Distribution is at the heart of the IT Channel, and Tech Data has spent the past 43 years establishing itself around the world. Jonathan Easton speaks to group marketing director for UK and Ireland Andy Dow, and director of logistics Simon Coldwell about the Channel’s evolving landscape.
How has the first quarter of 2017 been for Tech Data?
Andy Dow: Following the recent acquisition announcement, a good deal of focus has been on the integration of the Azlan Technology Solutions business. It’s important to get that right of course.
Otherwise, it is business as usual and the areas of most activity have been around the Cloud, and Microsoft CSP in particular. The whole area of consumer technology, in which the lines between 2-in-1 convertibles, tablets, smartphones and wearable devices is starting to blur is also booming. We’re big in all these areas, so we’re looking at how we can bring them together more. You’ll be seeing some increased activity from us in this area.
As ever, the market is constantly developing and both Tech Data and its customers must adapt to face different challenges and opportunities. Tech Data’s aim as a business is to be the trusted advisor to its reseller and retailer customers and that’s something we continue to invest in and work on right across our business.
Simon Coldwell: We are also investing strongly in our logistical capabilities and in developing and refining specialist supply chain services for retailers, to support omni-Channel services and shipment, for example. The ever-evolving demands of ecommerce and heightened expectations – from both vendors and retailers – means that there is a need for us to be even more agile and flexible. We’re working more collaboratively with retailers on multiple fronts, especially the reverse streams, and supporting their processes end-to-end. In doing so, I believe we are adding significant value and genuinely differentiating Tech Data as a partner for retailers.
“We have to provide and demonstrate our operational excellence and most important of all, we have to deliver.”
Andy Dow, Tech Data
What are you most excited about during the next year?
AD: We’re most excited about the potential that’s starting to emerge around the Cloud and the convergence of mobile technologies along with new areas such as fitness wearables and the smart home. We see some excellent opportunities developing here and this will be a real area of focus for us.
We are also excited about the rapid development of the PC gaming market. We work with come very big brand names in this market now and they are very well positioned to support growth. We’re also very involved in the supply of PC games titles and we’re currently taking pre-orders for a number of exciting new titles that are due for release over the summer and autumn. VR is another area that we are expecting to explode and we are already seeing many users getting ‘VR-ready’.
SC: As Andy says, there is a proliferation of mobile devices and a good deal of activity around PC gaming and accessories and making systems ‘VR-ready’. That’s increasing the number of stock lines that both web and traditional retailers need to offer, which brings our capabilities – in terms of providing reliable, overnight shipment to every corner of the UK and Ireland, and being able to drop-ship – even more to the fore.
What do you predict will be the biggest areas of growth in the tech sector over the next couple of years?
AD: It’s very hard to predict as there is so much change right now, but from a retail perspective, I’d imagine – and this is very much my personal view – that we’ll see continued growth in mobile devices of all kinds, and in wearable and smart home tech. The PC gaming market is looking very promising too, so I can see that growing rapidly over the next couple of years.
Talk us through your high-profile partnership with Apple and if/ how it differs from your relationships with other vendors?
AD: Our partnership with Apple is very positive and productive. We are able to provide retailers with a vast choice of products and accessories through our EDEN website, which was recently redesigned and given enhanced functionality, so that’s all going well. Our partnership with Apple differs only in that, as Apple is a very high-profile brand and has a very loyal customer base.
It’s important to provide specific focus and resources in the relevant areas. This is something we also do with other vendor partners, it’s just that the areas of focus are different for each partner.
How has the distribution space evolved with the growth of online retail?
AD: We have been working with retailers that sell only through the web for many years now. It’s constantly evolving, as you’d expect. As Simon said earlier, it’s made our ability to hold stocks of many thousands of different and diverse product lines, and our world-class logistics services, much more prominent and important.
SC: I can only echo that really. Being able to provide flexible options – and services such as pre-shipment configuration and testing of certain products has been important. Online has obviously grown and we’re continuing to refine and enhance the services we can offer web-based retailers.
