Retail market will be the most lucrative, says Evans analyst

Canadian resellers say that retail and professional services will be the hot vertical markets for this year and next.

According to an extensive reseller survey conducted by Evans Research Corp. of Toronto, the retail and professional services sector share top spot as the most critical business

opportunities with seven per cent each. The report was based on 175 qualified respondents, 79 per cent of which had fewer than 50 employees.

Retail and professional services was closely followed by financial and education markets. One market area, the federal government, was down according to the report.

Michelle Warren, market analyst for Evans and the author of the report, said the government market froze just when the survey was started and this market’s dip maybe up next year.

“”With the federal government spend not there, resellers had to look for new business opportunities,”” she Warren.

Warren added that point-of-sale or the retail vertical market is lucrative because it can involve many products, including sales force automation, CRM, inventory management systems, payables/receivables software, hardware, new monitors and other networking opportunities. “”It’s huge, and you have the existing wired solutions plus the wireless solutions that are coming through,”” she said.

She added that monitor sales in retail and professional services, which include offices, are also on the rise because customers are willing to upgrade from CRT to LCD displays and even to displays that larger than 21-inches in size.

In fact, upgradeability features ranked highest amongst reseller respondents in this report as the main contributing factor for product sales at 23 per cent closely followed by total solution sales.

In the professional services market, the resellers surveyed found this is where their services practice came in.

“”Services are a have-to-do, already done, still need to do, and looking to continue to do in the future item,”” Warren said.

A whopping 49 per cent of respondents believe they can create more services revenue this year than last. Security was the most critical services offering to have at 31 per cent, followed by mobile/wireless at 24 per cent and disaster recovery at 15 per cent.

Linux finished a surprising fourth in this category at 13 per cent.

In the report, Warren said there was a strong sign customers are refreshing PCs. New computers ranked as the number one hardware product a reseller could offer a customer, at 20 per cent. PCs tied with networking and communications hardware, which also scored 20 per cent in the survey. It wasn’t a surprise to see Cisco Systems crack the top five most popular hardware supplier category in the survey. The most popular hardware supplier was HP at 18 per cent, closely followed by Dell.

Dave Frederickson, HP Canada’s newly appointed vice-president of its solution partner organization, was not surprised at the Evans findings.

“”It’s driven by a number of things. Dell did a very effective job of selling the supply chain, cutting out the middle man and marketing – and they’re a great marketing machine. So I’m not surprised as a result of that.

“”One of the things we need to do with our partner community is do a better job of articulating and quantifying and selling the value of the partner community overall. Now, there’s a group of customers out there that frankly, feel very comfortable with the (direct) model, and it works, so again, I’m not surprised by it.””

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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