Profiting from the Supply Side4 Aug, 2003 By: Kit Lisle imageSource
Profiting from the Supply Side
Saavy dealers looking for new markets to explore would be
wise to consider the computer supplies and accessories arena. The U.S. market
for computer accessory products, measured by total end-user purchases, was $6.07
billion in 2002 and is growing at approximately nine to eleven percent overall.
The market for computer accessories includes the following
Cables, Cable Fasteners and Connectors
UPS Devices. o Aftermarket Input Devices and Related
Accessories (Non-ergonomic mice, joysticks, keypads, touchpads, trackballs,
Pointing devices o USB Hubs
Ergonomic Accessories (Copy holders, keyboard accessories
and keyboard trays, glare filters, monitor arms and risers, keyboard
drawers, wrist rests, back rests, foot rests, stands and racks for CPUs and
Printer Stands, Racks, Holders.
Cleaning and Maintenance Kits Supplies (Air canisters,
wipes, solvents and solutions, dust covers, tool kits).
Media and Media Storage (Portable and desktop).
Media Label Kits. o Security Devices (cables, locks,
Portable computer carrying cases.
There are many opportunities for growth depending on the
segment or segments a dealer should choose. Some areas however, such as media
storage, media labels and security devices are growing much more rapidly. The
chart below shows each product segment's relative growth from 2001 to 2002.
Ergonomic Accessories (3% growth)
Stands (4% growth)
Cleaning and covering supplies (11% growth)
Surge Protectors/Cables/Connectors/UPSs (12% growth)
Aftermarket Input devices and related non-ergonomic
accessories (13% growth)
Security devices (15% growth)
Media Storage (17% growth)
Media Label Kits (25% growth (up to 100%))
Source: 2002 SHOPA Computer Accessories Flash Report
Electronics Market The electronic segment of the computer
accessories market is typically driven by PC sales, which are, of course,
declining. There are, however, some sub-segments of the market that are doing
surprisingly well and, because of technological advances, will continue to
flourish as businesses and consumers upgrade computers and their components.
Uninterruptible Power Supply devices (UPSs) and surge
protectors/arrestors represent the largest product categories in the electronics
market for computer accessories. Declining prices have helped to fuel more rapid
growth than the products have seen since their introduction. Because
consolidation of UPS providers is ongoing, there are only a small number of
relatively large competitors. UPS has broad applications well beyond the
computer industry, and its importance has grown as business and consumer
While cables that connect peripherals to PCs are fast
becoming a thing of the past, USB hubs and mobile communications devices are
vying for space on today's computers. Office equipment dealers who recognize the
advantages of remote control signals may find themselves in a position to offer
connectivity equipment to customers as an extension to their existing service.
Low-Tech Accessories The non-electronics segment of the
market is driven by mobile computing hardware and digital media. These products
are constantly changing as new designs and improvements affect purchasing
Each year, 1.8 million Americans suffer on-the-job repetitive
strain injuries (RSIs) and musculoskeletal disorders (MSDs) like carpal tunnel
syndrome, tendonitis, nerve damage and back pain. There seems to be a five-year
demand cycle for ergonomic products. Suppliers are uncertain if this trend is
the result of fashion, the time to cause repetitive stress injuries, or the time
to bring on a new generation of workers who have never before used ergonomic
products. Products include input devices such as mice, trackballs, monitor
accessories, keyboards, wrist rests, and lighting products. Regardless, new
products to help reduce these work-related injuries are constantly in the works
and as a supplier of these products, office equipment dealers will have
increased relations with customers.
The rapid growth in demand for storage products is driven by
CD-R and CD-RW, and by the fact that more valuable data is on CDs than on
floppies. Storage products include transports, protectors, and storage devices
for CDs, DVDs, 3.5-inch diskettes, CD binder sheets, jewel cases, and CD wallets
and albums. Innovations include zip-off pouches and sections, media player
pouches with detachable shoulder straps and waist belt loops, headphone clips,
detachable cell phone pouches, side pockets, zippered accessories pockets, key
clips, haul loops, padded backs, combination media storage and drink coolers.
With the sudden surge in interest in recordable media, comes
the related interest in creating labels for musical, video, photographic, and
data treasures. Media labels are the fastest growing segment in the computer
accessories industry. In addition, the market for cleaning kits, cleaning
accessories, and maintenance kits for peripherals and media segments is
surprisingly large and continues to amaze industry insiders with its relatively
rapid growth rate.
Market trends There are a number of trends impacting computer
accessories. The single most significant trend affecting the computer
accessories market in 2002 was the rapid growth of digital media. DVDs, CD-Rs
and CD-RWs are being created, copied, and coveted. These prized collections of
audio, video, and data are in need of protection, storage, and mobility
The spread of digital technology to product categories such
as photography is expanding the breadth of the definition of the computer
accessories industry. Digital cameras result in demand for digital storage
media, printable media, and more.
Companies are finding it increasingly important to be able to
express themselves through products that are more stylistically individualized.
Company expression and customization, image and presentation are just as
important with many computer accessory products as functionality.
In many areas of the computer accessories industry, product
segments are serving to help companies become more organized, given that
employees are being asked to take up less space at work - or to work from home.
Hoteling, the term often applied to the professional service firm practice of
offering shared workspaces for employees who travel frequently, is not a new
trend. However, the impact on purchasing of desktop computer accessories is
finally being felt. While there is clearly a reduced need for workstations and
related accessories, the trend creates an enhanced requirement for desktops,
PDAs and media storage devices.
Throughout the US office supply industries mundane
consumables, accessories, and equipment have become branded, differentiated, and
even design-conscious. Equipment dealers can gain access to this important
market by identifying hidden opportunities, developing a marketing plan to
introduce products to customers and making new products conveniently available
to customers at competitive prices. In return for their efforts, dealers can
realize profitable opportunities and increased relationships with customers.
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Lisle is Managing Partner of Acclaro Growth Partners, a strategy consulting firm
for middle-market growth companies, their sources of capital, and the third
parties who work with them. Its specialty is time-sensitive, cost-effective
research and analysis for strategic planning and corporate development
initiatives. Lisle can be reached at 703.669.1500 or www.acclaropartners.com.