PCR talks to Realtime MD Mark Reed about opportunities in the games market, the value of a
focused portfolio and what retail partner programmes can do for you.
How has the last year been?
These last 12 months have been very good. This year came with some challenges, but equally we’ve seen consistent growth in some areas and we’ve delivered growth as a result, particularly in the last six months.
This year is already looking like it will see a strong increase. We’ve taken some fantastic steps forward, and we’re gaining a lot of business in High Street retail, by virtue of Realtime increasing its strength and its service towards those retail customers.
What are those particular strengths?
We have two separate strong sales teams. One supports our distribution business, and that is typically smaller indies, as well as etailers, and then our retail team focuses specifically around large retailers. That latter area has grown significantly.
We can demonstrate our strengths in the mix of our products too. We’re doing well in our components business, which still represents over 50 per cent of sales – it’s a mix of mid-high end products including graphics cards, motherboards, hard drives and memory.
But where we have seen significant growth is with our peripherals-based products, across the board with all our customers, from the traditional customer base, to the bigger retailers that we’ve worked with more recently.
How have you achieved this growth?
Our products are centred around enthusiast gaming products, internal and external, and going to retailers and telling them that there’s a market for £60, £70 or £80 gaming mice was initially completely alien to them.
Our pitch was that we’re introducing a new type of customer. And that person will come in and spend more because the demographic for our products is the people who spend the most and replace the most often. Many of our online customers are aware of this, but for a lot of High Street retailers it was a chance to do something new.
It must help that PC gaming is seeing something of a resurgence?
We have been beating that drum for three to four years. Many are brainwashed into believing that console is gaming, whereas when you look at Warcraft, Starcraft, downloading on Steam – which doesn’t even play a part in figures – PC has been enormous but often invisible. In terms of the quantity of people who play games, PC was big and over recent years has gone massive – and retailers can benefit from selling the hardware associated with those games.
Realtime aligned itself with brands like Sennheiser, Creative and Razer early on. It would be a lot harder to get Razer as an exclusive partner today.
What can you do to help retailers?
One thing that Realtime recognises is that many enthusiast-led products come with a high price point, and products like graphics cards which can have big price movements are a challenge to stock. So what we are putting together, specifically for independent retailers, is a retail partner programme that will offer things such as price protection, POS/marketing support, and a rebate structure, all aimed at giving them the ability to be well positioned to sell high end product without the risks associated.
For our larger customers, we can tailor our service and our delivery around them. Because our focus is on a smaller number of brands, we can drive business for those brands and really tailor the solution to the retailer.
What are some of the key challenges for Realtime itself?
Because of our focus, our reputation, and the strengths of brands we have in gaming peripherals and graphics, often people forget Realtime for the more commodity-based components such as processors, memory, motherboards, hard drives and Microsoft. And that still represents 50 per cent of our business.
Is there anything new coming up?
Yes there is. There will continue to be an expansion of our product offering. At the same time, we will always strive never to take on so many brands that it dilutes the focus on the brands we already have. Similarly we look to take on complementary brands rather than competing ones – there’s no value to anyone in that. This strategy of having a set amount of brands that do not overlap has been a strategy that Realtime has pursued since its conception. For nearly 20 years, it has seen us in good stead and it won’t be changing any time soon.
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