How do you feel about the growth in robotics and automation within warehouses and distribution more generally? Will robots replace the need for humans within warehouses?
SC: Robotics is a major trend in logistics. Worldwide sales are already at around $2 billion and are forecast to reach over $22 bilion in 2021. It’s very much a personal view, but I see acceleration here being driven by the pace at which cognitive advances are made, and thereafter by easier ROI justification as prices for robotics systems begin to come down. The initial opportunity for technology distribution will be in the simplification of certain tasks and cost reduction. But there will be challenges here as well. Research by PwC estimates the proportion of jobs at high risk of automation within transport and storage to be over 56 per cent by the 2030s.
Will robots replace humans? It’s a good question and I envisage that they may, for a large proportion of warehouse activities. But, I’d also imagine there will always be exceptions that require human interactions. Other factors, such as how well and cost-effectively areas such as programming, retro-fitting, reliability, and maintenance will also impact adoption of robotics.
“The ever-evolving demands of ecommerce means there is a need for us to be even more agile and flexible.”
Simon Coldwell, Tech Data
How do you forge and maintain relationships with vendors and retailers?
AD: We work extremely hard to develop and maintain good partnerships, both with vendors and retailers. But they are of course, completely different kinds of relationships.
For vendors, we are the route to market and the most efficient, effective way to reach out to the entire Channel. Each one of those vendors will have a unique product range and its own targets and ambitions, and they will expect us to align our services and ways of working to meet those goals. To do that well, we have to have a deep and up-to-date understanding of the market, we have to provide and demonstrate our operational excellence and most important of all, we have to deliver – which means keeping the retailers happy.
Retailers are just as individual in terms of their wants and needs – whether they are a nationwide chain, a webstore or a high street independent. We have a myriad of processes designed to meet pretty much all their needs and a plethora of online tools and tailor-made configurators that are designed to make it quick, easy and cost-effective for them or find and order products they need.
On top of that we have a specialist retail sales team who are there to help retailers with their specific requirements, and on the vendor side, a consumer electronics team that works to bring new technologies and opportunities forward.
How do you think Brexit will change the UK retail space, and have you already begun seeing any effects?
AD: In distribution, we are used to dealing with change, and so are retailers. There are many factors, including economic and political developments, that impact the market but at the end of the day, demand for technology products from both consumers and businesses is only going to grow. There is a lot of talk about ‘transformation’ now and the increasing reliance on digital systems and processes, and that is only going to make organisations and individuals more dependent on technology and feed their appetite for more devices and increased services.
What other factors are currently impacting distributors in the Channel?
AD: Distribution and warehousing is a fast-moving and at times volatile sector – and that’s especially true of technology distribution. It’s an environment that’s constantly changing and the approach that Tech Data Logistics takes is one of total flexibility and readiness to adapt. We have multiple solutions, partner options and contingencies in place, and we like to think we are ready to deal with any eventuality.
But of course, you cannot stand still, so we’re constantly reviewing, updating and enhancing our systems and processes. By making use of market and business intelligence and analytics, and ensuring that we are closely aligned to the demands of our customers and the market, Tech Data can deliver a great service to our vendor partners and retailer customers. That makes us extremely robust and gives us as much future proofing as I think it’s possible to have in this sector.
We are always striving to excel in our supply chain management and execution, but also know we must continually evolve. We are fortunate in being able to leverage the infrastructure of one of the world’s leading technology distributors to provide great flexibility and the ability to scale across multiple solutions.
We have tremendous depth of experience within our logistics operations and a dedicated and committed workforce, excellent processes and IT platforms, and access to unrivalled resources and capabilities across the global Tech Data organisation. We are never complacent about our position in the market and I think that’s very important too. We work hard to drive differentiation at every level and in every area of our business – and I think we offer a genuinely different and valuable logistics service that can and does support the growth and profitability of our vendor partners and retailer customers.