Motherboards and processors are scary. Let’s face it: the majority of customers passing your shop are unlikely to be willing to dive into the innards of their PC, making the job of selling these key components that much harder.
Even Keith Warburton, the chief executive of the PCA, admits in his column this month that he wouldn’t dare enter his PC’s case. And when someone who works in a senior position in this industry has doubts about getting into their PC it’s worrying for retailers trying to sell components.
I found it a long, arduous and confusing process when I last upgraded my PC. All those different sockets, standards and speeds – it’s a wonder retailers even sell components at all.
It’s a point that Realtime’s purchasing director, Julie Darrington, picks up on: "PC prices are now so low that some customers are more inclined to ditch their old PC and buy a new one to avoid the complication of upgrading individual components.
"Retailers need to educate inexperienced PC users about the benefits of upgrading, which can often save them money. For example, by pointing out that their old desktop PC may only need an extra stick of RAM and a higher end graphics card to run Windows Vista and play the latest games.
VIP’s purchasing director, Duncan McAuley, thinks one of the best ways to capitalise on this is to target customers when they come in looking for a new PC. He suggests: "Retailers should point out to customers the cost savings that can be made from adding some extra RAM or a new processor, rather than replacing the whole PC system."
Find out what the customer wants
However, Nvidia’s channel marketing manager for EMEA and India, Chris Ayres, warns that it isn’t a good idea to force a sale for the sake of selling. "The first step for any retailer is to identify whether a new component is the most appropriate solution for the customer’s needs. It may be that a new system is actually the more cost-effective and worry-free solution. Pushing customers into component purchases which may not meet their needs is no way to win their loyalty."
McAuley agrees: "Retailers should find out what the customer intends to use the system for and then suggest the lowest cost option to them, which in many cases will be upgrading rather than replacing. The retailer benefits from the goodwill of the customer, who has saved some cash by upgrading, and will often make more margin on the upgrade components themselves."
Indeed, the difference in margins is staggering, and the fact that this route isn’t taken by more retailers is even more surprising when you realise that the margins on components are sometimes hundreds of times more than that of a new system alone.
But as Ayres warns, components aren’t the solution for everyone. "Two main factors will influence a customer’s choice of components over an entire PC: budget and expertise.
A component purchase is often easier to justify in terms of performance gain for money spent. Forking out £300-plus on a new PC is a decision that may some take time – a sub-£50 component which will give them the results they want from their existing system has instant appeal.
Avnet’s sales manager, Sukh Dhillon, echoes the point, adding: "Memory should be the first thing retailers recommend to consumers as it has the greatest effect on performance and is generally the easiest for users to install. DDR2 memory is cheaper than ever so there’s never been a better time for customers to upgrade."
Memory, however, can be one of the most confusing components in a system. Luckily, the likes of Kingston and Crucial both have diagnostic tools that can, most of the time, tell you what RAM a computer has, making it easier to upgrade than some other components.
Indeed, it’s the perceived difficulty of upgrading that is the major barrier to people purchasing components, as Darrington explains: "The type of PC users that only need a PC for working at home and playing the odd game are likely to be terrified at the idea of opening up the box and messing about with the components inside.
"While the design of modern PC cases means upgrading is easier than it’s ever been, it’s still off-putting for the majority of basic PC users," adds Darrington.
McAuley echoes her point: "Many consumers are put off upgrading due to the perceived difficulty of opening up the case and changing the components themselves. With the cost of new desktops and laptops at an all time low, inexperienced consumers often choose to replace the whole system, as they see it as being less hassle."
Ayres strikes the nail on the head: "A lot depends on the customer’s level of knowledge and confidence in performing the upgrade. A seasoned gamer may think nothing of installing a new high-end SLI motherboard to take their two new GeForce GPUs, but for many people even the idea of opening their PC is alarming."
It’s not surprising to find out that many of those retailers we spoke to when research this article told PC Retail that probably about 90 per cent of those people who bought components were gamers of one sort or another.
However, Dhillon suggests that retailers look to add value to their services, with ways of reducing the fear most consumers feel at the prospect of opening their computer. "There will always be some customers that are confident enough to install their own components. However, many would rather this was done by a retailer or PC support company.
"By offering this additional service, the retailer can support that customer over the machine’s life, and with a positive experience there are a myriad of supporting products available to extend the life of their aging PC."
It’s a point Ayres echoes: "Installing a new GPU is relatively simple, but the addition of a new motherboard adds more complications and potential risks than many consumers are comfortable with.
