The ‘C’ word

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Now, your grandmother may not like it, but connected viewing and content are changing the way we watch entertainment, and changing the shape of traditional broadcasting as we know it.

We, as consumers, like to time-shift our TV viewing. No, not like the famous Quantum Leap, but watching what we want when it’s convenient for us to do so.

In May, 13.7 per cent of all TV was watched time-shifted via a catch-up service, up from 6.9 per cent in 2010. This percentage will most certainly continue to grow as more consumers make use of connected services.

With the increase of streaming options and greater bandwidth from our broadband providers, there are many options for consumers to watch their favourite shows that don’t involve a TV, not forgetting very smart services like Freeview Play and Sky Q.

We love streaming on the go and away from the traditional living room setting, with 32 per cent of total viewing time being done through streaming on a device other than a TV. That’s 11,221,204 hours a week in the UK.

We will stream anything it would seem, with four episodes of EastEnders topping a recent catch-up list. What we seem to avoid watching on catch-up and make an effort with is appointment TV, for example live sporting events, which meant sport did not break the top 50 of time-shifted programming. Rather, sports topped the live streaming list, with consumers looking to watch the match with everyone else rather than catch up later.

On top of live streaming and catch-up services, some smart TVs and streaming devices also give easy access to TV and film streaming services, such as Netflix and Amazon Prime. Quality productions such as Orange is the New Black, which costs nearly $4 million an episode to produce, and House of Cards, costing slightly more at $4.5m, have meant that paying to stream is an acceptable proposition. Netflix will spend $5 billion on programming in 2016 – this is on a par with traditional broadcasters such as Fox Networks, and higher than CBS.

Quality, and the ability to be more risqué, is paying off for the non-traditional content producers. They are new, credible and serious players, mixing up the way we consume drama, and now also factual TV.

With Netflix boasting 81 million subscribers in its quarterly earnings report, it’s easy to understand how connected content and the ability to view via multiple devices is again changing the face of broadcasting and how we consume TV. With the BBC license coming in at an exceptionally good value, £145.50 a year, it’s a lot of high-quality media on many platforms to even consider it expensive. But, with Netflix averaging £89.88 and Amazon Prime £79 a year, it’s got tough competition from all angles, Government included.

Grandma might be happy with her old terrestrial channels, but many consumers will be looking to access all this amazing content by upgrading to a new smart TV or other connected device. For your store, connected services are the perfect USP to sell these new products – smart TVs are rapidly becoming the base level for the category, much like HD is now. What’s important is reassuring consumers that these services will enhance their viewing experience, not hinder it with difficult-to-use software or hidden charges.

Have a smart TV set up in your store with a live aerial feed and internet connection ready for your staff to demo. Let interested shoppers interact and play with the TV, letting them explore the features and benefits of streaming and catch-up services, demonstrating their ease of use and accessibility to free terrestrial catch up or paid for content. With GfK estimating that over five million 4K TVs will be sold in the UK by the end of 2017, smart TV is complementing UHD in equal measure.

With demand services making up four per cent of TV viewing for all ages, and more than doubling to 8.7 per cent among the same 16 to 24 age group, it’s understandable that Amazon can afford to spend $4m per episode on The Grand Tour, and Netflix’s market capitalisation is now $42.3 billion.

If you aren’t offering streaming devices and content cards like Google Play, you aren’t giving your customers, of all ages, what they want and are potentially missing out on an opportunity to increase your margin.

 

Read more at: http://ertonline.co.uk/opinion/the-c-word/

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Smoothie operator

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With healthy eating at an all-time high, the market for juice extractors and other food prep gadgets has steadily been growing over the past few years.

A recent study by Mintel found that now 41 percent of Brits are cooking from scratch every day, with consumers looking to control their diets and improve their health.

Retailers need to cater to their audience, ranging a good selection of products within the category, with the ability to sell them effectively, as sales are only going to grow.

Now a mainstay of the health food appliance category, sales of low-fat fryers, for example, are continuing to increase, growing by 12 per cent year on year, where traditional deep fat fryers declined by one per cent.

