PC customer buying preferences will continue to push the PC market from direct to indirect during the next four years, forcing manufacturers to do a better job of customer segmentation and go-to-market strategies.
According to Gartner, the indirect channel accounted for 66,6% of worldwide PC shipments in 2004, and it grew to account for 74,3% of shipments in 2008 due to emerging market expansion.
"The direct sales channel is still showing customer preference in certain segments such as enterprise, government and education and some professional segments in mature markets," says Tiffani Bova, research vice-president at Gartner. "However, strong consumer and small office/home office (Soho) market growth will lead to consistent growth for the retail channel, and we can expect to see growth from a variety of non-traditional PC retailers."
Bova says telecom retailers will also begin to play a much more active role as a viable mobile PC channel, especially with mini-notebooks that are being bundled with remote access (third-generation [3G] contracts) in Western Europe, Japan, Singapore, Taiwan and the US.
Direct market resellers (DMRs) will be the fastest-growing indirect sales channel – although the market size will be relatively small at less than 5% of the total market by 2012 – and will continue to play a crucial role in any PC manufacturers¹ go-to-market (GTM) market model, especially in the US.
Gartner says the burgeoning indirect channel will be driven by strong growth of products focused on the home and small and midsize (SMB) customers in both mature and emerging markets that show a preference for purchasing via indirect channels (retail and VAR).
For the home and Soho segment, most customers prefer retailers for their PC purchases, allowing them to shop for multiple brands, features and functionality and price, all in one place.
In mature markets, the direct channel comes second to retailer store fronts, with a sales volume of less than 10% of the segment. In mature markets, retailers with actual store fronts are also the dominant channel for consumer PCs, and Gartner predicts that future growth during the next four years will be fuelled by steady home market growth in both mature and emerging markets.
SMBs prefer a combination of both the direct and indirect sales channel when purchasing PCs, although the smaller the business the more buyers prefer the indirect channel, including VAR and DMR (in the US) channel, due to price, availability and pre- and post-sales support. In some countries, a face-to-face business relationship is critical to the sales process, which would greatly increase the cost of sales for manufacturers if they didn't leverage third-party channels.
"The distribution of PCs has always been a complex logistics exercise and, during the last two years, the channel has been particularly volatile with a declining average selling price (ASP), increased channels to market, consolidation and the introduction of new brands and technologies to the market," says Bova. "Building a robust and comprehensive GTM strategy is critical to the overall success of a PC manufacturer. Building a one-size-fits-all product or channel strategy will not deliver the flexibility or responsiveness customers are looking for in today¹s market."
In the current economic climate, meeting the customer where they want to buy, with the products they are interested in, must receive the highest level of attention by PC manufacturers.
"With predictions of an unprecedented PC market slowdown in 2009, how PC manufacturers keep demand and brand loyalty high will come down to the attention spent on GTM and account coverage initiatives," says Bova. "Shoring up partnerships with channel companies (retail, VAR and TSP) and distributors has the ability to provide tremendous competitive advantage. This building of multichannel sales avenues opens up touchpoints and customer contacts with reduced costs versus selling and supporting customers directly."