The consumer electronics sector in South Africa is headed for great growth, according to researchers who say the local market for computing devices, mobile handsets and video, audio and gaming products is on the up and up.
Business Monitoring International (BMI) says the market for consumer electronics in SA is projected at over R500 billion for 2011 and will rise to well over 700 billion by 2015. This growth is driven by rising incomes, rising computer penetration, South Africa's economic recovery as well as product innovation by manufacturers.
Good news for Incredible Connection and CEO Dave Miller, who says accessibility to technology will drive economic growth. “Research shows just having access to mobile connectivity has a direct positive impact on GDP. Of course, as the economy expands, more people will want technology - particularly mobile devices.”
What hurt Incredible Connection and the broader sector recently is currency fluctuations. “The exchange rate does have a dramatic impact on our business. Whenever the rand strengthens against the dollar, as it did recently and continues to do so, it creates a deflationary pressure on pricing. Items become cheaper, which is great for the consumer,” says Miller, who adds that the fluctuations are less favourable for retailers who have to create value to drive volumes.
More is more
Last year Incredible Connection sought to add value to customers with a free broadband offering. Miller says the gambit makes it easier, more affordable and gives customers greater use of the products offered in store. The brand strategy is about creating customer intimacy and building long-term relationships with consumers. “No one else is doing this, so it differentiates us markedly from the competition. The model was set up and built around convenience, ease of use and high levels of customer support. Uptake has been exceptionally encouraging and we have no reason to believe it will tail off.”
The iPhone and iPad are my most remarkable gadgets.
Dave Miller, CEO, Incredible Connection
Fluctuating currencies is just one of the business challenges Miller's had to deal with. Others include ensuring his stores have the ability to consistently secure leading edge technology in the right volumes. “We do this while ensuring that we aren't lumbered with excess old stock that becomes outdated and loses value. Allied to this is having the ability to bring customers the best technology faster than anybody else in the market. Achieving those two things means managing currency fluctuations, scarcity of skills, and managing our dependence on international vendors who are trying to satisfy global demand, while delivering on our need to meet the needs of a local market. We're still waiting for the iPad, seven months after its international release.”
Another ongoing challenge is customer service. A tour of local complaints sites shows that the consumer technology retailer has its fair share of bad press on issues related to service, staff apathy, misleading advertising and stock shortages.
Miller's response to this does sound a lot like the usual spin. “The only way to get service right is to create an organisational culture of service excellence. To do that your processes and customer touch points have to be designed to deliver service excellence. You also have to employ the right type of person. And, you need to constantly engage with your customers, at every level, so that you understand what they need and want and where you're not fulfilling their expectations. Then, you have to drive a continuous improvement cycle so that you can be sure of always giving customers the service they expect, pay for, and invest in.” They say retail is detail and where Miller's right is that service is a daily routine that lives in continual conditioning, and is reinforced by a pervasive culture and happy staff. By the looks of complaints boards, Miller still has some way to go on this score.
Getting interactive
Where Incredible Connection can differentiate is through its size, reach and ensuring it has state-of-the-art products. In terms of gaming, Miller says: “Gaming is all about interactivity and vendors are focused on continuous innovation of interactivity, including enablement of 3D. The intensity of your involvement with the game is going to get better. For example, Kinect from Xbox and Move from PlayStation 3 allows you to become the player in the game. They track and monitor your motion in real-time based on the game you are playing at the time. As the technical ability to do that evolves so the graphics become better and the game becomes more realistic and intense.”
In personal computing, Miller says tablet devices with touch screens are where it is at, and this is the technology that most excites him. “Tablet format devices with touch screen technologies, such as the iPad, Samsung Galaxy and Dell Streak, are going to fill the middle-ground gap between the notebook computer, netbook and smartphones. For me the iPhone and iPad are my most remarkable gadgets because they're small yet so incredibly powerful and intelligent.”
Miller's business philosophy is to consistently practice stewardship, to be open, honest, and direct enough to have the crucial conversations. The best advice anyone ever gave him is that nothing worth having comes without hard work, energy and commitment.
A man who says he's made his fair share of mistakes, Miller adds that there's nothing he regrets. “Mistakes are lessons. Without them, growth is not possible. The rest is up to you.” With a consumer electronic boom time ahead, currency fluctuations waiting in the wings and customer service a continual multi-headed beast to battle, let's see whether Miller takes his own advice in 2011 and realises growth for Incredible Connection on the back of past experience.
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