Selling the value of superior storage devices

Channel ME spoke to Pascal de Boer, VP retail sales and marketing, EMEA, at Distree’s Digitial Consumer Channels event, to find out about the company’s plans for Middle East retail.

Tags: SanDisk CorporationUnited Arab Emirates
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Selling the value of superior storage devices
By  Mark Sutton Published  June 13, 2011

Channel ME spoke to Pascal de Boer, VP retail sales and marketing, EMEA, at Distree’s Digitial Consumer Channels event, to find out about the company’s plans for Middle East retail.

Channel Middle East: What are you doing at DCC?

Pascal de Boer: It is an opportunity for us to meet the channel, it is a good environment for planning discussions with retailers on how to get more value out of our product categories. Our products are attached to hardware, and what we see in this region compared to other regions, is that there are still big opportunities in attach rates, for selling cards with hardware, and also for selling more performance cards, higher performance and higher capacity, in order to get more margin out of the sale with the customer.

We are having a lot of discussions about shelf space, how to better cross-sell, how to sell up, and we have a lot of retail marketing concepts that help retailers do that. The retail business is growing, with very healthy growth, but we are looking at acceleration of growth. Growth rates in the last year here have been quite amazing, and we expect another doubling of our revenue next year. We are not eating share from others, because we are the leading brand already, but we are able to develop the market, which is interesting for the channel.

CME: What are the retailers here doing that is driving that growth?

PD: One of the differences where this region stands out is retailers are interested in pricing and their margin of course, but they are even more interested in managing the categories and how to grow their business, because they see that this is a highly profitable, growing business for them, and its not a complex one – there are not many SKUs, there are no returns, it is not technical, it is a pretty easy business. It does require some training, so we have beefed up our offering in value programmes for retailers, so that they are then able to provide value to their customers.

CME: What sort of training are you providing to partners?

PD: Training on the products, and helping the consumer to understand what products he needs to buy, in order to get the maximum performance out of the hardware he just bought – take the example of a camera, if you just bought a $500, $1,000 DSLR, if you don’t get the right card, you’ll only get the performance of a $200 camera. We translate that into very simple things for clerks to use in the stores, and we do that also through signage and shelf management, information displays close to the hardware, so if you are buying a camera, you get information at the point of sale of the camera about which card to use.

CME: Are you looking for more resellers and retailers in this region?

PD: We are happy with the partners that we have. From the distribution side we get the coverage that we need with our current distributors, with retailers we are wherever we want to be, we are trying to expand with them, and have them manage the category differently.

CME: If it is a simple product, is there a risk of commoditization in the segment, that will hit margins?

PD: The essence of it is that marketing works. If we deliver the right marketing tools, which so far we have been able to do, we don’t have that risk. Part of our business is commoditized, there is certain usage and certain end users that attribute no value to the products, and we have products and channels that serve that, but you will find that all in all, in the eyes of the end user, they are putting their lives – pictures, texts, things that are personal, on to our devices, so it has a value. Sometimes the channel degrades in value because they want the volumes, but what the team here has been able to do is separate the two. There is a commodity business, and there is a marketing-sensitive part of our business that we exploit.

CME: How easy is it to keep the two separate, particularly with regard to grey market?

PD: We have a lot of people that are experienced in managing global distribution, so we able to control that very well. Our pricing is very competitive as well, we know how to avoid issues.

CME: What do you have planned for the regional channel in the next twelve months?

PD: We are putting a lot of effort into training, we are coming up with localised e-learning, which we are targeting at retail and SMB.

We have a lot of new USB SKUs coming up with security features, that add a lot of value rather than just selling the product and we know that when we send our specialists to the retailer to help them manage the category better, that model works, so we will add resources in this channel to do more of that with our retail partners in the region.

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