February 17, 2021
Searching for electronics online at giants like Coolblue is pushing the little ones under pressure. The number of Flemish PC stores collapsed in the past ten years. “This is a cutting edge market.”
Seven people work in the Leuven electronics store Digame. “It is a small building,” admits manager Annemie Lannoy. She deliberately keeps it small-scale. ‘I was sometimes asked whether I would not expand to multiple stores. But I want to keep the relationship with the customer personal. ‘ That customer is usually over 30 and wants to inform them accurately. Successfully. Turnover has grown steadily to 4 to 5 million euros in recent years. Although it also helps that KU Leuven and UZ Leuven are customers in the student city.
Digame holds out. But it is the exception in a competitive market, partly due to the success of major online players such as Coolblue. The Dutch online retailer, whose origins lie in electronics, already achieved a turnover of 550 million euros in our country in 2020, a growth of 50 percent. This explosive growth contrasts sharply with the health of the small PC stores in Flanders. Between 2009 and 2019, the number of stores specializing in PCs or associated equipment and software decreased by 28.6 percent, from 2,210 to 1,576. This is evident from figures from Statbel.
The reason for this decline is partly due to the rise of e-commerce, says Els Breugelmans, KU Leuven professor specialized in the subject. ‘PCs and electronics are pre-eminently products that lend themselves to an online purchase. They are functional products with similar characteristics. The service provision has already been optimized online, with filters or questionnaires about the purpose for which you want to use the product. ‘ Add to that the classic e-commerce perks like home delivery and no closing hours, and the fate of the PC store seems sealed.
The PC and electronics market is not very merciful to the little ones in other areas, says Bram Van Hauwermeiren of HVH Systems from Dendermonde. His father started the business thirty years ago and he also manages to survive, with six employees. Three years ago the company moved to a new, better location. ‘The products change quickly, you have to constantly keep up with the novelties. I make sure that I never get too large stocks, because a stock is quickly outdated. Sometimes I pick up things from the supplier the same day. ‘
Another shortcoming is the notoriously low margins, below 10 percent, in the sector. Buying online increases the pressure on prices. Anyone who can buy large volumes can negotiate a better price, ‘says Breugelmans. Players who are active in different countries have an advantage over the local players. The small PC stores are hiding under the umbrella of larger ones in response. Digame is part of the Selexion dome. ‘It is our purchasing group, but they also built our webshop,’ says Lannoy. “But it is still a cutting edge market.”
At chains, sellers get a note early in the week: this is how much of each you have to sell this week.
The little ones each have their own recipe or emphasis to break free from the stranglehold of online players. But the common thread is ‘customization’: selling to the customer what he needs, nothing more or less. ‘People come over to us with a PC that they got from Coolblue or another chain. These are often PCs that do not fit the profile of those people, ‘says Van Hauwermeiren. ‘Older people who only use their PC to send an email don’t need a PC with a heavy graphics card.’
Listening to the customer and responding to what he wants is how he tries to make a difference. ‘At chains, sellers get a note at the beginning of the week: this is how much of each you have to sell this week. Each customer will then receive the same PC. When thirty customers come to our house, thirty times a different explanation follows. ‘ Lannoy is also keen to sell what the customer does not need. ‘I don’t want to sell more or less, but the right thing. Our business is built on word of mouth, from people who know where they can rely on us. ‘
The smaller PC stores also try better than the Coolblues to exorcise local SMEs, schools or governments. They are eager to see the 375 million euros that Flemish Minister of Education Ben Weyts (N-VA) allocated once for the digitization of education. The self-employed organization Unizo pleaded in a letter to Weyts and the Education Committee to encourage schools not to overlook local entrepreneurs. ‘Schools don’t always have the reflex to look at local entrepreneurs.’