'Branding' Is Changing
By Steve Smith -- TWICE, 4/24/2006
My brother-in-law Dan came over the other day to announce that his 1990 or so vintage 35-inch big-screen TV died. While we lent him an old 20-inch we had in the basement to tide him over, he said he wanted to get an HDTV like ours to replace it. We have a 42-inch plasma from one of the major brands in consumer electronics.
While Dan would have loved a famous-brand set like ours, he said it wasn't in his current budget. As is his habit, he immediately visited some obscure Web sites and found a 32-inch HD-ready LCD from a company that even I knew little about for a price slightly under $1,000. When I tried to tell him that the set probably was no bargain, he said, “Come on, all those brands are pretty much alike.”
Well, so much for multimillion dollar marketing campaigns.
The point is that the notion of brands in consumer electronics, and brand loyalty, has changed dramatically in recent years, for consumers, retailers and the suppliers themselves.
Speaking with retailers in the past year or two, many have told me that while they appreciate what their existing suppliers have done for them, they might have to turn to new manufacturers from China, the IT market and others to take them to the next level of profitability and growth. Others were bolder, predicting some traditional CE brands may just go away.
Retailers understand that plenty of major brands are selling their products to just about everyone “to keep their factories operating,” as dealers put it. They understand it, but don't like it. Richard Glikes, executive director of the Home Theater Specialists of America isn't the first to say this, but he did tell our senior editor Alan Wolf at the group's recent meeting, “Our members' stores, their names, have to become brands.”
That doesn't mean a lot of buying groups and retailers will create their own branded HDTV lines, although some might. Many are pushing the notion that when the consumer thinks of quality CE products the first thing he or she shouldn't necessarily think of is the logo on the hardware they bought, but the logo outside of the store (or the logo on the retailer's Web site).
How do you pull off that coup? Glikes told his members to consider becoming complete, one-stop design centers that offer lighting design, licensed electricians, CAD capabilities and furniture. In other words, product selection of a retailer and the service of a custom installer, so that retailers can take the stress out of the usual CE transaction and sell an “experience,” as some call it, rather than selling a box of hardware laden with technology jargon.
And if retailers can pull that off, margins can be maintained and probably even increase. What all this may mean for manufacturers is a subject for another time.
As for Dan, he ended up buying a famous-name HDTV from a well-known retailer that not only delivered on time, but installed the unit successfully. At least for Dan, and the retailer who sold him the set, it was a happy ending.
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