IT Firm Says U.S. Small Businesses Prefer Buying IT Products Online
AMI Gives Reasons Why
AMI says small businesses in the US are increasingly relying on online channels to purchase computing hardware and packaged software solutions.
“This is a far cry from the days when retail stores and channel partners were the only relevant channels that catered to SBs,” the firm says. “Channel partners and retailers still have the highest share of SB spending on basic computing products (such as PCs, printers, peripherals, etc); these channels, however, are slowly losing share to direct market resellers (DMRS) as well as online vendor direct.”
According to AMI, factors considered in why more small businesses are buying IT products online include:
– The SB PC and printer market is almost fully penetrated (especially in mature countries like the US), so most new purchases are replacements. SBs are therefore more informed and knowledgeable about their needs, making online channels a more efficient buying experience versus visiting a retail store.
– Low prices and customizable configurations available online create a straightforward purchasing experience for SBs.
– Traditional hardware resellers—value-added resellers (VARs)—are shifting their business model towards services due to low margins in IT hardware, which allows DMRs and other low-cost online channels to grab that share of the market.
– In addition, the economic downturn forced many SBs to look for channels that offered lower costs for new purchases and upgrades.
These trends, AMI says, are more unique to the US and EMEA markets, while in APAC and other emerging countries, small businesses still prefer to buy from local IT stores (or, storefront VARs) and channel partners.
“Local computer/electronic stores, also known as storefront VARs, still have a strong presence in emerging markets,” says Avinash Arun, Manager of the Channels Practice at AMI. “IT maturity among SBs in emerging countries is low (compared to the Americas and Western Europe), and therefore these firms especially need external support for sustaining their IT environments. The local stores serve the purpose of both a retail store and a channel partner: a small business owner or IT manager can walk into their neighborhood electronic or IT store and have a ‘touch and feel’ experience, while receiving essential service and support for installation, maintenance, troubleshooting, etc.”