Playing second fiddle seems to be a good first choice

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We provide managed EPoS and e-commerce solutions to thousands of store-based users and hundreds of web-based retailers so were in a position to see precisely how our clients businesses are faring in these challenging times.

An interesting trend is emerging.  As is widely acknowledged, online and multi-channel businesses are generally doing better than their store-only peers.  However, what we are observing is nuanced.  Its clear to us that the greatest success is coming not from pure play online retailers that sell headline items but from companies who sell spare parts, add-ons and support services. 

If you are selling mainstream products, even leading brands or those with particular cachet, competition is very tough.  This is less the case for ancillary products, often specialist items.

An example is the world of bike retailing where we have scores of clients.  Here we see that the ones who are performing best are those selling spare parts and upgrade items that are more difficult to obtain.  Their market also seems to be less price-sensitive.

Theres no doubt that the recession is encouraging us all to recycle, repair or reuse.  Add to that a green retailing agenda that is starting to resonate with more and more of us, and you end up with consumers who are slowly turning their back on the throw-away economy. 

As people are more prepared to mend or to upgrade what they have already, second tier retailers are likely to do better than their first tier peers.

Were seeing our clients in this second tier work really hard on their web sites, putting time into getting good product images loaded and making them easy to navigate.  Their field of operation is frequently not well optimised for search engines, so they have to work extra hard on their own promotion.

Their reward seems to be coming in sales that generate both high margins and repeat business.

Regards

Ian Tomlinson

Managing Director, Cybertill Limited

ian.Tomlinson@cybertill.co.uk