Fast-growing Widget decelerates for sustainable future

Distributor which has grown frenetically on the back of Fitbit sales surge says it wants to become more balanced across vendor portfolio

Distributor Widget says it is deliberately putting the brakes on its frenetic growth to ensure it does not over-stretch itself with its vendors.

Managing director David Elder explained to CRN sister publication Channelnomics Europe that top line revenue growth was not at the front of the firm's 2016 agenda. Instead, taking a more long-term, sustainable approach that involved building up less exposed vendors and stabilising partnerships across EMEA would be adopted.

"For the last three years, we've grown at almost 100 per cent each year, but it's probably wise for us to slow things down in 2016, or risk putting a strain on our management and company culture," Elder said.

Elder said that he was keen not to grow the 32-strong team by more than five and that forcing departments to evolve beyond that would damage the intimacy and agility that the company prides itself on.

"Our strength is being a really concentrated specialist, with the ability to move very quickly - you can't hold onto that when you get too big like Ingram Micro or Tech Data, so we wouldn't want that kind of scale even if we could achieve it," he explained.

He stressed that he still expected "very strong" growth next year, "perhaps of around 50 per cent," but anticipated a marked cooling from the current trajectory, in which the company is set to hit its £100m turnover target by the end of the year. This is the culmination of a climb from £18m in 2012, to £25m in 2013, to £58m in 2014.

Elder said that he hoped a more moderate rate of growth would help avert the company from "jeopardising equilibrium across the 10 vendors" it currently works with.

"A lot of our growth is down to the Fitbit surge, which is risky. Obviously we're not going to be turning down Fitbit sales, but ideally we'd like to rely on them less and build up some of our other vendors so we're more balanced."

"We don't want to be in a position where if Fitbit decided to go direct, we're not insured in some way by the rest of our portfolio," he asserted.

As such, while Widget will continue to invest heavily in wearable tech, it also plans to delve into more "best of class" smart home products and toys next year, he said.

Elder also attributed the company's European expansion to the "snowballing" of its growth. Widget has offices in the UK and the Netherlands, but operates in France, Germany, the Nordics, Benelux, Spain and Italy with a series of strategic partnerships with local distributors.

"We couldn't have that reach any other way without huge localisation and compliance issues. Working with experts who have been in their respective markets for years has definitely made us more attractive to vendors, who want us to leverage their products across as much of Europe as possible," Elder said.

He said that reinforcing these relationships in France and Germany would be an ongoing throughout 2016, namely with Wave, Gravis, Cyberport and Extenso.

In terms of the adoption of mobile computing and consumer electronics, Elder claimed "the further north you go, the stronger it gets" highlighting the Nordics as standout players when it comes to embracing the digital age, while Spain Italy and CEE were more sluggish.

Going forward, Elder said that juggling product life cycles, which vary widely across the continent, and pushing some of Widget's less established vendors would be the biggest challenges, but stipulated that both were achievable.

While Widget may have to shift down a gear in terms of growth, it will not be kicking into reverse anytime soon.