Seagate’s external hard drive unit was separated from the internal business earlier this year in an attempt to bring more focus to both sides. We speak with Motaz Khalil, Retail Marketing Manager, Seagate, and Ayman Al-Ajouz, Sales Manager, MENA, Seagate Branded Solutions, to find out how the new push into the retail business has gone.
What’s Seagate’s approach to retail in the Middle East?
AAA: We have the go-to-market strategy, so we engage with all the retailers through campaigns and through marketing. We do have some rebate programmes for certain retailers just to enhance our sales with them, and to give them an incentive for doing business with Seagate. What we’re looking at is targeting the high-end product, which is an added value to the customers.
MK: Since the beginning of this year, Seagate has been taking retail seriously. Before it used to be internal and external storage as one. Now it’s split, and now we have a retail team focused on the direct consumer.
Are you retail partners happier about this new way of doing t
hings?
MK: They’re seeing more of the team now. We used to have a team that does everything, but now the team has focused on the retail side.
AAA: As retailers, they don’t usually do the core business. With the channel market, it was a little bit, “Okay, who should I talk to now?” but it’s been three or four quarters now and it’s well observed.
You mentioned you were going after the high end. What challenges have you faced with this?
AAA: One obstacle that we faced with high-end products is explaining it to the customer. When you’re going to buy a laptop, you know you need so many specs, you know that an i5 processor does this for you, and an i7 does that for you. But for a hard drive, people a hard drive is just something you plug into a USB port. But it’s not that anymore – it’s connected storage, it’s the experience, the software, the ease of use and accessibility. If you have a hard drive plugged into a USB, okay, it can serve you, but it cannot serve the rest of the guys in the office. You can buy the same capacity but with more options so that you can access it and others can access it.
Presumably you’re going for the high end because it offers better margins?
AAA: Yes, it provides better margins for retailers and better margins for us, but we want to deliver technology. We are a technology company and our bread and butter is hard drives. It’s not like hard drives make up one section of a huge portfolio. We want to show the customer the added value that they’re getting, and the experience of the technology. If you want to keep on pushing on the low end, that’s easy to sell. Everybody knows that, if you want a backup, you buy a hard drive.
MK: When you go into the technology, actually we have a better way to compete. When it comes to just the box, as Ayman is saying, you’ll find that it’s just about the hard drive.
Are customers starting to accept the higher-end technology?
AAA: You’d be amazed that usually, in the retail shops now, as I said, it’s a bit of a challenge selling the product. But in GITEX, we had a line called Seagate Central, which we call the personal cloud, and we experienced very, very good sales on this just because the customer was standing there, and there was a salesman telling him what the product does.
MK: This is a product that you have to connect to your router at home for even doing a demonstration. You can show them a video or something but it’s not as easy when you do it in retail stores.
