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Market Trends, the Perspective of French Resellers

Stéphanie Algré, Country Director France at CONTEXT
Stéphanie Algré, Country Director France at CONTEXT

As it does every year, CONTEXT surveyed more than 7,000 IT resellers in order to capture the latest trends in the IT market through the eyes and opinions of resellers, to better understand their expectations, to better understand the impact that the health crisis may have had on their business and to see how they perceive the future.

On the opening day of the IT Partners exhibition, CONTEXT unveiled the results of the French market survey conducted online from April to June 2021.

B2B resellers' areas of investment for the next 12 months and promising business sectors

For B2B resellers, the four main areas of investment for the next 12 months remain completely unchanged from 2020. Cloud products and services top the list of investment intentions for 53% of resellers, followed by network products for 40%, cybersecurity (38%) and desktop optimisation (34%).

The appeal of datacenter solutions is growing for resellers, as this category now ranks fifth (for 12% of resellers), on par with Devices as a Service, while datacenter solutions ranked eighth a year earlier.

When asked which volume product categories they believe demand will continue beyond Q1 2021, 64% of resellers believe demand will continue for laptops and tablets, and 57% for teleworking equipment, printers, monitors, headsets, webcams and security.

As for the business sectors that resellers believe offer the best growth prospects in 2021, they point to 'business services' (favoured by 61% of resellers), retail (33% of resellers) and healthcare (32%) as the growth leaders in the IT market.

Extent of out-of-stock situations for resellers

Stock-outs... It's hard to ignore this issue. So what has been the impact of stock shortages on resellers? 94% of French resellers say they have been impacted by stock shortages to varying degrees: 55% of them say they have been "very impacted" by these shortages and 39% "somewhat impacted".

And to manage this product shortage situation, a large number of retailers (67%) had to make adaptations to their supply chain. These adaptations have taken different forms.

A disruptive impact of the health crisis on collaboration with wholesalers and suppliers

What adaptations have resellers had to make? Many retailers have had to work with new distribution partners, both suppliers and wholesalers: more than one in two French retailers (52%) say they have sourced from new wholesalers and one in four (24% of retailers) have made changes to their manufacturer portfolio or started working with new manufacturers.

And indeed, the health crisis has had a strong disruptive effect on the distribution chain and the ensuing adaptations have naturally had an impact on resellers' business with their main wholesaler.

Impact of the health crisis on the activity of resellers with their main distributor

As regards the repercussions of the health crisis and stock shortages on the activity of resellers with their main wholesaler, almost 1 in 2 resellers (46%) say that their activity with their main wholesaler has decreased, slightly less than 1 in 3 (31%) say that their activity with their main wholesaler has remained unchanged, and almost 1 in 4 (23%) believe that their activity with their main wholesaler has, on the contrary, increased because of the health crisis.

What about the impact of the health crisis on turnover?

When asked about the impact of the health crisis on their turnover, opinions are far from homogeneous: 39% of dealers say their turnover has decreased, 33% have seen it increase and 25% have seen no change.

Covid & Accelerating digital transformation

Did the Covid crisis accelerate digital transformation? CONTEXT asked resellers if the health crisis had accelerated digital transformation for them as resellers, to which question only 29% answered positively, with the vast majority of resellers answering negatively (69%). In contrast, when asked the same question, but this time on the side of their customers, 62% of resellers said that the covid crisis has accelerated their digital transformation.

In which areas has the acceleration of digital transformation been most significant?

The acceleration of digital transformation among reseller customers has been for the benefit of security (43%), employee experience (42%), customer experience (38%) or moving to the cloud/as a service (33%).

Resellers and financing

When it comes to the topic of financing and any difficulties resellers may have with it, the picture is mixed, with just over half of resellers (51%) saying they have no difficulties with financing, and the other half (49%) saying the opposite. The proportion of resellers who say they have financing problems is slightly up on 2019: two years ago, 45% of resellers said they had problems.

What are the difficulties faced by resellers?

''The main concern is related to longer payment terms (for 29% of resellers surveyed). 14% of dealers report difficulties in obtaining finance from wholesalers and manufacturers and 13% report difficulties with non-payment. But despite the financing difficulties that some resellers may face, they are nevertheless optimistic", says Stéphanie Algré, Country Director France at CONTEXT.

Resellers satisfied with past performance and optimistic about the future

When resellers were asked about their companies' performance over the past 12 months, more than half (54%) said it had been good, 38% said it had been average and only 8% said it had been bad.

When it comes to forecasting business performance over the next 12 months, French resellers are generally positive: half of them expect their performance to improve (51% compared to 36% a year ago), 43% expect it to remain the same, and only 6% expect it to decline. This compares to 26% who expected a decline in business performance over the next 12 months last year. The good news is that the mood among retailers is decidedly more optimistic than it was a year ago.

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