Future of South African computer shops

While computer stores in South Africa have had a rough few years, several retailers are optimistic about the future.

“In general, South African PC stores have been adversely affected by the current economic climate,” Dreamware Tech co-founder Jess Raftopoulos told MyBroadband.

“Few are large enough to undercut the market in their favour, but generally, consumers and retailers alike are under significant expenditure constraints.”

Raftopoulos said several PC stores have either been declared financially insolvent or have closed their doors in recent years to pursue more lucrative careers due to the mounting pressures within the sector.

“This can be observed from small start-ups to commercial enterprise brands such as Intel, which recently announced mass layoffs throughout the company,” she said.

“That being said, we foresee a silver lining in the future.”

Raftopoulos said that with interest rate cuts expected in the next few months, South Africans may see the burden on their wallets lift slightly.

“At present the PC retailer market is heavily saturated — largely attributed to the spike in demand for tech during the pandemic and the subsequent switch to work from home,” she said.

“However, we anticipate a reduction in tech stores and a stabilising of the ICT industry once the overall economy improves.”

Asked what their secret is to remaining competitive in such a saturated market, Raftopoulos said that this is largely dictated by a store’s purchasing power, and general modalities and business acumen.

These factors ultimately serve as key differentiators in the eyes of the consumer, said Raftopoulos.

“Certain stores leverage their buying capacity to remain competitive, while others use their unique service skills to distinguish themselves,” she said.

“Dreamware has always prided itself on being a wholly customer-centric brand with a forthright eagerness to disrupt the sub-par service culture synonymous with our industry.”

Raftopoulos said they work to remain competitive through continual customer experience improvements and trying to ensure the best feasible prices.

Progenix founder Jonathan Horne believes the future will always include independent computer stores, as you can’t approach mass retail for decent purchasing advice or support.

“If, for example, you want to buy a new graphics card but don’t know whether your power supply is sufficient, the dominant online stores not only don’t have means to enquire, but likely don’t know the answer anyway,” he said.

“If it’s more technical, such as finding out if an extremely high-speed kit of RAM will work with your system, it takes above-average knowledge to know what will or won’t work regardless of what a spec sheet says,” said Horne.

“A motherboard having the option to run high memory speed doesn’t mean it can, much like a speedometer going to 260km/h doesn’t mean your car can actually do that speed.”

Horne also said that mass retail generally wouldn’t research what’s best for the customer’s individual needs and offer something uniquely tailored to the customer.

“For example, if a customer has a request to run a certain game at a certain resolution and refresh rate, or wants an SSD with amazing reliability regardless of what the warranty implies,” he said.

“Mass retail will rather push something that’s on hand and as close to the price-point as possible as their goal is to make sure you don’t walk out empty-handed.”

Horne believes his secret to remaining competitive largely comes down to one-on-one interactions — which he says heavily influence people’s opinions of a company.

“Whether negotiating a multi-billion dollar oil deal or purchasing a new cellphone, a large part of success or failure of the deal is down to the way you are treated,” said Horne.

“Treat your customers as an asset, not a money machine. If you think they’re making a poor decision, advise them accordingly, even if it means a potentially smaller sale.”

Horne said customer loyalty is far less common than in the past, with price often taking priority.

However, a customer who saved 20% or even potentially an entire second purchase by being advised against his original plans is far more likely to remember and recommend you than someone who simply received what they ordered.

“When things go wrong, put yourself in the customer’s shoes and see it from their perspective,” he said.

“Sometimes you have to make an executive call that is better for the customer and worse for the business short-term, but long-term works out best for everyone.”

It is important to note that Dreamware Tech and Progenix are both online-only businesses with physical offices but not outlets.