While the fryer category as a whole has grown by eight per cent, two-thirds of this growth is down to healthier fryers alone. With a higher price point averaging at £101 compared with the average £25 for traditional fryers, low-fat fryers are not only a more popular product, but also more profitable for your store.

Likewise, sales of standalone grills have increased by 30 per cent since 2011. The category has seen a jump in popularity as a whole, with 15 per cent of Brits interested in purchasing a grill, compared with only 10 per cent in 2013. Traditional fruit juicers have seen a 35 per cent drop in sales volume since the beginning of 2016. On the other hand, juice extractors (such as the NutriBullet) have grown by 111 per cent and sold nearly one million extra units in the past 12 months.

Healthy

Extractors are taking the market away from juicers because of their health credentials. Whereas juicers only release the sugary juice (sometimes as much as a can of coke), extractors keep the vitamin-filled fruit fibre, creating a healthy smoothie. There are clear health benefits to all of these products, with low-fat fryers and grills cutting fat from everyday cooking, and extractors making smoothies to make it easier to hit that all important five-a-day. However, all of these products are considered purchases, with price points generally higher than their ‘unhealthy’ counterparts. While the health benefits of the products are clear, many consumers will need to be convinced that their new extractor or fryer is value for money.

As such, to make the most of the category, it’s important for your store to explain the financial benefits to shoppers.

A good example is juice extractors – the average price of a medium smoothie (450ml) from a high-street coffee chain is £3.25. Based on the ingredients of this smoothie, making the same thing at home by buying a watermelon, grapes and some strawberries would only cost around £1.35. Using a mid-range extractor, such as the Morphy Richards Easy Blend, it would take only 19 smoothies to recoup the cost of the product.

Based on making one smoothie a day, this would take less than three weeks.

This is a perfect opportunity to demonstrate the financial benefits of a juice extractor to shoppers, many of whom will already be buying smoothies every day from a local coffee shop. Knowing that they can recoup the cost of the product in as little as three weeks will be a huge factor in their decision to purchase, as the extractor will likely save them a significant amount over time.

For those shoppers who favour convenience over savings, a demonstration could change their attitude to the product. Show them how easy it is to make their smoothie every morning, while simultaneously offering them a sample made right in front of them.

Features

If you’ve decided to demonstrate a juice extractor product in your store, set aside a budget to buy fresh fruit each morning on busy days, especially each weekend. Ensure that your staff are trained to use the product, including food and hygiene training, and are briefed on its unique features.

Position the demo stand prominently, offering passers-by a fresh smoothie and the opportunity to discuss the product with a staff member.

The health SDA category is an excellent one to tap your store into consumer interest and market trends. It also offers a great opportunity to create some theatre in store, demonstrating these fantastic new products with colourful displays that will catch the eye of passing shoppers, as well as those already interested in making a purchase.

 

Read more at: http://ertonline.co.uk/opinion/smoothie-operator/

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Brexit and the Tech Channel

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On 23rd June 2016, 17.4 million people in the UK voted to leave the European Union, igniting the Brexit debate and speculation on what happens next. With this in mind, what are the potential implications for tech brands?

With the immediate weakening of the pound to US dollar exchange rate, it has and will continue to have an impact on components that comprise end products, at the detriment of all consumers. Brands including Dell, HP, Cisco and Lenovo have informed their channel partners to expect blanket price increases, including 10 per cent for Dell and HP, and a rumoured 14 per cent from Cisco.

Price increases will impact on what is an increasingly tough market, but to what extent? This is perhaps only the beginning. However, irrespective of the speculation, one thing for certain is that any price increases will certainly not be absorbed by resellers, and will instead be passed onto end users.

Since the Consumer Price Index recorded pre Brexit at -1 to a post Brexit drop of -9, it is clear that Brexit will make trading not only difficult in bricks and mortar retailers, but also a challenge for the entire channel.

