Beating the consumer spending slowdown

The channel angle

In February, distribution giant Ingram Micro launched its consumer division focused on integrating consumer electronics (CE), networking, security and digital signage into the home and office environment.

The CHOS division launch was seen as a significant push into the consumer market by Ingram, preceded in June 2007 by the acquisition of consumer electronics and accessories distributor DBL Distributing.

Matthew Sanderson, director of product management and marketing, Ingram said at the time of the division launch: “Due to ongoing digital convergence, IT and CE products are merging; in recognising this Ingram Micro has allocated dedicated personnel to cater for increasing demand in the area of consumer home and office solutions. The launch of the CHOS Division at Ingram Micro will provide a ‘one-stop’ shop for resellers.”

Jacqueline Bergin, business manager for CHOS at Ingram Micro, agreed that the slowdown in spending had affected the consumer electronics market, with interest rates starting to bite at the consumer level
and their spending habits.

“However this is very much on a product byproduct basis. Areas that are continuing to sell well are home theatre systems, GPS, Network Attached Storage, digital photo frames, peripheral products that attach to a HD solution, low-priced PA products and projectors,” she said.

In terms of products which resellers should look to supply, Bergin cited Network Attached Storage, portable and standard AV Technologies, GPS and
Blu Ray.

Rick Gawdat, general manager of sales and marketing at distributor Brightpoint, concurred that the spending slowdown is only hitting certain parts of the consumer electronics sector.

“There has been a slight slowdown in consumers upgrading their mobile handsets but this has only really been in the last four to six weeks. By slowdown, I don’t mean a complete hand brake but consumers are just being a little more cautious and selective when it comes to making a purchasing decision on handsets. On the flip side, the recent launch of the Apple
iPhone has been extremely successful and has met most expectations.”

Gawdat said many consumers are waiting to see what the Reserve Bank does with interest rates in the next few weeks and the situation may improve on the back of a cut. Plus, the price of oil has come down a bit recently and this should also play a role with spending, he stressed.

“Conditions are tough and very competitive, but this is no different to any other time in recent memory. As consumers become savvier with technology and they continue to get more choices it will be brand, efficient supply chain management and product performance that will prevail. Resellers and retailers need to continue to provide options and value adds to their customers and to focus on customer service during this period,” added Gawdat.

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