PCR reviews the budget software sector

Software on a shoestring

In the IT sector, there are very few product segments that can provide strong, reliable sales all year round. Many items of both software and hardware have their biggest sales following their launch, and can be expected to steadily depreciate in value from then on.

Budget software, meanwhile, is one of those rare ‘evergreen’ sellers, which can be bought and sold at prices that can tempt retailers and customers alike.

"Budget software, if done well, is always going to be a good seller, now more than ever," says Interactive Ideas’ marketing executive, Andrew Miles.

"It is a cheaper alternative than most free-time activities and can cover a wide range of areas such as fun children’s educational offerings, language learning, fitness training, skills improvement for the workplace and internet security. Some titles even prepare first time drivers for their driving test."

"PC budget software will provide evergreen titles and all-year-round sales," adds Avanquest’s marketing manager Debbie Hives. "It’s a steady, regular seller, as opposed to full price software, which is very ‘day one’ driven. Having both budget and full price software gives retailers the best of both worlds."

Budget software enjoys continued popularity, not only because of its low price–cost threshold, but because it is often backwards compatible, capable of being run on older or lower spec systems. Budget titles are also perceived as being good value and can make a great add-on or impulse sale.

"Retailers love budget software as it encourages impulse purchases," says Hives. "Shoppers may not go into stores specifically looking for the titles, but when they see them, will decide on impulse to buy and therefore spend more than they planned. This is something, of course, that all retailers love."

These same retailers also love the low price point that budget software offers. It can be stocked for a fraction of the cost of brand new software and gives a good sales margin, even when sold at low prices.

"Avanquest’s budget label – GSP – has been around since 1994 and has sold millions of units," confirms Hives. "Many of the titles are regularly in the top ten of each category within ChartTrack and we have numerous titles that have sold in excess of 100,000 units. Margins are generally much greater on budget than on full price titles and this, coupled with the volume, ensures a healthy return for retailers."

It is small wonder then that budget software often enjoys a prominent position on any IT shop floor. With a minimum expense, retailers can ensure continued sales and additional margin with a product that will always be perceived as a good deal.

"Savvy retailers are investing time and effort in getting their budget offering right," adds Hives. "In credit crunching times, it pays to have stock that appeals to buyers on the basis of great value for money."

"Budget software is a fantastic opportunity for anyone looking to get into the industry, where these can be seen as better value alternatives or addons to traditional types of software," concurs Miles.

"Budget software is still big business and sells in mass overall. It’s still making margins for retailers and resellers and should definitely be seen as a worthwhile investment for the foreseeable future."

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