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Asian Small Businesses Look to Retail to Fill IT Needs

More than 50% of APAC small businesses (SBs) with 1 to 99 employees fulfill their IT needs via retail stores. With at least 90% of SBs driving the economy in all of the APAC countries, this translates to millions of dollars being transacted between retailers and SBs. SBs in the APAC region spent an annual average of USD 2,500 on their hardware, software and printing purchases with a substantial portion of payment being made at the register in the retail stores. The above findings were released today by New York-based Access Markets International (AMI) Partners, Inc.

A common characteristic across SBs is that decisions for IT purchases are mostly made by the business owners themselves who have the mindset of a consumer, which is retail-driven. “Typically, SBs tend not to plan for their IT purchases,” says Diana Ng, Research Analyst of AMI-Partners Singapore office. As such, most IT needs are usually urgent and small in quantity, so other purchase channels such as the VARs and SIs do not service them. The retail environment also serves as a platform for SBs to learn and compare the offerings available in the market. “Most SBs have limited IT knowledge and the sales persons in the retail stores are good information sources for them to gain IT knowledge.

SBs also have the opportunity to try out the products themselves or request a real-time demonstration which is often not available in other purchase channels,” added Ms. Ng. Push factors in the Retail Space Service offerings have also been enhanced by retail players. Many retailers offer complimentary consultations, assembly/installation and configuration services in addition to the usual delivery. SBs are also able to take advantage of the bundled deals or promotions available only to retailers from time to time. Coupled with national events like IT shows or sales period, buying off the retail shelves proves to be a smart choice. Purchasing through the retail channel also enhances SBs’ bargaining power. “In a bid to close the sale, salespersons may add in freebies such as peripherals, accessories or extended warranty to convince the SBs that the purchase is a value for the money,” noted Ms. Ng.

Financing options offered by retailers are another plus for SBs who are cautious about their cash flow situations. Hire purchases or interest-free installment purchase plans are proliferating in retail. Such schemes allow SBs more flexibility in their accounts without a huge capital outlay. All of the above signal the importance of the retail channel in selling to SBs. IT vendors should work with retailers and improve product offerings as well as provide relevant and up-to-date technical and sales training to retail salespeople.


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