Times are tough for the nation’s two-way radio distributors. The market has never been more competitive and distributors have to work twice as hard for the same money. “The days of simply putting your feet up and waiting for orders to come in are over,” says one.
But it’s not all doom and gloom. Although Gary Redshaw, radio communications product manager at Nimans, says market conditions could be better, he reports buoyant demand.
“Awareness of two-way radios is very high, especially their versatility compared with mobile phones,” says Redshaw. “[They are] not reliant on 4G reception, which isn’t always guaranteed.”
Sam Ogles, sales and marketing executive at Syndico, is equally upbeat. “The strain on the businesses’ human resources is increasing with the number of inbound enquiries and orders generated by new products, and there is a subsequent need to continually develop integrated and co-ordinated sales and marketing strategies,” he says. “[But] it does make our jobs very rewarding and is evidence the market is a great place to be.”
The good news is there are opportunities out there for ambitious, growing businesses. For starters, the customer base for two-way radios is slowly expanding. “A lot of customers on our dealer side are telecoms installers and they are starting to get to grips with radio portfolios, especially how they work with existing telephony systems,” says Redshaw. “It’s about unification of the whole process. They can provide a total communication package and platform.”
Ogles adds the introduction of new technologies to the market is also enabling businesses’ customer base to broaden. “Security resellers are a significant new entrant now body-worn cameras have become a PMR product, and they are seeing how push-to-talk over cellular [PoC] can benefit mobile security teams who need flexible, wide-area communications without needing to carry infrastructure around with them,” he says. “We do, however, work with a very skilled network of PMR resellers who have the expertise to bring these newer products into their portfolios. Body-worn cameras and PoC are examples of commercial opportunities for our dealer channel as they can increase their revenue streams and add significant value to existing customers’ systems.”
Good service is good business
The ability to add value is one of the things potential customers are looking for from their distribution partner, but it is not the only thing. Their list of demands is ever-expanding, which makes it increasingly challenging for distributors to differentiate themselves. However, the more savvy distributors can still stand out. “It’s not just about price, but customer service. We offer full technical support and guaranteed next-day delivery from as late as 6.30pm ordering,” Redshaw says.
Customer service is also a major area of focus for RadioTrade, which has won a Motorola Solutions Empower Circle award for three years in a row [see this news story for more information – Ed]. Pete Bearryman, its sales and marketing director, says: “We support dealers with their wider needs including customer demonstrations, technical design and support with the Empower programme. We also work with our partners to help them open up new markets and opportunities.”
Customer service is also vital to Airsys. Leigh Hope, chief operations officer, says that in addition to offering “the right stock at the right price at the right time”, it effectively serves as a ‘buffer’ between resellers, which are relatively small businesses, and the multinational manufacturing groups. “We can deal with all the challenges [resellers] face with an evolving manufacturer that’s big and has its own demands and drivers like quarterly numbers. We can shield the reseller from that as much as possible.”
The quality of customer service offered continues to be a major area of focus for Syndico. Ogles says: “We always co-ordinate our marketing activity in line with our manufacturer partners so the communications received by our dealer channel will match up with the manufacturers’ brand-building messages broadcast to the wider audience. It is in everybody’s best interests to help dealers meet their customers’ expectations.”
E-commerce
One of the ways distributors are doing this is by bolstering their online offer. Bearryman says that one of the biggest recent investments his company has made is the re-development of it’s e-commerce platform, with a new website due to be launched soon." “With almost all of our products and the complete Motorola Solutions price book online, partners see RRP and buy pricing and so can calculate the cost of their orders and place them online simply and accurately,” he explains. “We are in the process of upgrading our website to improve the ordering process and add more functionality. We will also continue to develop our social media presence to cater to the growing number of partners who prefer to receive information in this way.”
It is a channel that is also important to Syndico, which Ogles says was the first UK distributor to go live with an e-commerce platform. “This was a major step forward for our business, and many dealers have benefited from the autonomy of ordering without having to create a purchase order or pick up the phone while using a dedicated system, allowing them to comply with internal procedures,” he explains.
Ogles adds that the personal relationships the company has with its dealers are still important, but online plays a big part in the day-to-day running of Syndico. “Aside from our e-commerce site, we use our online channels to keep a constant communication flow with our dealer channel and broadcast important operational and marketing communications,” he says. “Ultimately, we want to ensure that none of our dealers miss important messages; [making sure this doesn’t happen] is a constant process and is very important. As we have a finite number of customers, investing in ad-word traffic probably isn’t a profitable exercise; however, the majority of our partners use our website as a resource centre so we’re in the process of redeveloping our ‘dealer area’ for our partners to download all the sales, marketing and technical resources they need.”
