One year on from its launch, Mark Glasspool, director of product marketing and sales at Tech Data’s Consumer Technology Group, speaks to Jonathan Easton about how important the group has become and how splitting the business up has benefited everyone.
Give us a brief background to the Consumer Technology Group. What was the thinking going in?
Rewind about three years where we separated our commercial and consumer PC business. That was with a view of getting the focus on our consumer side of that portfolio because it’s always been a weaker cousin so to speak. What happened as a result was that we saw significant year-on-year revenue and profitability growth from that separation.
So that was three years ago. The creation of the Consumer Technology Group was an extension of that. It contained the aforementioned consumer PC business which subsequently has continued on from strength to strength, but it also combined other consumer tech areas of our business that had been separated into more official business units in the past.
Things like components which would include all of the traditional consumer electronics products, along with things like networking, segmenting or enterprise networking and the more consumer side of that. It also included the consumer focus on print and supplies. It drew a line through all of our different business units with a view that the increased focus on the second part of the split with the retail sales team in the same area. What we were doing was increasing the focus on the consumer side more generally with an acceptance that there are a lot of different ways of working in the consumer world to the B2B world but also the importance of the adjacency between the product and the customer.
In that sense, the Consumer Technology Group was created and I took responsibility for both the product and the sales side of that group again because that adjacency is absolutely critical.
So have you found that the re-framing of things has had a positive reaction from your partners?
Yeah, hugely positive. It’s been a great 15 months and we have seen significant revenue growth in that period. I think we, depending on the technology type, get anything from 20 per cent to good triple digits on some of the more emerging tech areas like Smarthome. The breadth of customer we’re supplying has also significantly increased. It’s probably fair to say we’ve nearly doubled our retail partners we’re working with in the UK Channel since the creation of the Consumer Technology Group.
We now work with practically all of the household names in terms of our traditional IT and CE retail. Before, there were some big gaps, so it’s enabled us to close those gaps with products and services that those customers have wanted. It’s been an equal measure of customers wanting to work with us as us proactively driving into those customers.
So you mentioned Smarthome and networking. What are the areas which are seeing the most amount of demand in?
It’s probably no surprise that Smarthome and gaming for us have been the two largest growth areas. And both of those would be in triple digit growth. Consumer PC has also gone really well. In the last 12 months alone we’re circa 50 per cent year-on-year revenue growth. That’s some pretty significant growth on a on a larger product area as well. Some areas of networking are relatively flat, but in the Smarthome world we’ve seen good solid double digits going up to 50 per cent depending on the vendor.
Which do you think are going to be the big areas of growth over the next 18 months to two years?
For me the focus remains on the areas we view as tried and trusted. The only addition I would have is virtual and augmented reality. Now that obviously overlaps into the gaming world, but also that moves in to more vertical solutions as well. It’s not just about consumer traditional retail market, it’s also about consumer tech proliferating B2B. We’re starting to see SMB customers in the prosumer world using smartphone solutions as we’re starting to see some of our corporate enterprise customers using virtual reality and augmented reality as part of their go to market. I think the days where consumer tech only works in a retail environment are long gone. There’s being a massive blurring of the lines – the market is changing dramatically. We work really closely with Google and the Google product is certainly starting to have an impact on the B2B world as well.
Some other distributors in consumer tech space have started to move more in to white goods. Is this an area of interest to you?
It’s an area we’ve looked at a couple of times and it’s an area we continue to have an eye on. As you move into MDA and LBA products, the logistics model dramatically changes. And before we would consider going into that market we would want to have a solution that was cost objective for our partners. Today that model would need to be different from the one we operate. That’s not say we couldn’t do it, but it’s certainly a model that we would need to build in a very different way to the one we currently operate.
How has the team developed since its inception?
So we start the year probably with around just under 30 people. The CTG team now would see it closer to 40, so a 30 per cent growth. And then if you start to include the mobile and retail sales teams you can mean near on double that. It’s a serious part of our business now, it’s no longer just a little bit that sits on the side; it’s becoming relevant within our own business as well.
How does tech as a service play a role in the CTG?
Going back to that idea of consumer tech into a B2B world, that tech as a service solution fits nicely to enable partners to offer something different in to their customers. Today that is more of a B2B proposition, but the likes of Apple, HP, Lenovo are all looking at it as a best in class solution into that B2B world.
What’s next for the Consumer Technology Group?
We’re continuing to look at the products and solutions that our customers – and the market – are asking us for. We have some very specific vendor acquisitions we’d like to make. We are looking to come to market very soon with some nice solutions that our customers will be able to offer to their end users It’s a little early for me to talk specifically, but our services world is going to change. One we have announced very recently is our partnership with Citrus which is an online personalisation and merchandising solution. It’s something that’s gone really well in the States and Australia that we’re really pleased to have partnered with in Europe. We’re not looking to make a lot of acquisitions in terms of vendors, but there are some very specific key vendors that we’re very keen to get on the books and we’re hopeful we’ll be announcing one or two of those in the near future.