The following is an extended version of an interview appearing in the June 1 print edition of TWICE.
David VanderWaal was promoted earlier this year to marketing VP at LG Electronics USA, responsible for overseeing all advertising, consumer research, sponsorships, promotion, shopper insights and digital marketing initiatives for LG’s home entertainment and home appliance business units in the U.S. Shortly thereafter, VanderWaal sat down with TWICE editors to share his vision for the brand.
TWICE: Where do you see LG’s place in the market?
Well, LG is still young here. It’s actually a pretty young company overall, founded in 1947, but LG as a leading brand is only 10 years old. You look at that and you understand how the company is evolving each and every year. What there is is this fantastic product. When you look at the innovation that this company has brought into this market, it’s impressive. Everything from the first 3D television, the first steam washer, the first door-in-door refrigerator and now this new OLED product that is going be, no question, the future of television. LG just keeps bringing it year after year.
TWICE: What do you attribute that to on a corporate level?
I think it’s definitely the R&D investment. This is a staggering figure: We employ over 20,000 engineers. I’ve had the privilege of visiting the R&D facility in South Korea and it is so impressive. The amount of long-term design planning, consumer research that goes into these products is unparalleled. That’s what really what drives it.
And the power of LG is also in its manufacturing capability. I’m still staggered by the amount of companies LG owns. Over 105 companies, $56 billion in worldwide revenue.
And our brand itself is also a different kind of brand. We have been able to grab a share of the American consumers’ mind space. We’re appealing to younger consumers, we’re getting more affluent consumers. That’s surely at the top of the list for your readership. “How do I get draw? How do I get more people in my stores?” And not Grandma and Grandpa but the people in their 20s and 30s. LG is the brand that does that. It’s a real advantage for us, not to say there aren’t a few other brands that have somewhat the same distinction, but I think the way we are marketing is also a little different. We’re being very focused, very efficient from a brand perspective.
Also, we’re marketing in a different way, even in the way we are dealing with our retailers. With them we want to be the brand of choice, we want to be the brand they can make money on. Unfortunately in this industry — and now even appliances are going down this pathway — it’s hard for anyone to make any money on consumer electronics, so we need to offer up technology that consumers will pay for, with which you can generate margins. Through MAP control, our UPP policy ... We’re trying to lead the industry in a direction that will help it survive.
Another angle we have is that a lot of consumers are seeking out energy-efficient products, and energy efficient appliances, even televisions. And that's something we're really taking a leadership postion in. We've been an Energy Star partner of the year four years running. More than 200 of our products are Energy Star certified. And that's a pretty easyt thing for a consumer to understand. The Energy Star program has done a good job explaining to consumers why it's important. So energy efficiency is almost a foundation for all the products LG brings to market now.
TWICE: So when you’re facing the consumer, what is LG’s brand personality? If you had to sum it up briefly, what is the image LG wants to present?
The brand image is, and will continue to be, “Life’s Good.” That just has so much resonance, with everyone. Our promise now is innovation for a better life. A better life can mean a lot of different things to different people, but we’re saying innovation will always lead to an easier life in some way. That’s the takeaway: Have a better life because of the products we bring. Life’s good.
TWICE: Are you concerned about CE retail? Do you fear more consolidation?
When you look at the retail landscape, especially on the appliance side, there is unprecedented choppiness. You look at the emergence of the online channel ... somebody’s going to figure out the model of how to do appliances online. Eventually, you have to believe, you know, Amazon has their eye on it. So there are going to be a lot of distribution changes.
LG has taken the strategy that we want to put our product, whether its appliances, televisions, in the reach of every consumer in the country. Some consumers want to buy online, some want to go into a store, some do a little of both.
There are certain things a retailers needs to do to do business with LG, and that’s keep the integrity of the pricing, representing our brand in the way that we want it represented. But for the most part, whenever the landscape changes we’re positioned well. We have strong relationships with a lot of regionals. We’re working hard at Best Buy to make sure we can be, in the end, their brand to make money on. We know they need to make money on the products they sell, not the space they are selling. That’s a short-term play.
If we position ourselves as a brand that people will pay value for, with OLED, and the technologies we’re bringing in, Best Buy will be a winning partner for us.
We have a lot at stake in Best Buy doing well, hhgregg doing well. Competition’s good. Not only for the manufacturers but also for retailers.
TWICE: So how do you keep appliances from following the same track that electronics, TVs did online? Appliances have been the last bastion of margin for most.
Well, that’s why so many retailers are entering the category now. And bedding. And furniture. Because many are not making anything on televisions now.
TWICE: But it looks like, despite the lessons of the past, the appliance industry is following that same downward spiral ...
