VARs square up to retail in fight for SMEs
European resellers fear losing out to large IT retail outlets
Europe's top resellers fear losing out to large IT retail outlets in the fight for the lucrative SME sector, according to the latest research from analyst Context.
The research report, Channel Fact Survey, questioned 500 European resellers about the emergence of the retail sector in the business market.
The results showed that UK resellers were the most concerned, with about 85 per cent displaying a level of concern which ranged from 'slight' to 'serious'.
UK resellers, ranging from large corporate to small specialist VARs, made up about 20 per cent of the sample.
Jeremy Davies, senior partner at Context, said the IT slowdown had forced big players to move down to the SME sector while retailers have moved up into it.
"Because of what is happening in the PC market, the big retailers, which traditionally sell to consumers, are saying, 'We can attack business,'" he said.
"UK resellers are most concerned because the retail environment is dominated by Dixons Group, which has massive resources."
Dixons' PC World Business operation targets the small-office/home-office and SME markets. It is also offering customers additional services, such as credit and finance deals, in a bid to eat into resellers' business.
Davies said resellers must invest in services if they are to fend off large retailers in the SME sectors.
Mike Lawrence, managing director of SME reseller Bentpenny, said support and services are still a key differentiator for resellers, but large retailers with a wealth of resources are a concern.
He added that retailers are "a nuisance" because they are taking low-margin hardware sales from resellers.
But he said: "These suppliers perceive this as an opportunity for more business and that's where it could get serious for small resellers. I imagine a day will come when retailers start packaging software and support."