The outlook for brands means that it will become harder to sell products at a price which consumers are accustomed to. The harsh reality of Brexit is that consumers will begin to feel the impact on the pound in their pockets.

Compared to other markets where it is likely tech products will be considerably less expensive in relative terms, Brexit will make the UK a challenging market to manage for brands. When John Lewis boss Andy Street states that although changes in Sterling won’t impact prices for this financial year, but that it may next year, it’s pretty much a certainty that it will happen. This is a move that many others retailers will follow in an acceptable, stealth-like manner.

It’s not just about the exchange rate affecting components either – as fuel costs increase, so does the cost of transportation, which in any event will impact pricing further. This could, in particular, affect retailers with an Omnichannel approach and online resellers which will look to recoup delivery charges. As such, the outlook for the channel and consumers is tough.

One thing is definite, the average price index for Tech and CE products will increase, creating a new challenge for sales and marketing teams. Maintaining market share, encouraging end users to refresh products in line with trends and not extending the product lifecycle delaying possible upgrades, will all be a priority.

With margins so tight and the fight for market share getting fierce, the focus on marketing teams to deliver clear strategies which explain these blanket increases and seek to assure end users that there will be no impact on build quality and more importantly innovation, is essential.

It’s inevitable that when you ask consumers to pay more money for your products, the balancing act is meeting the expectations of end users demanding value for money from these same products and ultimately your brand.

Effective use of existing marketing budgets at the point of purchase could be the tool that bridges the price gap to maintain consumer confidence, profitability and market share.

 

Read more at http://www.pcr-online.biz/news/read/the-brexit-vote-and-price-increases-will-make-the-uk-a-challenging-market-for-tech-brands/038513

It’s not too late to take on wearables

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When it comes to wearables, many retailers may lack the knowledge needed to make them a success in their stores. As a developing category that’s creating a lot of interest in the media and among shoppers, expanding the knowledge base of your staff will help to develop it as a mainstay category in your store.   

Firstly, educate your staff on how wearable devices can make a positive impact on a customer’s health and lifestyle. Whether you ask a supplier to assist you with extra training, or run a training session yourself, it’s important for your staff to understand the category. Encourage your staff to use a wearable device themselves, helping them to understand wearables and become brand advocates. Their knowledge will help to improve in-store education and awareness of the category. Make it part of team building by creating store challenges on the number of steps, etc.

With your staff knowledgeable and ready to assist, educate your customers on the same health and lifestyle benefits by giving them an opportunity to see the device in action through a demonstration, using the team dashboard to aid the process.

Arming staff with a device and a synched smartphone will allow them to demonstrate the product’s functionality. Each customer will have a different reason for inquiring about a wearable device, so have your staff training focus on communication skills so they can offer tailored advice to individual shoppers.

If you’re concerned that your customers will not be interested in purchasing a wearable product, having a staff member speak passionately about how a device can help improve a customer’s health and fitness may change their perception of the category. Don’t forget the compatibility factor and ease of use, as all devices sync with almost any make of smartphone.

It’s not too late to consider ranging wearable technology. The category is continuing to grow and won’t be fading anytime soon. Get over your fears, educate your staff and start with a range that offers choice for each user at a price and functionality level that meets their needs.

Read more at http://ertonline.co.uk/opinion/smart-move/

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Smart Move

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The connected home is now reality, not a fantasy. The global market for smart-home appliances is expected to be worth $38.35 billion by 2020, and will only grow as demand and consumer interest in smart appliances increases. Shoppers will be looking for smarter appliances, but these can be balanced with regular models depending on a consumer’s desire to have some or all of their devices connected.

Some categories are clearly just jumping on the bandwagon, such as a connected SDA, which is in most cases an expensive and underused version of a regular appliance.Yet when considering the connected home from a long-term financial and time-efficiency perspective, some are valid purchases, once you’ve weighed up the cost against its potential long-term worth. Many of these domestic appliance products are, however, costly and there’s a good chance that if you could afford a kitchen and utility room full of connected devices, you’re perhaps not going to be the one cleaning or cooking and directly using the connected devices.