"For people who wouldn’t normally consider buying components, the biggest barriers are fear of damaging the product and their system with incorrect installation and a lack of knowledge about what upgrade they need to achieve the performance they want. Retailers can put themselves in a good position to address both these issues."
"While larger retailers may have the edge when it comes to big brands and choice in complete systems, smaller companies can stand out by providing a more personal service, giving customers the expertise and confidence they
need to upgrade.
"Where the infrastructure exists, it can be very beneficial for retailers to add value by providing an installation service. If a customer can buy the right component, have it professionally installed and still save money over the cost of a whole new system, that’s an attractive proposition for even the most hardened technophobe. Giving customers the right support at the point of sale can also reduce the demand for after-sales assistance.
Darrington agrees: "Customers will always be grateful if you can save them some money with an upgrade rather than a whole new PC, but retailers can also cash in by offering to install the components for them, for a small price."
Avoid the bungle… Bundle
But the fact is, even seasoned professionals can find themselves two, three hours down the line and still none the wiser as to whether the processor they are looking at will be 100 per cent compatible with the motherboard they have their eye on. And consumers might be put off by the myriad of different sockets, standards and compatibility issues even before they get to the point of worrying about the cost. Putting together a Lego set is relatively easy, building a PC is a lot more complicated.
Luckily, computers have gone through a period of some stability when it comes to sockets. "Currently mainstream CPUs are fairly stable in relation to their compatibility – AMD’s Socket AM2 platform has been with us for a while now and is set to continue for the foreseeable future," explains Dhillon. "It’s a similar story for Intel’s Socket 775 platform. This stability means customers and retailers can be confident that choices will be compatible with the majority
This is where the concept of bundling comes in. More often that not, a consumer looking to upgrade their PC’s processor is going to need a new motherboard because the socket will be different.
Bundling compatible motherboards and processors can not only provide an attractive package to the non-technical consumer, but create a significant margin maker.
Another thing that retailers can do is rely heavily on the like of sales support companies such as Retail Profiling, which works with vendors to keep stores up to date with the major selling points of new technologies.
Retailers can also use the wealth of advise and knowledge that their distributor’s sales teams possess, as Dhillon goes on to explain: "The biggest barriers to selling components are the number of options, the speed of technology change and the pricing.
"At Avnet we have a specialist components team who are able to advise which key products should be stocked, and can even advise on planned future manufacturer price changes so retailers can manage their stock effectively."
The green argument
Green issues are also becoming a lot more prominent, and for those looking for a new angle to sell components, the environment card is one that is becoming increasingly lucrative to play.
Dhillon continues:"As consumers become increasingly aware of environmental issues, the green angle is also one which can benefit component sales.
"A component purchase is a much more environmentally sound option than buying a whole new PC. In addition, many new products are manufactured to meet more stringent environmental standards, using fewer environmentally damaging substances and consuming less energy. This can be a compelling sales tool for the well-informed retailer."
Gigabyte’s latest motherboard is one of the most environmentally friendly components to hit the market to date. Explaining the benefits to consumers, Gigabyte’s chief executive officer Johnson Lin says: "With more than one year of intensive design and testing, Gigabyte’s Dynamic Energy Saver represents a truly amazing revolution in motherboard development. With one little click, users are able to take advantage of up to 70 per cent CPU power savings without sacrificing computing performance. Imagine the potential for power savings on a global scale if every motherboard in the world was able to provide similar power savings."
A PSU of the pie
When people are upgrading their old ‘off the shelf’ PCs, it highly likely that the power supply unit that the computer came with will be unsuitable for the job – especially if it’s being given a huge power boost. And of course, the last thing that consumers want when they’ve spent hundreds of pounds on new components is to realise that 18 months down the line they have to do it all over again. But with a bit of smart work on your behalf, you can find solutions that solve those sorts of problems, such as Enermax’s new PSUs.
By the end of February, Enermax is to release a new range of mainsteam power supply units called Modular 82+ and Pro 82+. Designed to be ‘Future Ready’, it means that when the next batch of up and coming graphics cards reach the market, consumers won’t have the headache of having to upgrade their PSU again. They’re one of the first on the market that complies with Intel’s latest ATX12V v2.3 design guide, meaning your customers won’t get any nasty shocks when they look at upgrading again.
They have also been designed with cabling in mind. Anyone who has built a PC before will know how much of a pain cabling is. The Modular 82+ series comes with advance cable management, allowing those that who would otherwise spend extra money on cable tidying systems can save themselves some money.