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Channel voices: a look back at 2008

by Scott Bicheno on 2 January 2009, 12:04

Tags: Enta Group, Target Components, Cooler Master, Meroncourt

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Looking on the bright side

As we predicted at the start of the year, 2008 was a toughy for pretty much everyone. And it wasn't just us; we also asked some channel pundits what they foresaw.

A year later we asked the channel to look back at this historic year for the world's economy and give us their positives and negatives:


Paul Cubbage, MD, Target Components

When I was asked a year ago what would be the main factors affecting the channel in 2008, I said that the economy, rather than technology, would be the biggest factor, and in particular how businesses positioned themselves to cope with a change in demand patterns.

I was particularly positive about the potential impact for service-based businesses as replacement cycles were extended and consumers looked to repair rather than buy new.

We have seen this come to pass this year, and the big positive for me is that the businesses that have been best placed to take advantage - either because they were already primarily based around service or because they have had the flexibility to react quickly - are the small to medium sized independents.

Given the ‘crisis' amongst high street multiples - typically not based on good service, and certainly lacking the flexibility to quickly change business model - the downturn has proven to be a real and much needed leveller.

There are two main reasons for this. Firstly, the indies are embracing the internet like never before, and the web now provides the ideal marketplace to do this. The internet's share of spend is increasing, and a greater proportion of internet IT spend goes to smaller etailers now than at any previous time.

Secondly, independents have always been ideally placed to provide expertise, service and support to their local community. At a time when consumers don't have cash to buy new replacements, repairs and services such as virus removal are essential, and local IT experts are ideally placed to satisfy this need.

We have seen a number of distributors struggle in 2008, and one effect of this seems to be a tightening of funding for customer service. Over the last quarter, we have picked up new accounts at an unprecedented rate, and a high proportion of these come to Target because they have fallen out with existing suppliers because of a poorly handled issue and choose Target because of our reputation for customer service and support.

The irony here is that those who are already struggling are now making their situation far worse by driving customers away in an attempt to cut costs.