Resellers and consultants that focus on the SME market are to face aME experiments. challenge from the retail sector.
High street and superstore operations such as Opus and Tiny Computers, and Watford Electronics' Store CompUK, are laying out their plans to target the SME sector. One company which is looking to gain the lion's share of the SME sector is Kingfisher Group, owner of the Comet chain. It has set up an SME targeted pilot project, IT Works, which opened in Reading in January. The targeting of the lucrative SME market is a move that could severely dent resellers and consultants' businesses.
The project is performing strongly and is expected to roll out nationally in the second half of the year. Peter Green, IT Works store manager, revealed: 'It's going well. There was 18 months of market research before opening and we found a gap in the market. A lot of small and medium businesses either don't have an IT manager or have one person dealing with IT We can fill that gap.'
Green added that IT Works had moved away from the typical retail model to attract a specialist customer base. 'We are not looking for foot flow into the store, we offer every computing or electronics system a business needs. We have 21 solution bays with highly trained staff who know what businesses want. We offer our customers every service and the opportunity to play with the products.'
The customers that IT Works is aiming at range from one-man-bands to corporate accounts. The store has secured an account for 800 PCs and has attracted the attention of other major high street retailers that have gone to the store on fact-finding missions. But, IT Works perceives its main competitors as mail-order companies and consultants.
The hybrid nature of the store has led to mixed responses from industry watchers. Analyst Richard Holway commented: 'I don't believe a retail model is going to work for this type of business. Businesses use local experts - it's what everyone does and it works. If IT Works offers on-site consultancy, that's a step forward.'
But, Jeremy Davies, analyst at Context, was more up-beat about the project: 'It's interesting. The concept is OK - a bit like a super-dealer. A step up from the business area in PC World and down from Computacenter. It makes sense, but technically qualified staff will cost money, especially looking at the services and networking side. There is a swathe of dealers that do good local business. If IT Works can provide good service, support and expertise at the right price, it will have an edge.'
David Atherton, MD of Dabs Direct, was clear in his response: 'Kingfisher has a lot of money, so it can afford to experiment. I don't see it as a threat. Mail order will always attract a more sophisticated customer than retail. Their main competitor is going to be PC World. I can offer a wider range of stock at a more competitive price than any retailer.
As for going into a store for the touch and feel thing, that's just emotional.
A sophisticated buyer does not need that.'
FINDING OUT WHAT'S IN STORE
On entering the IT Works store, the customer is faced with the choice of wandering around independently or going immediately to a consultation to see what is required.
The store is made up of 21 solution bays, a display area and a glass-fronted lab, where PCs are built-to-order with a turn around time of three days.
The solution bays cover a range from video conferencing, networks, retail POS systems, digital photography, internet and other emerging technologies.
Other products in the store include switches, hubs, branded PCs, servers, notebooks, faxes, PDAs and phones. Upgrades and millennium compliance checks are also available.
Other major differences between this and other retail outlets is the presence of a training room, where almost every aspect of IT training is covered at a cost of about #150 per day.
The training room also doubles up as a video conferencing suite, which is available for hire.
Client managers can also be spotted around the store. They fulfil the role of consultants both in store and on-site.
The business feel to the store is kept intact, without the usual disturbance of music blaring across a sales floor. As a final touch, there is a coffee bar to relax at, just in case eyes begin to glaze over after a networks consultation.
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