling best for Harvey Norman, stroll into one of its larger stores and look for the most prominently displayed items. Alternatively, keep a close eye on Harvey Norman's catalogues as you can be sure it will be doing its best to capitalise on the opportunity.

That's what a smart retailer would do, and history has shown that Gerry Harvey knows a thing or two about retailing.


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