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Black Friday and the Recession: Why IT Solution Providers Care

After the turkey has been consumed and the football games have been played, retailers open their doors for the biggest day of their year – Black Friday. And e-tailers get ready for their biggest day, Cyber Monday. Why should IT solution providers care? Because consumer spending is two-thirds of the economy and it influences other […]

Written By

Jessica Davis

Nov 26, 2008

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After the turkey has been consumed and the football games have been
played, retailers open their doors for the biggest day of their year –
Black Friday. And e-tailers get ready for their biggest day, Cyber
Monday.

Why should IT solution providers care? Because consumer spending is
two-thirds of the economy and it influences other types of spending,
including IT spending.

Yet just two days before Black Friday the U.S. Commerce Department
reported that in October consumer spending dropped at the steepest rate
in more than seven years, down 1 percent. The drop is the biggest since
right after the terrorist attacks on Sept. 11, 2001. The Commerce
Department report comes on the heels of a series of negative economic
events and reports that have some pundits talking as if we are on the
verge of another Great Depression.

So this year, consumer spending on Black Friday and Cyber Monday will
be even more closely scrutinized than it has been in years past as
everybody from economists and analysts to the biggest technology
companies look for clues as to where the economy is headed.

And those observers include IT solution providers and others in the IT technology channel.

"What will be key is what happens on Black Friday and Cyber Monday,"
says Ken Lamneck, Tech Data president of the Americas. Lamneck believes
that everyone has been reigning in spending, but that consumer spending
on these key dates will be indicators of what will happen in the months
ahead.

"There’s no question that Monday, Dec. 1 is going to be an interesting
day," says Doug Ford, president of The I.T. Pros, an MSP in San Diego.
Regardless of the outcome, however, Ford says he has a plan to take
advantage of the downturn.

"We have identified two specific technology verticals as being more
recession resistant – storage and virtualization," Ford says. "Storage
never stops growing. Our customers need it and they need more of it.
Virtualization is just a good story – particularly in a down economy
when IT departments are being asked to do more with less."

Whatever happens on Black Friday and Cyber Monday, the results will
resolve some of the uncertainty that has hung over the industry since
the Wall Street crash began in October.

"Resellers are experiencing a lack of visibility," says Andy Bryant,
president of Arrow ECS. "There may be some squeeze coming, but it is
one of those things where we really can’t see out past December."

Black Friday and the Recession: Why IT Solution Providers Care

Jessica Davis

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