Digital Planet, SA`s online electronic store, reported a 25% increase in the number of small and medium enterprises (SMEs) that purchased IT products directly through its Web sites and call centres for the period September to November 2003.
Says Neil Watson, Director at Digital Planet: "Not only do SMEs contribute more than 40% of Digital Planet`s sales, but they are buying greater volumes and spending more on products and consumables, averaging around R7 000 per transaction across our sites."
Digital Planet`s SME community consists of companies with up to 80 staff and are prominently from the professional and financial services industries.
Says Marc de Chalain a director at Cle Human Capital: "We tried Digital Planet with some of our smaller purchases and found them to be very cost-effective. The service and reliability was great, so we`ve started buying larger items such as laptops and projectors from them. Once we built a relationship with Digital, we were more than happy to spend our budgets with them."
Arthur Goldstuck, Managing Director of IT research company World Wide Worx, says: "SA is on the edge of a new Internet reality and those businesses that take advantage of the Internet will have competitive advantage. The upper income consumer is confident; they now need to be persuaded of the value proposition offered by retailers as opposed to the Internet as a concept."
Watson says Digital Planet`s value proposition lies in its competitive pricing structures and comprehensive range of IT products. "For many SMEs, price is important and resellers are generally not adding value. This is where Digital Planet comes in as a cost-effective solution for an SME`s IT needs. Some SMEs don`t see Digital Planet as their primary supplier. We supplement their traditional reseller on commodity items such as ink where we can be cost-effective and the customer knows what they`re buying."
According to Watson, the increase in the number of SMEs buying IT online at Digital Planet is due to commoditisation in IT and consumer confidence. "SMEs are buying brands that they use and trust, and are buying, for example, more than one laptop at a time; to buy a laptop online is not such a big purchase anymore."
Watson says this SME confidence follows the general trend of consumer confidence in the Internet which has been largely influenced by Internet banking and direct methods of transfer.
According to Goldstuck, only when SMEs start to discover the benefits of the online arena themselves to market their own businesses, will they adopt online purchasing across all product ranges. "While SMEs don`t look at the Internet as their primary procurement option, it is becoming an important ad hoc and backup strategy. As this increases, SMEs will buy more products online."
Goldstuck says we have already achieved two-out-of-three requirements for SA`s whole online business to boom. "We have companies that are treating the Internet as a pragmatic business tool and we have consumer confidence in online retail. All we need now is for the market to recover, which, if it does, will be the last ingredient needed to effect the Internet boom."
For more information, please contact Neil Watson, Director at Digital Planet on (011) 783 8088 or e-mail neilw@digitalplanet.co.za.
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