By Lisa Johnston
New products on display at the American International Toy Fair, held in N
SEATTLE — Benjamin Hartman, Amazon. com’s CE VP, came to head the company’s consumer electronics business via a rather atypical route.
Before joining the e-tailer 10 years ago he was an investment banker and financial analyst tracking technology companies, and once at Amazon his first merchandising assignments were within its softlines and sports and outdoors categories.
In 2010 he joined the CE team under then VP Paul Ryder, and last year took the helm of the rapidly expanding business. Indeed, sales grew nearly 52 percent in 2011 to some $12 billion according to TWICE’s Top 100 CE Retailers Report, rocketing Amazon to the No. 3 spot ahead of RadioShack, Costco, Target and Apple, and behind only Best Buy and Walmart.
Following a solid holiday season, Hartman remains bullish on CE in general, and tablets, distributed audio and new TV display technologies in particular, as he told TWICE in a recent Q&A.
TWICE: Were there any surprises during the holiday selling season in terms of shopping behavior or sales or product trends?
Benjamin Hartman, Amazon.com: In terms of shopping behaviors, we continued to see steady growth and customer interest in CE products, particularly with the latest technology products.
We saw several unexpected trends: We were surprised by the stronger-than-expected demand for home audio solutions, ranging from speakers and receivers to wireless and mobile audio solutions, such as the Sonos Play:3, Play:5 and Bose SoundLink Bluetooth mobile speaker. Customers are embracing these new technologies to enjoy their digital music with friends and family throughout the home or onthe- go.
Although somewhat expected, customers sought out Internet-enabled TVs and streaming devices. Our customers want to enjoy streaming their favorite movies and TV shows from the Amazon Instant Video library directly on their TVs. We’ve continued to add more devices that allow customers to do just that — including PlayStation3, Xbox 360 and Samsung smart TVs — which has increased demand for more streaming-capable devices.
Our Prime members are also streaming more content on their TVs just as they have been doing on their Kindle Fire via Prime Instant Video. Prime Instant Video gives them a subset of movies and TV episodes found in the Amazon Instant Video library for unlimited streaming, at no additional cost.
Within portable computing, the popularity of Ultrabooks and laptops exceeded our expectations. Our customers love the stylish form factor, the instant-on functionality of the Ultrabooks, and their overall excellent performance.
Even while GPS personal navigation devices experienced a decline across the industry, specialty GPS units for athletes and outdoor activities saw strong growth on Amazon.com. Customers increased gifting of specialty GPS devices like the Garmin Forerunner 410.
Customers also adjusted the way they shopped this holiday. First, many customers migrated towards shopping on mobile devices, a trend we expect to continue. Additionally, we saw increasingly high customer interest in CE products during the entire Black Friday week — not just on Black Friday — as well as Cyber Monday.
TWICE: Kindle Fire HD aside, what was the most innovative, game-changing or disruptive CE product of 2012?
Hartman: If you take Kindle Fire HD out of the equation, there were a handful of other innovative advancements in 2012. It’s too hard to name just one, so I’ll highlight a few by category.
Several of the biggest innovations included the continued evolution of premium headphones, led by Beats, as not just functional CE accessories but increasingly iconic fashion accessories, and the expansion of wireless home audio solutions, like Sonos Play:3 and Play:5.
Wireless audio solutions allow our customers to enjoy music in any room without having to re-wire their homes. Our customers love the simplicity of these devices, many of which integrate with Amazon’s Cloud Player. In my home, I have fully integrated Cloud Player with my Sonos system … and I can’t imagine listening to music any other way. I purchase Amazon MP3s on my phone or Kindle Fire and they are automatically saved to Cloud Player. When I get home I can stream the music instantly and wirelessly on my Sonos system, and control it all from the Sonos app right on my Kindle Fire.
Innovation in the portable computing space has also continued to drive personal productivity, mobility and change the way customers consume content. The Kindle Fire HD has been a success in the tablet space and an Amazon topseller during the holiday.
