PCR Retail Survey 2014: What's happening on the High Street? - PC Retail

PCR Retail Survey 2014: What's happening on the High Street?

We find out what trends influenced the channel last year and how confident retailers and resellers feel about business throughout 2014
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PCR asks over 100 anonymous independent retailers from across the UK about how business was last year, how confident they feel about the tech industry in the future, their biggest challenges and which products are tipped for success during 2014.

2013 continued to see the growth of tablets in the tech retail market – with retailers’ sales of tablet devices doubling on average over the year. However, traditional computing platforms such as desktops and laptops were shown to still be alive and kicking, with many retailers reporting strong sales in both categories despite some reports which state that sales are declining.

Other trends that showed influence in the channel last year include the strength of digital e-commerce and the growing importance of networking products. Retailers expressed excitement at the number of new products set to appear in 2014, including 4K displays, the evolution of high-speed and cloud- based networking and new gaming systems and mobile devices, as well as wearable technology such as smartwatches and glasses – all of which are set to provide more opportunities to entice consumers throughout the next year.

The positive retailer comments demonstrate that there is still strength in brick and mortar retail – a fact made clear by the statistic that over half of retailers saw business improve during 2013 – with services, repairs and support bolstering tech retailers’ portfolios.

How was business overall last year compared to 2012?
This certainly was a question that produced polarising results.

Almost three-fifths (56 per cent) of retailers said that business during 2013 was up on 2012, which provides an optimistic outlook for the state of tech retail at this moment in time.

However, on the other hand, a quarter (25 per cent) stated that business was down on the previous year, echoing repeated headlines and reports forecasting doom for independent retail.

A further fifth (19 per cent) said business had remained stable – arguably an impressive feat in the face of declining desktop sales.

“Nothing up, nothing down – you can’t complain really given the current market,” commented?one retailer.

With new technology already beginning to build consumer interest for 2014, let’s hope that the majority of retailers continue to see growth during 2014.

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How was your online business in 2013?
Unsurprisingly, online retail looks to be set for continued success.

Less than a tenth of retailers who offer e-commerce services reported sales being down from 2012 during 2013, and almost a third (31 per cent) saw online sales grow. A third (33 per cent) saw online sales retain their popularity, seeing neither growth nor decline.

Most interestingly, despite the obvious success of online, over a quarter (27 per cent) of retailers are still yet to embrace a digital platform – or have only just begun to launch their online services.

Given the recorded success of the medium, it may be that by the beginning of 2015, almost every retailer will have an online retail presence of some description.

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What was your top-selling product during 2013?
This really was a pleasant shock. Stop tolling the death knell for the traditional computer – it seems to be back in a big way.

According to retailers, laptops were the most popular purchase for consumers during 2013 – with?over double the amount of?retailers (23 per cent) selling?more laptops than tablets, which was the biggest seller for a tenth (10 per cent) of firms.

Even the humble desktop computer was recorded as more popular than tablet devices,?with 13 per cent of stores crowning?big boxes as king once again.

Another trend that may be?observed is the move by brick and mortar stores to provide services which online retailers can’t reproduce – 14 per cent of firms recorded support, repairs and other services as their greatest revenue drivers.

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Are you selling more tablets now compared to 12 months ago?
The last few years have seen the release of an abundance of tablets and over the past year there has been a sharp increase in budget Android devices. A number of big retail chains have even gone as far as to release own-branded tablets in a bid to take a slice of the pie from the likes of Apple, Samsung and Amazon – most notably Tesco’s Hudl.

There was an almost even split amongst independent retailers, with 48 per cent saying they were selling more tablets and 52 per cent saying there were not.

For those that were, the average increase in tablets sales from 12 months ago was an impressive 104 per cent, showing that not only is the tablet market booming,?but that it provides some excellent opportunities for IT retailers.

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What percentage of your revenue is generated by consumer sales?
Mirroring the popularity of alternative services as seen in the previous question, this question revealed that very few (nine per cent) of technology retailers solely or largely sell products.

The majority of stores only generate up to 20 per cent of their revenue from sales to consumers, with roughly another quarter (27 per cent) attributing around a third of their income to B2C sales – and 21 per cent said that consumer sales make up around half of their total revenue.

