How is the NZ reseller market changing? Where is the growth occurring? How can resellers make the most of the opportunities? What are some of the external drivers that are changing our market?
Speaking at the Ingram Micro Showcase 2013 this week, Ingram Micro MD Gary Bigwood answered such questions, discussing how the Kiwi reseller market is forever changing.
With nearly two decades of experience under his belt at the company, Bigwood holds a unique perspective on the market, and shared his insights to a packed seminar room in Auckland.
Foreign Exchange (FX):
"Why FX?," asked Bigwood. "Most of the IT products brought into New Zealand are purchased in US dollars, which is constantly changing.
"The vendors we buy from in NZ dollars however have almost taken cover.
"Even though we're buying in NZD we're still tied to the USD and in the last two months, and we have been going in one direction - down fast.
"It's chewed up a lot of media time and column inches but what I've learnt from this FX cycle is that the economists are all wrong."
After studying Business and Economics, Bigwood said he would argue with anyone that the same rules do not work within the New Zealand industry.
"Here's the deal…" he said. "If you listen to the news at the moment, the NZD is devalued and so the experts are saying exporters are very happy.
"They could be right but were they go off track is that they think NZD is plummeting, meaning companies such as Ingram Micro must be really upset.
"Hell no, we could not be happier. The press will have you believe the bottom has fallen out but now is a great time to buy us.
"And as for the future? The kiwi dollar is a complete lottery so who knows where we are going next."
Average Selling Price:
"Where do you think ASP is going?" Bigwood asked.
"It has gone up. Why? There are so many moving parts its difficult to isolate one.
"An example would be that lots more accessories are being sold and essentially, we are selling more solutions.
"Markets are tough out there and people have a tight hold of purse strings, but you can always find an end user that has a problem and needs a solution.
"Pretty much everybody has something to spend if you can offer a solution around it and as a result, we are seeing ASPs creep up."
"This is another trend I'm watching very closely," Bigwood said.
"Of the last 20 vendors that we have signed, 17 were accessory vendors.
"A recent study claims that 76% of computer buyers have bought an accessory within four weeks."
Claiming this trend to be a 'monster', Bigwood said Ingram has a responsibility as a reseller to offer a better service to end users.
"We are trying to improve this area," he said.
New Zealand is different:
"This is less than a trend more of a psychology," admitted Bigwood.
"Ingram Micro currently has more than 100 vendors, meaning we are constantly under seize from people traveling overseas.
"I spend a lot of time getting vendors up to speed with what is going on in New Zealand and why we are different.
"For starters, we have a different population spread to Australia. In the Oz market 85% of the population lives in five cities, so if you nail those five locations most of the market is covered.
"But New Zealand hasn't got five cities and if you add up the population of Auckland, Wellington and Christchurch that only represents 47% of the country, or the market. So if you don't posses a strong electronics strategy you are in trouble."
Claiming Kiwis to be "early adapters" in technology, Bigwood said New Zealand are "appalling laggards" - either at one end of the spectrum or the other, going from one extreme to the other.
"Kiwis more so than any other nation are brutally loyal also," Bigwood added. "We are amazing creatures of habit which drives amazing marketing trends which you won't see anywhere else in the world."
Tablets v Notebooks:
"How long before tablets sales in New Zealand outstrip notebook sales?" Bigwood quizzed.
Following predications from the audience, Bigwood chuckled and said: "Too late, you've missed it. It was 2012.
"If you built a business around supplying notebooks and you're not selling tablets then it could be tough," he warned. "If you're not in the tablet space you need to think about how you are going to be."
Direct shipping growth:
"I am hell bent on making sure our couriers don't get too rich," Bigwood joked, although possessing a steely truth in his voice.
"As a reseller network you guys are operating way smarter. Every reseller should be asking why are their goods going to the reseller?
"While it's never going to be 100%, obviously resellers are doing something on site which is adding value, but if it doesn't make sense don't ship it to us."
"What are you doing to connect yourself and automate with your customers?" Bigwood asked.
"If you don't do it and your competition do, you are going to be in trouble. It will happen very fast and you may not be able to catch up.
"At the start of January this year over 65% of the orders we received from resellers were electronic. We set a goal of 80% this year and we will over achieve. Stop doing the manual stuff and get costs down."
"When I stared with Ingram Micro we didn't even have a website," Bigwood said.
"From a reseller stand point, I've seen it all through the years. I've seen resellers lose a tremendous amount of money getting it wrong but also making a tremendous amount getting it right.
"Many companies posses good intentions with smart people but there is a fine line between success and failure."
Referring to the Field of Dreams 'Build it and they will come' philosophy, Bigwood dismissed such an idea in New Zealand.
"It does not work for Kiwi resellers," he claimed.
"Make sure that your customer base wants it first and foremost, then make sure you are giving them what they really need.
"New Zealand as an industry is lagging behind here, there is no argument. We are about four years behind most of the first world countries so there is an opportunity to change this."
"BYOD keeps me up at night," Bigwood laughed.
"But seriously, how do you control it? We rolled out Fortinet which is complete visibly meaning we can now switch on websites such as YouTube with confidence.
"Smartphone BYOD is a critical path for this industry and this is a trend that we are all over as so much of this industry is going in this direction."
"On Premise Cloud? It has already happened," claimed Bigwood, leaving the most obvious subject until last.
"Kiwis are market leaders in On Premise Cloud - we are number one no question. We have multiple software vendors that we represent - 30% On Premise and 70% traditional licence, and the shift is growing."
Do you agree with Bigwood's trends? Tell us your thoughts below