Consumers will reward you if you bring the innovation. Like the door-in door. Like the twin washer we showed at CES, two washers in the space of one. We’re going to go in and price that accordingly and we know consumers will reward us. But, we have to remind the retailers to keep the price integrity in mind too, just to make sure, those who are hurting us all can’t get access to our products.
TWICE: How do you handle the different channels from a marketing standpoint? Do you have different marketing messages to Best Buy customers, to Walmart customers? How do you manage that process?
We have to realize that different retailers have different sweet spots. So, if its an AJ Madison, which is primarily an online retailer, we have to get the very best online assets to AJ Madison. If it’s an hhgregg, and they need more draw, they have to get people in their stores, we can give them assets like our 4K wall there. We invested with them to present what is really a complete 4K story right there on the wall. We’re tailoring to whatever the sweet spot is for the retailer, but the marketing message, at its essence, remains consistent.
It’s tough, though. I think the more times you have go through different communication touch points, the message can get muddied. For example, not only is OLED important for us but it’s important to the industry, because it really does represent a discernible picture quality improvement. If you put an OLED next to any other television, a consumer with no technology background at all can see the difference in how well the picture looks. We weren’t getting enough credit for that so for the retailers we created the PQ Challenge — a picture quality challenge. And it gives us the opportunity to show how black level on an OLED is what is really creating a superior picture. And that’s the type of thing that’s really designed for a retailer with an assisted sales floor.
The biggest thing is knowing your audience. LG wants to be that different brand for retailers. And when I say that I mean we think we can offer a lot more in terms of research, understanding path to purchase, this exclusive methodology where we actually track shoppers in a week of activity on both home appliances and home entertainment products. It gives us the opportunity to give retailers very important insight. That is something that we and the retailers can work together on, a very retail-centric marketing strategy. Offering something that maybe our competitors aren't. That's where we want to go.
TWICE: How do you think the industry is doing promoting 4K Ultra HD?
Both the manufacturers and the retailers have to make it simpler. Demonstrable quality is the key. But it’s a challenge. Do we really have 4K content being displayed on these sets? No. Can a consumer understand the difference between up-scaled content and native content when they haven’t seen native? For the most part, no. That’s where our 4K wall comes in. For the retailers who are willing, we want to be that source of demonstrable quality.
Our big challenge on OLED right now is where people are at on picture quality: it's color, which OLED wins on; contrast, which OLED wins on; resolution, which the 4K OLED wins on, but the 4K OLED is just coming to market; and of course size. With our 2K TVs the key size is 55 inches. For a lot of Americans today though, 55 inches is just not considered a big screen. So the new 4K OLED we'll have in 65 inches, which is the new sweet spot.
According to fresh CEA data the average screen size these days is 42 inches, that's the average. For years and years it was 25-inch, 27-inch. It has moved quickly.
TWICE: On your consumer-facing efforts, what percentage of your advertising is digital now?
We've been doubling down every year. I won't give you an exact percentage but when we look at our competitors' efforts and compare, we are at the top of the list.
TWICE: What's new on the smart appliance side?
We have made advances with our SmartThink line of appliances, made them even easier to use. We’ve talked a lot about the IoT and what it brings, an infrastructure that’s going to tie all these things together. Things like Nest and Iris and some of the other products on the market are starting to mature now, but at this point, it’s still kind of a niche thing in the appliance world.
Now in the television world, everyone wants a smart TV but most people aren’t really using all the capabilities of their smart TV, other than streaming movies. So the WebOS that we put on our smart TVs makes it way easier now to do all the things a smart TV can do because it acts just like what you’re used to on a laptop. You have all your apps on an easy to follow menu bar. You don’t have to search for something using a keyboard. You know ... “How do I even get to Google?” It’s all right there.
One of the most downloaded apps out there is GoPro’s app and through a partnership we have with GoPro, we have the only smart TV on the market that has the app preloaded on our WebOS. Soon we’ll have Sling on our menu bar. To expect a user to go to the Internet, search for apps they want and download them and decide where they are going to sit on their screen is just unrealistic for most consumers. All this WebOS platform does is make it a lot easier to use.
TWICE:Last question: What consumer product companies outside our industry do you admire from a marketing standpoint? Who does a good job?
Well, my first thought -- and they're not completely outside the realm of the consumer electronics industry -- is GoPro. They really are the new age marketer. They figured out how to get people to pull their content instead having to push it through. They became a publisher as much as a manufacturer. They have done a phenomenal job at crafting what they're all about. They were very smart in how they went to market. I mean, the breadth of product is very small, but yet their impact is huge.
Another brand is Tide. Over time they've done a really good job of staying true to what they are. They're so trusted. One of the most trusted brands in America. They do a great job of bringing to market new products but staying true to their essence.