Signs of recovery - PC Retail

Signs of recovery

PCR investigates whether things are getting better for the channel
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The problem with a 24-hour news culture is that there is a pressure on some media organisations to present new information at a rate that is sometimes faster than it actually unfolds. The economic recession has provided fodder for many a column-inch and TV news segment, the latter of which usually gets to the nub of the matter using some kind of visual metaphor – often a crashing train set.

The problem is, a deflating economy isn’t quite as tangible or easily dramatised as, say, the Waco standoff in Texas. The minute numerical changes of a market won’t be front page news, but the story is still high on the agenda. So overarching statements are made – a tangible narrative woven from the numerical matrix, which most of us don’t really understand. These large scale economic shifts are almost conceptual ideas, rather than actual, corporeal events, and are as such more difficult to pin down with any absolute certainty.

Enter the financial analysts who appear on news programmes, presented as sorcerers who are able to translate the complex movements of a free market capitalist economy like runes in a book on demonology. But there’s a problem – they don’t all agree. This puts Joe Public in a precarious position. While it’s one thing to trust an expert to understand the complexities of a deflating economy, it’s another to choose between two experts who disagree, especially when you consider that claims have ranged from ‘the economy will be fine by Christmas,’ to ‘the downturn will last another ten years’.

Thankfully, there are increasing numbers of reports about ‘green shoots’ appearing in the economy. More and more experts appear to be agreeing that a small, tentative amount of optimism is not out of the question when it comes to the economy. While not quite a consensus, a growing number of voices are making much more positive noise than the doom and gloom reports we’ve had over the last year and a half. And this seems to be reflected by many who are tasked with keeping an eye on the UK’s technology retail sector as well.

“It certainly appears that we are seeing light at the end of the tunnel. Activity on the run-up to the peak appears to be gathering some momentum, with manufacturers planning quite extensive brand or product pushes,” says Nigel Stone, CEO at Infinite Group. “Optimism seems higher than it was six months ago and I get the feeling that some previously planned launches or sales drives were put on hold, rather than shelved indefinitely. What remains to be seen is if the peak will be a ‘V’ (continuous improving sales) or a ‘W’ (a peak, then a decline before we see a recovery).

In my opinion, this will depend on whether customers can be enticed with an enriched offering over the busiest trading period and then clear propositions demonstrating customer value through 2010.” In a wider sense, the last couple of months have actually seen growth across the retail sector, according to figures compiled by the British Retail Consortium. While the organisation holds this up as a positive sign, it warns against reading too much into it.

Richard Dodd, head of media and campaigns at the British Retail Consortium, says: “The figures for June this year were reasonably good compared to last year, with growth overall of 3.2 per cent, which is the second highest growth we’ve seen this year. This shows there are signs that retailers are doing quite a bit better than they were.

“Does that mean the recession is over or that we can be clear that we’re on the way to recovery? The answer to that is: not necessarily. The last two months have shown some good results compared to the dire results we’ve had over the last year and a half, but what we haven’t had yet is consistency.”

So there are some positive signs for retailers at the moment, but that isn’t a conclusive indication that the hard times are over yet. It’s wise not to let out a breath of relief simply at the change in tone from commentators, but actual figures are genuinely positive. Let’s hope there’s more to come.

Distributor Perspective

Michael Breeze, Marketing Director, Interactive Ideas
I believe we are starting to see some light at the end of the tunnel – it just depends on the company and industry as to how long the tunnel is. At Interactive Ideas we have managed to post record company revenues in the past two years and there are a number of other companies also doing very well.

The advantage the IT industry has had on the consumer side is that people still have money to spend, but they’re trying to be more prudent and changing habits slightly – maybe not going out as much – which then means they’re looking at other forms of entertainment such as gaming, photography, and video making.

Jon Atherton, Commercial Group Vice President, Enta

I believe we will see improvement during Q4. Green shoots are developing in terms of car sales, increased mortgage requests, and house prices are increasing. I also believe that IT is one of the last industries to be affected from a corporate perspective, as IT is now the centre for infrastructure and spend in most organisations.

Retail Perspective

CK, Owner, YoYoTech
We have seen a polarisation of sales through the quiet period. On the one hand, high-end systems are selling well – and YOYOTech's customers are loving all of our pre-overclocked designs like the Water Dragon and Fi7EPOWER ranges.

On the other hand, small components like SD cards are also selling well – simply because we're beating the pricing of High Street majors like Argos by as much as 50 per cent. The challenge seems to be in the middle ground.

Mark Webb, DSGi
Companies have to look at themselves and react effectively to the changing environment. The companies, which will emerge stronger are those that have listened to their customers and adapted their business to focus on the customer.

Vendor Perspective

Tony Riccardi, Sales and Marketing Director, Mesh
With desktop sales up more than 50 per cent for July, the market is brilliant for Mesh and we're loving it. There's nothing like a powerful recession to prune out the weaker companies – leaving only the strongest in the market.

Everyone suffered last year, there's no way of getting away from that. However, our 22 years of experience as the UK's number one award-winning system manufacturer stood Mesh in good stead.

Simon Geach, Consumer Sales Director, Kaspersky
Businesses with solid foundations such as Kaspersky are in a position to support themselves better in times of hardship. Also, technology has become a more fundamental way of life and way of doing business than ever before. Therefore, people accept that having the right technology is now an essential part of everyday life and business.

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