Intelligent Tech Channels Issue 51 - Page 24

PARTNERS ’ PERSPECTIVE

Part of the Lynchpin Media team , Manda Banda has more than 20 years of experience working for channel publications . He shares the knowledge he has learnt during that time in this monthly column for Intelligent Tech Channels .

State of play in the power retail sector in MENA

Manda Banda , Managing Editor , Intelligent Tech Channels
Manda Banda is also Lynchpin Media ’ s Managing Editor of Intelligent CIO Middle East and Intelligent CIO Africa magazines .
With vendors and distributors in the Middle East and North Africa ( MENA ) expanding the focus and dealings with power retailers , I wanted to take a look at the state of the retail sector and how this important market segment is adapting to the changing business landscape where e-commerce has boomed over the last two years and e-tailers have continued to grow and gain momentum .

There is no doubt that IT and consumer electronics retailers in the Middle East and North Africa ( MENA ) are reinventing themselves as margins on hardware sales continue to be squeezed and competition emerging from e-tailers and e-commerce sites that are not only offering competitive pricing but have also jumped onto the services bandwagon .

And with vendors and IT distributors increasing their focus on the retail channel , the power retail sector is shaping well to facilitate the smoothing reselling of consumer IT and electronics across the region . The power retail sector as it ’ s affectionately called in the region and especially in the UAE and lower Gulf countries has become well organised . From inventory management to ordering , promotions to pricing and customer management to customer servicing they are now excelling on all fronts . These are all good indicators that the channel has strengthened its foundations for the long run .
While the IT business in general did take a dip because of the pandemic and the lockdown restrictions , one sector that witnessed unprecedent growth was e-commerce as overnight consumers realised that they could buy their IT and consumer electronics needs online . Clearly , the power retailers that benefited from this boom are those that have online presence and embarked on offering omni-channel experiences to their customers long before the COVID-19 pandemic .
Indeed , consumer confidence had taken a dip in the short term as a result of the COVID-19 pandemic and lockdown restrictions imposed in the early stages of the pandemic . From a vendor perspective , most continued to engage with power retailers to ensure that there was enough support and assistance from the multinationals . In fact , most vendors saw the pandemic as an opportunity for them to ensure that their retail business remained buoyant .
Although there is no doubt that the retail channel is maturing , it still faces challenges
There is need for the power retail sector to jump onto the services bandwagon and start earning recurring revenue from the many consumers that buy hardware from their bricks and mortar stores or online platforms . relating to declining margins , lack of skilled floor sales staff , grey imports , counterfeit goods , and a lack of comprehensive post-sales support . If these things are addressed and managed correctly , the power retail sector could witness some unprecedent growth especially in the post-sales space as most people and businesses are now working from home . Clearly , this shift means a lot of consumers and small office , home office ( SOHO ) businesses will be depending of power retailers to provide the much needed post-sales support . This can come in the form of break and fix , professional services , outsourcing and the As-a-Service model .
This being the case , there is need for the power retail sector to jump onto the services bandwagon and start earning recurring revenue from the many consumers that buy hardware from their bricks and mortar stores or online platforms . Doing this will not only create peace of mind from the consumers that buy product from power retailers but ensure that most are dissuaded from seeking services from rogue IT traders who engage in malpractices like grey importing and counterfeit products . I believe all stakeholders ( vendors , distributors and the channel ) have a role to play . On the declining margins issue , IT hardware has for some time now , become a commodity and as a result not much margin can be made on certain products hence the need for retailers to explore ways on how they can add value , offer services or enhance experiences that increase footfall that leads to more sales and quick turnaround of products off their
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