http://www.channeltimes.com/story/retail-the-next-big-wave/
Of late there has been a sudden spurt in the number of IT manufacturers going the retail way. Retail is predicted to be the next big growth opportunity in India. And if you consider the number of huge malls and shopping complexes sprouting up across the country and the response it has generated, it might dispel any doubts you may have had.
But IT and retail somehow still don’t seem to gel well. Industry watchers have been predicting the shift to the retail channel for quite some time now. However, though manufacturers have been making investments, the footfall conversion into actual sales is not what one might have expected. Also, the return on investment for the retail partners has not been quick.
Of course, the strategy seems to have worked well for the manufacturer. The initial rationale behind opting for the retail channel was to create a direct interface with the end-consumer. Retailing provided principals the opportunity to gain a firsthand understanding of the needs and aspirations of the end-consumer. In addition to this, these retail outlets also served to increase awareness about IT products.
However, while the manufacturer has benefited, it is the channel partner who seems to have suffered in the bargain. Most manufacturers have either tied up with a retail chain or helped convert an existing channel partner into a retail player. And more often than not it is the channel partner who has invested huge sums into setting up the retail infrastructure. However, a retail partner doesn’t get most of the price benefits that his counterpart in the IT channel gets. Hence, he stands to lose out either way.
Fortunately, realizing the downside of this scenario, manufacturers have been taking proactive measures to make it a mutually beneficial one. For instance, retail partners can now avail of benefits similar to the ones till now enjoyed by their counterparts in the channel. Also, several promotional campaigns have been launched to encourage customers to make their purchase through the retail channel.
And while the retail prices continue to remain higher than those offered by channel partners, end-customers are now being promised various incentives including attractive freebies to gain their mind share.
All said and done, the strategy has definitely played a huge role in creating a pull for IT products. Even the consumer buying behavior has been undergoing a significant change. This may benefit the retailer, as there is a propensity to place more faith in a retail outlet than in a reseller-cum-dealer when it comes to after-sales service and warranty support. In fact, an increasing number of consumers are willing to pay a premium to be assured of this satisfaction.
Global trends also point toward increased retail buying. The future does look promising provided the retailer has deep pockets to stick out the initial lean period.
Of late there has been a sudden spurt in the number of IT manufacturers going the retail way. Retail is predicted to be the next big growth opportunity in India. And if you consider the number of huge malls and shopping complexes sprouting up across the country and the response it has generated, it might dispel any doubts you may have had.
But IT and retail somehow still don’t seem to gel well. Industry watchers have been predicting the shift to the retail channel for quite some time now. However, though manufacturers have been making investments, the footfall conversion into actual sales is not what one might have expected. Also, the return on investment for the retail partners has not been quick.
Of course, the strategy seems to have worked well for the manufacturer. The initial rationale behind opting for the retail channel was to create a direct interface with the end-consumer. Retailing provided principals the opportunity to gain a firsthand understanding of the needs and aspirations of the end-consumer. In addition to this, these retail outlets also served to increase awareness about IT products.
However, while the manufacturer has benefited, it is the channel partner who seems to have suffered in the bargain. Most manufacturers have either tied up with a retail chain or helped convert an existing channel partner into a retail player. And more often than not it is the channel partner who has invested huge sums into setting up the retail infrastructure. However, a retail partner doesn’t get most of the price benefits that his counterpart in the IT channel gets. Hence, he stands to lose out either way.
Fortunately, realizing the downside of this scenario, manufacturers have been taking proactive measures to make it a mutually beneficial one. For instance, retail partners can now avail of benefits similar to the ones till now enjoyed by their counterparts in the channel. Also, several promotional campaigns have been launched to encourage customers to make their purchase through the retail channel.
And while the retail prices continue to remain higher than those offered by channel partners, end-customers are now being promised various incentives including attractive freebies to gain their mind share.
All said and done, the strategy has definitely played a huge role in creating a pull for IT products. Even the consumer buying behavior has been undergoing a significant change. This may benefit the retailer, as there is a propensity to place more faith in a retail outlet than in a reseller-cum-dealer when it comes to after-sales service and warranty support. In fact, an increasing number of consumers are willing to pay a premium to be assured of this satisfaction.
Global trends also point toward increased retail buying. The future does look promising provided the retailer has deep pockets to stick out the initial lean period.
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