Context to start tracking average selling prices in the channel

Market watcher Context has cut the ribbon on a service that should give the channel a clearer understanding of what is fair pricing in the market.

Tracking average selling prices (ASPs) in the channel is often a challenge because of promotions, bundles and offers being run in various markets, timed events and vertical promotions.

To help get a clearer sense of what is a fair ASP for a product, Context is introducing an IT Price Trend Index to track prices and give distributors and resellers an idea of where things are going.

“This is a new way of looking at things, designed to support the supplier-to-enterprise customer relationship. While traditional ASPs can vary from week-to-week, according to the impact of special deals, our index aims to provide a more neutral view of price evolution safeguarded from extreme price spikes,” said Mathias Knoefel, corporate benchmarking manager at Context.

“It offers a common basis on which to reduce time spent on pricing discussions, and to make those discussions fairer and more transparent,” he added.

Context is kicking things off with server RAM as the first category listed on the index, for which Context will provide a four-week rolling average to a value of 100, which represents the average of 2019, that will show the direction prices are heading in.

That analysis shows that across Europe’s five largest markets prices declined in mid-2019, picking up again early last year before a sharp decline triggered by the pandemic.

Prices have recovered since the start of 2021, with the UK, France and Spain climbing above their respective 2019 averages in recent weeks.

Context plans to add more categories to the index in the near future to provide more price benchmarking for the channel.

The analyst house is building on some of the lessons it has learnt during the pandemic about the benefits of drilling down into the data it gathers from European distributors and sharing the insights through regular communication with the channel.

Over the course of the pandemic, Context established a weekly tracker where it charted sales through distribution in European countries, demand for key product segments, including PCs and security, and shared guidance.

The service was able to identify the recoveries in key markets following the end of lockdown periods and the impact that the shift to remote working had on associated products, including monitors, headsets and laptops.

Its most recent findings, from mid-June, indicated that volume sales for mobile PCs across Europe declined in May, but the numbers were still higher than 2019. Demand is expected to stay strong in the second half of the year.

“The long-term shift to mobility that the pandemic super-charged is still ongoing. Although there may be a slowdown in consumer demand in the second half of the year as people spend more time away from home and prices rise, the long-term picture is pretty healthy,” said Marie-Christine Pygott, senior analyst at Context. 

“Hybrid working plans and continued demand from the education sector will boost sales in the commercial space, so we’ll see overall growth in the second half of 2021, despite a high 2020 baseline and ongoing supply issues,” she added.