Online resellers' sales to octuple

Online resellers' sales to octuple

CIOs and IT managers are rethinking the way they want to buy from resellers, according to a recent survey conducted by channel research company Inform.

The survey, called Channel Performance 2001, claims up to a third of senior IT executives are planning to make the majority of their IT purchases over the Internet by 2002. Inform's research suggests that currently only 4 per cent of IT execs conduct the bulk of their company's IT purchases via the Web, a figure Inform believes is set to increase eight-fold in two years.

Large corporates are the most likely to adopt online procurement, according to the survey. Which means resellers that sell into the big end of town may have to "fine-tune" their online strategies to accommodate the shift in buying attitude.

Around 63 per cent of companies with an annual IT budget of $5-10 million, and 46 per cent of companies with an IT budget in excess of $10 million surveyed for the report, claim they will be purchasing the majority of IT goods online from resellers by 2002.

With the channel touting services as the big money spinner, the survey reveals corporate execs will be taking a conservative approach with online procurement. Inform claims the tendency for companies will be to buy lower priced commodity and consumable-style products online, while still meeting face-to-face for expensive and complex purchases.

Harris Technology was voted most popular Web site by the respondents, revealed Katie Wilkins, Inform project manager for Advisory Services and Tailored Research, who compiled the report. The reasons obtained from the survey were the scope or breadth of products, price and its ease of navigation. This may put pressure on smaller resellers that do not carry the product range or have the funds to spend on an efficient site, believes Wilkins.

"Our feeling is that besides the really large resellers, many [resellers] don't have the e-commerce facilities on their Web sites for one, and secondly they are not as slick as they could be," claimed Wilkins. "When we talk about e-commerce as a general term, you also have to consider the marketing dollars it takes to draw people to the site."

Wilkins believes that while companies will start procuring more commodity-based IT products over the Net, margins will not necessarily fall further. However, the cost of a sale for the reseller will be to reduce by online transactions, which will increase a reseller's overall.

"Resellers can really excel on customer service," claims Wilkins, an area she argues manufacturers have not been strong in.

The survey also reveals the number of companies not planning to purchase IT goods online by 2002 will reduce from 74 per cent to 34 per cent. Meanwhile a minority (13 per cent) of dyed in the wool IT execs plan to cling to traditional purchasing methods.

Inform's survey went out to 5000 IT executives with 230, or 4.5 per cent, responding.

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