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How Etail Players are Eroding the Traditional Reseller Channel
Projector resellers are facing increasing pressure from the expected long-term decline of the mainstream market. However, traditional 'bricks and mortar' resellers face further challenges from online retail, particularly from mass merchandisers such as Amazon and Media Markt which are able to undercut traditional resellers partly due to their lower overheads.
A survey conducted by Futuresource of projector resellers across EU5 (France, Germany, Italy, Spain and the UK) found that close to half of those who responded had seen a negative impact on their business due to online competition. Much of the negative impact had been seen in low-margin mainstream product sales (standard throw <5000 lumens) where the resellers believed that they had lost out mostly to etail where Corporate customers required one-off replacements – this was also witnessed in Education with entry-level product, albeit to a lesser extent.
Though losses of small-quantity sales to etail competitors were frequent, it had been revealed that resellers were largely immune to the impact of etail competition when either the corporate or education sectors required large quantities for replacement or new room builds. The lack of expertise in pre-sales consultation, integration and post-sales support put mass merchandisers at a distinct disadvantage against traditional resellers.
More than half of the resellers that had seen a negative impact on their business by online retailers were actively reviewing their strategy to increase their portfolio of value-added services and after-sales support to fight against further losses from the etail channel. Though a typical trait of IT dealers, some AV dealers admitted to diversifying their product range with peripherals to boost their margins. Interestingly, despite the potential boost to their revenue from online sales, only a third of these resellers had a website of their own which allowed customers to make a transaction. This insight is a summary of Futuresource's Projector Quarterly Reseller Index.
Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.