How can we halt the PC sales decline?

We ask the PCR Retail Advisory Board what can be done to prevent sales falling further in the future
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In another difficult year for the traditional computing market, IDC reported that UK PC shipments fell 12.6 per cent in 2013.

We ask the PCR Retail Advisory Board for their reaction to the news and what can be done to prevent sales falling further in the future.

JAMES GORBOLD, Technical Marketing, Scan Computers: “The overall PC market may be in decline, but it isn’t a universal trend. For example, Scan’s 3XS system integration division enjoyed significant growth in 2013 thanks to a strategy of focusing on specific markets with the right products and services.

The decline is also not necessarily due to the market leaning towards tablets and consumer electronics. The industry has to understand why somebody might want to buy a traditional PC rather than assuming that a PC is the right option for them. Tablets and other CE devices are highly optimised for media consumption, whereas a PC or laptop is still far superior for media creation, thanks to their higher performance and more complex input devices. It’s all about targeting customers with the right devices and software.

As for what vendors, distributors and retailers can do to improve sales in 2014, now, that would be giving the game away...”

GAVIN HOLDER, Director, GHI Computers: “The recent decline seen in PC sales is not at all unexpected. The internet started life on the PC and was exclusively for the PC for many years. Without a doubt, this prompted the rise in ownership of the PCs in households across the UK, most of which were purchased purely for internet use. The internet evolved and has since migrated to mobile phones, tablets and even TVs, so naturally you would expect PC sales to decline as consumers move to smaller, more convenient devices to connect to the internet. The demise of the PC for me would have come a lot sooner if the mobile network operators brought into services like 4G earlier.

When the 4G market becomes cheaper, I expect more and more consumers to find their home broadband surplus to requirements, especially since the 5G service currently being rolled out across South Korea claims to be able to download a full-length film in less than a second.

I’m sure PCs will continue to exist as workstations and gaming rigs for years to come, but sadly the selling of internet PCs is over. This will lead to further decline as the new younger generation come of age and stay connected purely on the go. Retailers need to diversify and offer the new exciting gadgets but also still stay true to the humble PC by standing out from the crowd.”

DUNCAN RUTHERFORD, Product Manager, Dabs.com: “For us the biggest challenge around the PC sales decline has been in the B2B space on entry level, legacy system replacements. That said, we’ve managed to negate the unit reduction impact with an increased ASP (average selling price) via our PC sales to the consumer space – mainly by targeting the enthusiast and gamer segments.

In terms of the overall decline, the channel as a whole needs to adapt to new demands – for example SFF/NUC (Small form factor computers such as Intel’s New Unit of Computing devices) style systems – as well as looking at new solutions for big business where they could embrace tablet technologies for their employees. Key initiatives such as BYOD (Bring Your Own Device) are a key focus for us in FY2014 and XPP EOL gives us the chance to talk to customers once again about considering a hardware refresh from a new angle.”

CHRIS INNES, MD, Micro Plus Computers: “I guess as long as retailers such as PC World and John Lewis keep reducing the amount of display space that they give to desktop PCs, then overall sales will decline as a result. We are also finding that most of the schools we deal with are shifting almost completely to tablets and laptops, but there is still a big demand for PCs from businesses and for more niche domestic groups.

However, over the past year we have actually seen an increase in overall desktop PC sales. Desktops still account for 29 per cent of the computers we sell, with 52 per cent of our sales coming from laptops and 19 per cent from tablets. Much of this has come from an increased interest in custom-built PCs for gaming, audio workstations and CAD systems for business. We are also involved in the Exist2Game computer gaming events and our gaming PC sales have certainly jumped as a result of this.

We don’t sell many ‘family PCs’ these days due to the obvious shift towards each family member now having their own laptop or tablet instead, but we are getting more older domestic computer users coming to us.This is partly because they want local support and advice, but also because many of them want a bigger screen and a ‘proper’ keyboard and mouse – something only a desktop PC can offer.”

CK, MD,YoYoTech: “Customers will buy a new PC when the old one fails, a new user is added to the household or when the usage model changes.

Systems are reliable, so waiting for replacement orders is unlikely to yield results. When a student goes off to college, you have a chance to sell in a new system, but that is very seasonal. That leaves us with the usage model.When new games come into the market or customers want new technology like 4K, then opportunities present themselves.

It is up to everyone in the industry to let customers know that old systems will not provide the best experience for the latest media and games.

Here at YoYoTech, we have been pushing back the barriers – for example, we partnered with BMW to allow their customers the chance to get hands-on with a $13,000 system that was featured in Forbes.

Even the idea of touching a system that costs that much drives up the desire element.

When you’re coming out of a recession like the double-dipper we have seen then you’re bound to see people hanging onto hardware for longer. With the present growth that we’re seeing in the economy, the market is now much more positive about the PC sector. Are we worried about tablets and laptops? No chance. As Sky prepares for the broadcast of 4K signals, we’re focused on 4K content too. When you show me a tablet that can process a 4K video stream or play the latest games at 4K resolutions – I’ll be worried. For now, all we’re seeing is gravy.”

CRAIG HUME, Director, Utopia Computers: “It’s unlikely that PC sales will ever return to the sales figures we saw during the platform’s heyday. Smartphones and tablets have stopped the need to have a desktop in every room of the consumer’s household. For example, we used to install small form factor desktops in clients’ kitchens, so they could easily access recipes online. I can’t imagine ever recommending this solution now. However, by offering bespoke desktop solutions and the latest technology at an affordable price, it is possible to offer a unique product and solution that mobile devices simply can not fulfill.

Initiatives like Exist2Game help retailers promote the performance benefits of the latest technology (in this case: gaming). Getting consumers to try the latest kit is key for retailers as some technology, such as Nvidia’s new G-Sync monitor, is a hard sell without experiencing it in person. If everyone in the channel can work together to educate the consumer, we will certainly begin to reap the benefits – as well as see the dividends.”

HAVE YOUR SAY
PCR asks its Retail Advisory Panel – formed of buyers and experts – about the biggest industry trends and issues each month. To join, email Dominic.Sacco@intentmedia.co.uk

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