With online retailers often managing to offer lower prices than physical outlets, it seems that businesses are moving to provide alternative services or deal more directly with enterprise customers to make up for lower consumer sales.

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What percentage of your revenue is generated by B2B sales?
The results to this question revealed that enterprise sales aren’t a large focus for an overwhelming majority of retailers – for 61 per cent of businesses, B2B only produces up to 20 per cent of their revenue, with another tenth (13 per cent) only increasing B2B income to 20-40 per cent of their overall turnover.

With over three-fifths of those questioned generating less than fifth of their total income from B2B, it’s clear that priorities lie elsewhere. However, a tenth of firms (10 per cent) were almost entirely dependent on B2B business, with the market responsible for 80 to 100 per cent of their turnover.

One of the retailers who focuses on B2B sales explained:“Consumers just want low prices, but businesses we deal with want to know they can get local support instead of dealing with a big company who doesn’t care about them – that’s where we come in.”

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What percentage of your revenue is generated by repairs, support and other services?
These statistics reveal some interesting trends – almost a third of retailers generate around three quarters of their revenue from additional service such as repairs, consultancy, support and installations.?

Another quarter of businesses rely on such services for roughly half of their annual earnings, but a still sizeable group (17 per cent) offer no or very little services to customers, only bringing in up to one fifth of their revenue in such a manner.

Compared to consumer and B2B sales, support is the least likely service to be the single focus of a business, with only 12 per cent of firms producing 80-100 per cent of their revenue via the provisions.

This suggests that while concentrating on product sales may hold less of an importance today, independent stores are a long way from abandoning sales of stock altogether – see ‘Do you think you will still be selling stock in five years time?’ at the end of this article for more.

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Would you consider stocking or repairing wearable tech or 4K screens?
There was a lot of talk about wearable tech and 4K screens at this year’s CES, so PCR thought that the survey would be an ideal opportunity to see what UK retailers thought of the new technology – and whether it presented a prospective retail opportunity for them.

The results were incredibly close, with 48 per cent saying they would consider stocking or repairing wearable tech and 51 saying they would not.

For those that were not interested in the new technology, many said the reason was that it was just too new and they were unsure as to whether they’d be able to fix or get parts for devices such as smartwatches – read our cover story on page three for more information.

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Do you feel confident about your business in 2014?
The answers to this question were very positive, with 87 per cent of retailers saying they were confident about their business in 2014.

“Business is only continuing to grow, and I reckon that’ll continue next year,” said one store owner.

This not only shows the resilience in the tech industry but also the confidence that retailers have in being able to offer new technology to bring in customers, as well as confidence in the relationships they have built with their existing customers.

Not everyone was on the optimistic side of course, with 13 per cent saying they did not feel confident about the year ahead.

One retailer commented:“With the way that things are going, with consumers moving to online and etailers being able to offer products at prices that we can’t match, I’d be surprised if we still have a store in five years’ time.”

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What new product or service will do well this year?
For this question, there was no real stand out product or service, showing the evolving world of technology means IT retailers are able to sell a wide variety of products, and are therefore looking forward to a number of different products or services that will make an appearance or continue to increase in popularity this year.?14 per cent of those surveyed said they are looking forward to networking products and services, such as the cloud, new servers and the expansion of 4G networks. Others said they were excited about Windows 9 and 3D printers.

Mobile devices and gaming products took 13 per cent of the votes each, followed closely by wearable tech, with 11 per cent, and display technology (4K, curved and smart TVs) with 10 per cent.

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What trend will impact your business the most in 2014?
Almost a quarter of all retailers surveyed believe that the continuing growth and popularity of mobile devices will have an impact on their business. This includes tablets, smartphones and wearable tech such as smartwatches.

14 per cent of those surveyed said developments in networking would affect their business throughout this year, most notably the cloud.

While there has been much talk about the decline of the High Street and consumers preferring online retail, only five per cent of independent retailers believe that etailers will pose a threat to their business in 2014.

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Do you think you’ll still be selling stock in five years’ time?
Retailers were confident that they would still be selling stock in five years’ time – 82 per cent in fact – and that managed services might not be the answer for everyone. This is in keeping with the fact that 87 per cent of retailers feel confident about their business for 2014.

This shows that while many retailers have diversified their business to include repairs and support, they believe that they can still provide competitive prices on products to keep the customer coming back.

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