In addition, Samsung’s Google Chromebook, priced at $249, makes everyday computing and web access incredibly affordable, while Ultrabooks combine stylish design with great performance.
Within cameras, we saw compact system cameras emerge as a more mainstream alternative in 2012. Customers are responding to the combination of pro capabilities within a compact body.
In phones, the Samsung Galaxy S III proved to be a great handset across all carriers.
TWICE: Will tablets and smartphones continue to be the reigning CE devices this year?
Hartman: There are so many great tablets across a wide range of price points, including the newly released Kindle Fire HD at just $199. We expect tablets to continue to be one of the most popular CE devices in 2013. We will offer many new options for our customers, ranging from stand-alone 7-inch tablet devices to larger tablets that have computing power similar to laptops. We also expect to add to our selection of several new hybrid products that can function as tablets or laptops this year.
Smartphone penetration is still relatively low, so we expect to see continued demand for the latest devices as manufacturers offer innovative features and greater access to digital content. Customers have also become more reliant and attached to their smartphones, and we expect customers will want to continue upgrading to the latest technologies.
TWICE: What are your expectations for Windows 8 migration this year? What is your outlook for laptop PCs in general?
Hartman: This year we expect to see more people adopt Windows 8 either through the purchase of a new product or through an upgrade of their current operating system. In the next few months more manufacturers are launching touch-enabled products that are optimized for Windows 8. As these new devices are introduced, we expect customer adoption to increase. Manufacturers have used this opportunity to innovate further, by pushing the envelope on new product release innovation with detachable/convertible laptops that can act as tablets and computers.
TWICE: What overarching product and technology trends do you expect to emerge at International CES?
Hartman: It’s going to be an exciting year for consumer electronics. CES is like our Super Bowl. We are expecting to see several key developments. For example, for home entertainment, we expect a continued focus on connected/smart TVs, including models with integrated cameras and improved interfaces. I am excited to see content come-to-life on OLED/Ultra HD TVs.
Within the home-theater category, we expect further expansion of the connected home, with new solutions for wireless audio capability. This could include AirPlay speakers that allow your iOS devices to stream your music without requiring a Wi-Fi network. We will also see greater adoption of portable Bluetooth speakers with new form factors. Streaming services for music and movies such as Pandora, Spotify and Amazon Cloud Player, and Netflix and Amazon Instant Video, respectively, will continue to become more readily available on many devices.
In computing, the diversification in the types of touchscreen devices and tablets will continue to be of growing importance. We will see a wide range of convertible form-factor devices that swivel, pivot, detach or push flat. Separately, AC routers and network-attached storage will make it easier for customers to stream, share and store content. For cameras, we expect faster autofocus this year across all camera types. We expect to see wireless and sharing innovations, particularly in the SLR and compact-system segments, and the introduction of more camera apps will allow customers to render photos right on their device.
Lastly, the “action” video camera segment will continue to expand.
TWICE: Do you have high hopes for Ultra HD TV? Are there any other new products or technologies that you are especially enthusiastic about?
Both OLED and Ultra HD TVs are innovations that early adopters will purchase in 2013… and the rest of us will be jealous. We’ve already seen customers searching for these new technologies on Amazon.com. While we don’t yet know for sure, we expect that consumers will be able to enjoy an obvious richer viewing experience using existing content. Frankly, the OLED and Ultra HD TVs are just really cool.
Experience: Benjamin Hartman heads Amazon.com’s consumer electronics business as CE VP. He joined the company in 2002, holding various managerial functions within the softlines and sports and outdoors businesses.
He moved to CE in 2010, where he focused on growing the category by improving the high-quality assortment, the shopping experience and customer value, and last year was promoted to VP.
Prior to joining Amazon Hartman was an investment banker and financial analyst specializing in technology companies.
Education: Hartman holds a Bachelor of Science from the University of Washington and a Master of Business Administration from Harvard Business School.
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.