B2B growth left standing by consumer boom

Neil Somaia: Consumers are no longer impulse buying which can be worrying.

UK resellers selling exclusively to businesses suffered a blow last week as research revealed the corporate sector is failing to match rising IT spend among consumers.

Feverish consumer demand for laptops enabled the UK IT market to post a strong nine per cent sales jump in the first half of 2008, according to GfK’s IT Barometer.

Boosted by the growth of ultra-mobile PCs, laptop sales grew by 24 per cent, according to the research house. This in turn drove strong growth of IT peripherals.

But while consumer sales flew up 18 per cent, corporate sales grew a modest four per cent. Anthony Norman, business group director at GfK, claimed that many firms are applying the brakes on IT spending after heeding analyst predictions on the economic climate

However, Neal Somaia, owner of consumer and business reseller Mighty Micro Manchester, disagreed with GfK’s findings.
“Consumers are going for lower price points and impulse buying has almost disappeared, which is a worry. Six months ago consumers would walk in and buy items worth £40; now they are saying I’ll have a think about it,” he said. “The business market is just the opposite because people need kit to do their job.”

Barry Dodhia, marketing manager of VAR Hemini, said: “Firms are holding back on spending on IT unless it is absolutely necessary.”

GfK’s figures reveal that sales of digital photo frames grew faster than any other product in the first half of 2008, with sales increasing 75 per cent. Power management was a hot spot with 40 per cent growth, while desktop PCs and printers both declined, by two per cent and 12 per cent, respectively.

Norman was less confident for the remainder of this year: “Looking at the weakening state of the total durables market, we must ask just how long the IT sector’s performance can remain positive,” he said.