While online plays a big part in the day-to-day operations of some distributors, to others it is not so integral. “We’ve got an e-commerce platform and although it’s important, that’s not necessarily from a final order placement point of view,” says Hope. “A lot of businesses use it to check what stock levels you’ve got, what your pricing is and what products you offer. A lot of our customers ring up and, while they might know a lot about the product, they always have a few questions about things like accessories, what works with what system, does it work with this radio, does it do this, does it do that? So, although e-commerce is part of the offering, I don’t think we are ever going to see 80-90 per cent of orders coming through e-commerce.”
PoC: getting the message out
The role e-commerce plays in the sector will no doubt continue to evolve over the coming years. Another thing that is expected to undergo a major evolution is adoption rates of PoC. In the future it has the potential to be a game-changer, believes Redshaw. “Interest is growing and we are currently testing options,” he says. “I’m sure in time it will become a huge part of the market because of the areas it covers. You are not restricted to range. There are virtually no limits.”
Ogles says it still has some way to go before it reaches its potential in the UK, but ultimately PoC has the capability to connect organisations everywhere.
“At the moment PMR users have a choice of established products for business-digital (DMR Tier I), business-critical (DMR Tier II) and mission-critical (DMR Tier III and TETRA) systems,” explains Ogles. “We see PoC as a wide-area alternative to DMR when it comes to business-critical communications, due to the lack of infrastructural investment required and ease of remotely managing the radio fleet. We believe that DMR Tier II will remain first choice for on-site business-critical communications; however, PoC has huge potential once users realise the wide-area connectivity benefits it can bring, as well as for users who cannot obtain a licence in a major city where the VHF and UHF frequency spectrums are extremely congested. As distributors, our responsibility is to help resellers understand the commercial value of PoC so that their customers can experience its benefits.”
This education piece needs to happen sooner rather than later because at the moment there is a mixed range of attitudes towards the technology among resellers, according to Hope. “You’ve got resellers who love new technology, who are really looking at this and going after it and seeing the potential,” says Hope. “And you’ve got other resellers saying ‘it’s never going to replace radio – radio is going to be here forever and a day’. And then you’ve got people in between.”
He concedes that take-up of PoC has been relatively slow to date, but he believes that as large companies such as Motorola Solutions become increasingly involved in this space, coupled with the eventual arrival of the Emergency Services Network (ESN) and large-scale projects currently taking place across Europe where the technology is being deployed by the military, this will all help to educate people about the benefits.
“The tipping point is still a couple of years away, but it’s coming,” says Hope. “If you are a business that doesn’t get involved in this now and then in a couple of years’ time you think ‘Oh, I need to get involved’, you’re going to be behind the curve.”
Redshaw agrees PoC will be one of the biggest trends over the next few years. As will demand for one-stop-shop communication solutions. “Combined telephone systems with radios and pagers will see a fork-lift truck driver being able to talk to a depot looking for a customer delivery as he is putting the stock on the van. It’s seamless communication all the way through,” he says.
As for other key trends in the two-way radio market, Hope anticipates that we could see a period of consolidation as resellers look to enjoy the benefits of scale, which allows them to be more competitive in an increasingly competitive marketplace.
“I do think you’re going to see the average business size get bigger, where you need to have the economy of scale to be able to buy at the right price and have the right level of technical nous to do what you need to do,” says Hope. “When you look around at the resellers there are a lot of owner-managed businesses that have been around for a long time, and I can see those businesses exiting or being bought up in the next few years.”
So, although things may be tough for two-way radio distributors at the moment, the good news is that it looks like there are exciting times ahead for the industry.
Don’t mention the B word
Distributors haven’t been immune from the uncertainty caused by Brexit, although to date the impact doesn’t appear to have been too severe.
“Some of our customers’ decision-making has been affected by the uncertainty, although our sales performance doesn’t suggest a significant impact,” says Ogles. “Many of our partners are business owners so are perhaps right to be cautious, especially those with a European customer base. Our UK distribution of PMR equipment should be unaffected.”
Hope has witnessed a slight slowdown in business. “There is a bit more caution out there,” he says. “I would rather it was just dealt with, so we know where we stand.”
Bearryman also reports a delay in the “buying cycle” for some major projects, which suggests Brexit could be making some end-customers’ procurement and finance people more cautious. “We are still seeing growth in our partners’ buying for hire, and this could also suggest that end-users are happier to be spending from their current rather than their capital budgets, which is usually a sign of uncertainty,” he says. “We have worked closely with our main suppliers to minimise the impact of Brexit and have improved our stock position to ensure continuity of supply.”
[For more on Brexit's implications for the two-way radio industry, see Philip Mason's article on the subject, which appeared in the same issue of Land Mobile – Ed]
