The secret life of a technology product - PC Retail

The secret life of a technology product

What happens before it gets to your shelves
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You might have a warehouse or shop full of IT products, from software to accessories to PCs themselves, but how much thought have you put into the journey they’ve been on to get to you? 

While products from established brands may have an easier route to market, most go through a research and testing phase at the very least, before heading to manufacturing (whether at home or away) and distribution.

PCR casts its eye over the whole process from beginning to end.

CONCEPTION

All good ideas have to come from somewhere. Most often they emerge from existing companies, perhaps even innovation teams. Some, of course, start with a lone inventor. Tom Lawton, creator of new phone camera product BubbleScope, is one such man. A panoramic sunset prompted his idea for a 360-degree camera. 

Since then he’s spent many years putting in hours and money to make the device a reality, building the technology to put the product together and finding the right manufacturing options. You can read more about the beginnings of the BubbleScope here.

Anyone who thinks they could get one of their ideas to market should take a serious look at their finances and commitments and wonder if they are willing to risk everything for it.

PRODUCT RESEARCH

After an idea, must come research. This may take several different forms depending on the type of product and the firm behind it.

It is a good idea to examine the market near the beginning of the whole process, when it is easier to walk away from a product that ultimately might not sell. Firms or individuals must find out whether there is a genuine demand for what they want to sell, and whether there are any competitors on the market. Is your product different enough to stand out, or so different no one will understand what it’s for?

Depending on the complexity of the product, you could look into blueprints/prototyping/product design at this stage, or wait until you have significant investment first.

Depending on an inventor’s or firm’s background, they might be able to draw up official designs themselves (or write the code if we’re talking about software), but if not there are firms such as The BIG Consultant (www.thebigconsultant.com), which offers help on everything from conceptual product design to mechanical engineering. 

PLAN FOR BUSINESS

This is when people just starting out might need to come up with a business plan and get those business brains switched on or work with someone else.

Bringing products to market is expensive. If you don’t pick up early interest from a manufacturer or distributor who might be able to help you out, looking for investment is another way to go.

To bring television into the mix, most people will be familiar with investors (of a sort) from Dragon’s Den. Now it must be said that this isn’t entirely representative of how approaching investors normally works but it might give you a taster of what to expect and what investors are looking for.

Essentially, they want to have faith in the person behind the product, as well as the product itself. They expect to see good, ambitious business plans that aren’t unrealistic. 

It takes some serious work to find investors to pitch to, although more and more have significant online presences now, from websites (such as www.cambridgecapitalgroup.co.uk) to profiles on social networks.

HOME OR AWAY

By now we’re looking at a mystery IT product that’s making serious inroads to getting on those shelves. The plans are all drawn up – but how do firms choose where to get their beloved products manufactured? 

Whilst at first glance the world is one’s oyster, UK-based firms generally have a choice between the Far East and here in the UK for a manufacturing base. 

The Far East is renowned for cheaper manufacturing and can be a good option, particularly if you have contacts there, or work with a company that has an office out there. But the downsides are obvious – it’s hard to be close to the manufacturing process and stock will be (initially) a long way away.

Whilst there may be some increased costs with UK-based manufacturing, there are benefits in having a workforce and a product close to home, including the ability to ship it out quickly if your product is in demand – PCR spoke with PC manfacturer Zoostorm (see boxout far left for more info) to see what it gains from being based in the UK.

CASE STUDY - ZOOSTORM

We chatted to PC brand Zoostorm for its take on manufacturing in the UK. The firm’s Nahim Choudhury says: “Zoostorm PCs are manufactured in the UK and have developed great relationships with ODMs in the Far East; we are a gold partner with Microsoft, Platinum Partner with Intel and partners with NVIDIA, AMD, and Western Digital and so on. 

“We have been building systems since 1993 and were acquired by the VIP Group in December 2011. We are currently manufacturing over 10,000 desktop and notebook PCs per month, making Zoostorm the UK’s largest PC systems builder serving the channel and retail market.

“We find that there are several advantages of manufacturing locally:-

1) UK-based customer service and support

2) As we’re not ordering from Far East, no minimum order quantity is required; so there’s less risk to the channel or retail partners

3) High volume local production – we can build and deliver PC systems within agreed timelines

4) Bespoke local configuration – we can build solutions to exact requirements, pre-install image/ software as and when required

5) We can identify gaps in existing markets created by larger firms and easily develop new customisable products for new markets, such as the Fizzbook (tablet/notebook/e-reader for education market)

6) We can bring employment to the local area

7) Keeping high technology expertise to develop new products for local markets

8) There’s no need to rely too much on the Far East – flooding in Thailand, earthquakes in Japan, and uncertainty in Taiwan all had an adverse affect on supply.”

