Reports of the demise of brick-and-mortar retailing in the personal computing category are exaggerated. Local entrepreneurs agree that niche stores are better able to serve small businesses.
Retail sales outlets are able to leverage the ability to offer a wide selection of brands and product categories, according to industry observer Stephen Baker, director of the NPD Group. The New York-based company, which provides consumer and retail market research information, has offices in Bentonville, Ark. and Austin.
Offering a wide range of products enabled retail stores to take advantage of the sales opportunities in categories such as computer accessories that generated faster growth than the online or direct channel, Baker said.
“People want to go to the store because it is a tactile purchase,” Baker said. “They like to be able to see how they work, see how they feel in their hands, see how the screen looks and the weight of the product. You cannot do any of those things online.”
Revenue for notebooks and PCs was $29 billion last year, up 16 percent from the $25 billion in 2006. Industry figures indicate the rate of notebooks and PC dollars being spent in retail is growing as 53.4 percent was spent in stores and 46.6 was spent online last year. In 2006, retail pulled in 51.6 percent of dollars while online those products made up 48.4 percent of sales.
There will always be a niche for stores serving small businesses, said Bryan Sensintaffar, owner of PC Computer & Software Inc., 8125-G E. 51st St.
“I think there will always be large retailers that sell solely on price,” he said. “The problem with this is there is no loyalty if you sell on price alone. There will always be someone that will undercut you.”
The big box stores like Wal-Mart and Best Buy will always be around. Small stores that can provide more personalized service will always have a place as well, he said.
“Ninety percent of our customers purchase from us because of the personal relationships. That is never going to happen over the Internet,” Sensintaffar said. “People will always need to interact with others, as we are social beings. We are often working with small business owners. Their time is valuable but they cannot afford to order the wrong parts, or take a chance with hiring a teenager to move and protect their data. This is a personal sales process that requires seeing and listening to the customers problems and concerns. Then we create a solution that works for that customer.”
However, David Evans, business development manager at Aktek Computer, 3972 S. Hudson Ave., believes the Internet can be a threat to brick and mortar businesses.
“The majority of home users now know or have a son or daughter that knows something about computers. That makes it easy for them to pick something out online. Combined with the fact that service at the larger retail environments is not that good, it makes it easier to order online,” he said.
Also, at one point business users would go to a retail store to purchase equipment. Today, they are part of the change as the computer industry is using Managed Service environment, he said.
“They tend to purchase from online sales reps,” he said. “So, they are not going into a brick-and-mortar location.”
Retail outlets are able to leverage the ability to offer a wide selection of brands and product categories, Baker said.
Discount companies like retail behemoths Wal-Mart and Dell have sucked the profits out of the computer and electronics world, Sensintaffar said.
“So, a traditional brick and mortar must also add services to survive,” he said.
Evans agreed that it gets expensive to stock a wide variety of items.
“If they don’t turn quickly you have to sell them for a higher price so you can’t compete,” he said. “We are seeing more specialty stores where someone can come in and pick something up right off the shelf because they can’t wait for delivery.”
Local merchants spend a majority of their time and resources on education in various forms, Sensintaffar said.
“We do lots of webinars with product manufacturers, we also do Microsoft certification training,” he said.
Two dominate trends in the industry are managed services and security.
Managed services isa fairly recent arena for the small business sector. It is preventative maintenance.
“This allows us to monitor customers’ workstations, servers, routers, switches and other devices 24/7,” Sensintaffar said. “It provides us the capability to see hardware and software issues before they become problems that cause downtime or data loss.”
Corporations have been doing this for years, but it has become affordable for the small companies recently.
Security is a broad term that includes everything from dealing with spyware and viruses to data backups.
Consumers must deal with spyware and viruses, which are the biggest and most infamous threats, Sensintaffar said.
“You must have anti-virus and anti-spyware programs on your computer,” Sensintaffar said. “But, none of these programs are 100 percent effective.”
Other threats include hackers.
“If a hacker can find access into a server he will use it to send millions of spam messages all over the world,” Sensintaffar said. “Or, he may steal any data he finds on the server. Once he is done with your server he will likely post information on bulletin boards for other hackers to use your server. You cannot assume that you are too small to be a target.”
Spam filtering is another hot topic, Evans said.
“Spam is a consumer driven problem. As consumers get educated and no longer purchase or read or whatever the spam is trying to get them to do, and it is no longer profitable for the spammers, they will stop it,” Evans said. “It is simple economics.”
Virus and malware are different issues because they are criminally driven, Evans said.
“They are trying to steal information, and that will always be a problem. ?