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Software retailers facing tough times

Software retailers facing tough times

The continued viability of stand-alone software stores is under question following the closure of Melbourne-based Software Express after 15 years as a specialist retailer.

Software Express managing director Greg Boot said in a press release that shifting market conditions of late had conspired to "make the business unprofitable".

Queensland to continue

While Boot himself has ceased operations at all four Software Express locations - Melbourne, Sydney, Adelaide and Brisbane - the latter store will continue to trade under the name of Software Express Queensland P/L. Its fixtures and fittings have been sold to former manager Denise de la Rue, the statement said.

Boot said margins had continued to spiral downwards and though Software Express had managed to trim infrastructure overheads and operating expenses, it was unable to continue trading on returns of "around 12 per cent.

"We do not see how we can continue with such narrow returns," Boot's statement read, before moving on to say software has increasingly become commoditised and is sold like a "packet of cornflakes".

IDC's Bernie Esner, senior analyst, desktop systems, said the whole channel is in upheaval at the moment and he would not be surprised to see more specialist retailers such as Software Express striking trouble.

He feels software retailers are facing challenges from mass merchants, the Internet and bundles preloaded onto retail PCs.

"Stand-alone software retailers could be an endangered species," Esner said. "If you look at the deals that come bundled in with the best selling retail boxes these days, the cumulative purchase price of the software they come with often means the hardware is more or less free.

"The changing face of this industry means that people have to realise that there are totally different business models to what people have been used to for the past 10-15 years," Esner said.

"Each quarter in this industry is like a year in any other."

Software Express paid all entitlements to staff and, as far as it is aware, believes it has not left any customers "financially affected". Most stock has been returned to suppliers while remaining assets are being realised to pay creditors, the statement said.

The Brisbane store had continued to trade profitably through the turmoil and all three staff there would be retained, de la Rue said. Having overcome some hesitation from suppliers, she has managed to restock and will continue to manage the store herself. She felt there was a positive future for Software Express Queensland.

"The major distributors have come to the party and we have secured supply lines for the majority of popular brands," de la Rue said. "We will have to change focus and we intend to do things a little different but we have a very good customer base and service them well.e-commerce the future"What we really have to do is put ourselves into the e-commerce environment which is where software sales appear to be going. It still has a way to go, but I believe once it starts, it will come as an avalanche," she said.

Asked what sort of customers she will be chasing to secure future viability, de la Rue felt Queensland's education market was "not looked after really well". She is confident SOHO buyers and SMEs will always want human contact when buying and seeking support for their software.

She indicated the challenge is in finding ways to add value for customers at the same time as adding revenue to the business.


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