In contrast to Zoostorm, chip manufacturer CSR, based in the technology hub in Cambridge, does its design work in the UK, but manufactures in Taiwan in order to take advantage of local brains and far off cost-savings.

TESTING TIMES

Unless firms want to disappoint consumers and retailers alike, most products should go through some sort of testing procedure before getting to market, whether it’s software testing in-house or comprehensive testing outsourced to another firm.

As environmental testing services firm PARC (Product Assessment and Reliability Centre), says: “Product reliability is essential if you are to maintain customer confidence. Product failure is annoying, costly, and potentially dangerous; it also damages a company’s reputation and its hard earned position in the market place.”

GETTING INTO RETAIL

Now we have a mystery IT product, a business, and there’s just the small matter of getting into retail to tackle. 

Businesses can talk to retailers by researching the names of buyers, calling firms directly and arranging meetings – but it takes hard work and persistence.

Working with business development or channel consultancy firms, which have close relationships with retail, can be useful for vendors too.

Victoria Satterly from Channel Assist says: “Placing product in the right retailers is the first step to creating market opportunity. For example, Channel Assist’s extensive channel relationships and market knowledge enable vendors to build the channel infrastructure that will best optimise a product’s sales potential."

BE THE TALK OF THE SHOW

Trade shows are handy for meeting retailers and distributors alike. The BubbleScope mentioned earlier made a big splash on the trade day at The Gadget Show Live, while trade show Distree, unlike many other events, focuses on one-to-one meetings, which are all about putting products in front of new buyers or distributors.

Liam McSherry, marketing director for Distree Events, comments: “Distree events provide vendors with an ideal opportunity to accelerate their route to market. One of the key benefits of having both distributors and retailers attending together is that is speeds up negotiations, generates demand and clears the line of communication. At the Distree Middle East event in May, we had one distributor sign two agreements onsite with retailers.” 

PCR’s own Boot Camp event in May this year put 250 retailers in front of 26 different stands filled with a number of brands, introducing them to some products for the first time.

LOGISTICS

For brands that want to go direct to their customers, or want to move stock around the country, logistics firms can do this and a whole lot more, alongside or instead of distribution. 

Gem Logistics is a prime example. Clients include well-known software and games firms and Gem expects to take on more soon. The firm’s business development manager Frank Ring says: “Gem Logistics provide our clients with a complete service in warehousing and supply chain logistics services, looking after your vital business-to-business distribution, or taking care of your consumers with the prompt, efficient and economic delivery and distribution they expect.”

Gem Logistics offers a wide range of services that vendors and retailers can pick and choose from, from end user fulfilment to storefront delivery, European or international delivery, import, export, reverse logistics (returns), bespoke packaging, product bundling, container unloading, shrink wrapping, palletising, white label solutions and much more – yes, it’s quite the list!

Ring also points out that Gem Logistics has expertise in managing brands, product launches and it understands tight deadlines. Rather important qualities when you want to get a product to retail.

DISTRIBUTION 

You almost certainly know all about the importance of distribution in the channel. This is how, by and large, product gets sent to retailers across the UK and it’s often the final step in the process before getting to retailers’ shelves.

Names you should know in this sector include: C2000, CCI Distribution, Centerprise, Centresoft, CMS Peripherals, Computers Unlimited, Direktek, EntaTech, Gem Distribution, Group Gear, Hama (UK), Ingram Micro, Interactive Ideas, Lygo, KMS Components, Koch Media, Micro-P, Midwich, Northamber, Meroncourt, Peak Development, Realtime Distribution, Target Components, VIP Computers and more.

Distributors can be a real boon to a technology firm once they have one on side. Many of the distributors also have other useful functions to offer as parts of their business, from accounts assistance to marketing to product bundling. Neil Willerton, sales director, Gem Distribution, explains: “Our depth of range and customer reach is second to none, and when you couple that with our best in class logistics and creative agency solutions we really are the ‘go to’ retail services partner for any vendor looking to launch into UK retail.”

Micro-P has a connected home suite that’s used to show off new products for manufacturers, retailers and resellers. Head of independent retail Mike Harris says:“This gives us a chance to hold meetings in a room brimming with technology and a great platform for manufacturers to show their products.”

PCR also canvassed for opinions on how to get spotted by a distributor.

Enta group vice president Jon Atherton says:“It is essential that we are proactive in identifying the next big thing. We frequently attend trade shows, such as Computex and CeBIT, in order to find suitable brands. We also talk with our customers to get their opinions and recommendations, and we are fortunate enough to have many manufacturers approach us to establish relationships.”

Dave Stevinson, sales director at VIP, comments:“VIP has a dedicated team of business and product managers who have their eyes and ears very close to the market. New brands are acquired through a multitude of ways: recommendation, personal contacts; reverse tender and even by invitation.”

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