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NEW YORK — The use of interactive product simulations to sell or provide instruction in the use of CE devices received a ringing endorsement earlier this month when Panasonic Consumer Electronics signed a 30-product deal with software developer e-SIM.
Under terms of the agreement, e-SIM's LiveProducts division, based here, will develop virtual product demonstrations and user manuals that Panasonic plans to place on its Web site (www.panasonic.com) to drive marketing, increase sales and provide more efficient and effective customer service and sales training, the manufacturer said.
Panasonic is presently determining which 30 CE products to reproduce online, although the final selection is expected to span all categories. After the products are chosen, e-SIM requires about eight weeks to create the "LiveManuals" demos, which places the expected launch date in August or September.
As part of the pact, the Panasonic simulations — which are synchronized audio-video presentations featuring virtual CE products that look and function like their physical counterparts and can be turned and manipulated on screen — will also appear on e-SIM's customer support site (www.livemanuals.com). In addition, Panasonic will receive promotional exposure on the home page of livemanuals.com.
In turn, the LiveManuals demos will be featured as part of a launch promotion on the home page of panasonic.com, and Panasonic may market the LiveManuals branding on certain product packaging, promotional materials and/or point-of-purchase displays.
Explained Gene Kelsey, VP/general manager of Panasonic's brand strategy group, "LiveManuals is a powerful innovation that will help expand our competitive advantage as well as strengthen our leadership position in the competitive consumer electronics space. We felt that our current and future customers would benefit significantly from a comprehensive try-before-you-buy experience, as well as a thorough tool for product education and troubleshooting after purchase."
According to LiveProducts president/CEO Bill Sims, the virtual demos will help consumers get the most out of their products by allowing them to perform online test drives prior to purchase, and to receive detailed, interactive operating instructions after they take them home.
Vendors, he stressed, benefit directly through reduced service calls and fewer returns. "Manufacturers spend an average of $8 per call at their call centers, and most of the calls come from consumers who simply don't understand how to use the product," he noted. "As part of our business plan, we show manufacturers how LiveManuals can save them substantial amounts of money."
Case in point: Zenith. After directing consumers to LiveManuals demos of its universal remotes on its Web site, customer service calls fell nearly 90 percent and the company was able to change its toll-free call center number to a 900 number, while hits to its consumer site rose.
Sims, a 22-year CE industry veteran who headed Zenith Sales Company as president and served as VP of JVC's consumer video division, also sees savings for manufacturers in reduced return rates. "Returns are a multi-billion-dollar problem," he observed, "and according to the Consumer Electronics Association, 67 percent of returns are from consumers who incorrectly think the product is broken when the only problem is they don't know how to operate it. We think the use of LiveManuals can cut returns dramatically, which can save manufacturers millions."
In addition, manufacturers can employ the product to train its field sales staff; provide instruction to retail sales associates; test concept products cost effectively via virtual focus groups; or, packaged as a CD, to replace paper brochures on sales calls. Sims recalls that Maytag even staged a virtual launch of its breakthrough Neptune washer using a LiveManuals simulation, and began receiving orders before an actual model was debuted.
The demonstrations themselves can run as long as 15-minutes, with up to 90 seconds devoted to each segment or product feature. The 400K packages require no download time, now that LiveProducts has upgraded the software to a plug-in-less format, and manufacturers can either host the demos themselves or let e-SIM serve them into their Web sites seamlessly.
The Panasonic deal brings LiveProduct's client roster up to 21 companies — for which it has so far produced some 100 simulations — and follows a flurry of agreements earlier this month with Nikon and Samsung. For the former, LiveProducts will produce simulations and manuals for Nikon digital and SLR cameras, while Samsung will employ the virtual demos for a forthcoming line of wireless phones. By mounting a virtual launch, said Samsung's Peter Skarzynski, senior VP/sales and marketing, Wireless Terminals division, "We are able to greatly enhance our marketing efforts, leading to quick market penetration, a better-educated sales team and fewer returns and calls to our centers."
Added Nikon's VP/Internet development Jerry Grossman, "We're using product simulations to improve our ongoing customer relationships by providing a unique way to educate our audience about the newest and latest innovations."
Contracts were also recently signed with Sony to create a Web-enabled, electronic version of its accessories catalog; with Seiko to develop LiveManuals for 16 products including SmartPads portfolios and electronic dictionaries; and with Maytag to compliment its Neptune washer demo with one for its Neptune dryer.
Other appliance clients include Amana and GE, while the CE roster also counts Cobra, Ericsson, Hitachi and Kenwood.
Looking ahead, Sims hopes to branch out into the aerospace, automotive, marine and medical equipment markets, where he believes there would be an affinity for virtual demos, while LiveProducts will explore e-commerce and CE portal opportunities for its livemanuals.com Web site, which is backed by AOL and receives 50,000 unique visitors per month.
"The idea is to make it a destination site," he said, "and we think we've created the ultimate site for e-tailing." Indeed, besides housing his clients' product simulations, livemanuals.com maintains links to virtually every CE manufacturer's site for product information; provides extended warranties contracts and repair services through GE and Service Magic; allows consumers to store model numbers and warranty information online; and comparison shop via the DealTime shopping bot service.
Concluded Sims, "We've positioned ourselves as the standard for how to present products."
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.