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Retail is changing. As hardware margins get slimmer, retailers are actively seeking new profit centers. Total solutions, services, installation and after-sale support, cross-aisle shopping, brand development and customer segmentation are just a few of the strategies. At the core of all these strategies are two things: understanding customers' individual wants and needs and masterfully executing an "add-on" driven sales process.
In the beginning add-ons meant bundling and typically price-driven co-marketing efforts between manufacturers. Today, it's much more complex and value-driven with the addition of margin-rich accessories, services and after-sale support. While this sounds great for the retailer with even more revenue and profit opportunity, for the consumer, buying a simple television, computer or camera has never been so overwhelming.
Consider the total solution of today:
Complementary product bundling + extended warranties + cables and accessories + services + home installation + after-sales technical support = complete experience
These solutions aren't just challenging for consumers, but for the players involved. It used to be about one point of influence — sales associates. And if sales associates understood how to sell accessories, we'd see double-digit growth. Today, add-on opportunities occur at multiple points during and after the sales process. Service providers, installers and technical support representatives are now all engaged with guiding the customer to their ultimate entertainment experience.
Two questions come to mind:
How can accessory manufacturers stay top-of-mind and consistently represented throughout this new sales experience?
How do we keep it simple for everyone?
Communicate to and educate at all points of influence:
Seek out opportunities to deliver training and education to hardware manufacturers, installers, technical support teams and service providers — an online training program with incentives may be the simplest way to get involved.
Provide collateral and tools as reference points and reminders.
Offer accessories through service providers and installation groups.
Integrate with retailer strategic initiatives. Retailers are actively developing and building their own brand identities and properties. As a manufacturer, you have the opportunity to align and leverage these strategic initiatives:
Service groups and install: Best Buy's Geek Squad and Circuit City's Fire Dogs.
Environmental: Wal-Mart's sustainability and stated consumer electronics focus.
Multichannel integration: Circuit City's 24/24 program.
Customer segmentation: Best Buy's centricity and business efforts, Staples' Teacher Rewards, Lowe's for Pros.
Cross-promote with complementary services and offerings:
Samsung has partnered with cable companies and content providers to create complete HD solutions.
Leverage the store as media and an education opportunity:
Use signage, collateral and in-store media to guide consumers through the purchase process.
Kohl's calls it "lifestyle merchandising" and seeks opportunities to display products how people use them vs. sterile on-shelf displays.
Use demo days and assisted selling to communicate your message directly to consumers.
Keep messaging consistent:
Ensure your product and brand gets recommended at all points of the sales experience. As an industry, this gets more complicated as competing standards and formats drive influencers to make subjective recommendations.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.