For retailers, the margins on smart appliances are evident, however this must be weighed up against unit sales, which may mean a lower margin than your bread-and-butter range could achieve if it were occupying the same space in your store. While the investment in ranging smart appliances may not be attractive at the moment, remember that sales in John Lewis stores in the smart-home category increased by 81 per cent year on year from 2014 to 2015. This is a growing trend that will likely spread to independent retailers, as smart appliances become increasingly more mainstream.

Having a select range of smart appliances gives your store an aspirational product and proposition for shoppers to consider when looking for a new washing machine or fridge. It’s worth considering that many shoppers looking to purchase a new appliance are doing so as a ‘distress purchase’. These consumers will be looking for a reliable device, not necessarily one with smart features.

However, a demonstration from a knowledgeable staff member connected via a tablet or smartphone, to explain the benefits of the smart system, may persuade many shoppers to purchase for the long-term benefits. These include compatibility with future smart appliances they may add to their home.

My advice is to pepper your range with connected devices, but don’t forget the mass-market appeal of traditional appliances and offer choice at all price points and functionality.

Read more at http://ertonline.co.uk/opinion/smart-move/

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Should Brands Be ‘In’ or ‘Out’ of the Political Debate?

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When considering how much time, money, and effort brands invest in establishing their equity as a valuable asset, you have to ask: should they be risking this equity by adopting a political position? The answer is probably not, just as you wouldn’t debate religion or social economics in the context of your brand. However, as we are seeing in the UK with the EU Referendum, and in the US with the Presidential race, brands are getting braver and sticking their noses into the political debate, risking alienating those that buy their products based on brand alone.

It’s a given that a brand’s stance on social responsibility is of paramount importance, for example, ensuring they pay a living wage relevant to the countries in which they operate in, paying statutory taxes, and exposing corruption in sponsorship, as in the case of the rather embattled FIFA. But, when the debate shifts to who to vote for, you run a huge risk of upsetting red or blue, left or right, yes or no.

Why would a brand financially invest in finding the most appropriate brand ambassadors or advertising campaigns only to potentially destroy any good will created amongst their loyal fans by pinning their colours to a political cause? Customers are ultimately what generates revenue for any brand. Speaking to your audience in the correct manner is essential to stimulating interest and persuading them to spend their hard earned money on your brand. Therefore, apart from the obvious free PR achieved, why take a gamble by entering into the political debate?

We recently commissioned consumer research, speaking to 2,000 respondents on the effects of consumer spending due to UK’s pending EU Referendum. For those of you who are unfamiliar, the vote could see the UK, a member for over 40 years, leave the European Union. The In (remain) and the Out (leave) campaigns have created aggressive and clever campaigns, coercing some brands to comment.

What our research shows is that brands should proceed with caution when entering the political debate. When asked whether consumers agree with “I’m more likely to support the side taken by a brand that I trust,” 25% of 18-24 year olds disagreed. However, as we progressed to the 55+ age group, i.e. those with more disposable income and more likely to vote, this disagreement increased to 41%. It’s therefore a sobering thought for any brand to realise that you may alienate a large proportion of your loyal customer base – an audience not just buying for themselves, but also the wider family unit.

When asked if “brands should stay out of politics altogether,” a staggering 61% of respondents said yes, with only 7% disagreeing. When you dissect this across all age groups, it becomes more pertinent as the feeling is consistent with 55% of 18-24, 56% of 25-34, 58% of 35-44 & 45-54, and topped by 68% of the 55+ agreeing. Bring gender into the equation and 64% of females feel more strongly about brands staying out of politics, compared to 58% of males, making political brand association more unappealing as originally thought. With research indicating that brands should be politically agnostic, think about any brand looking to endorse Clinton and Trump.

The statistics are a clear indicator for any brand entering the political debate, for whatever reason, it could potentially become a toxic issue causing long term damage to your reputation across the ages and sexes. Why take the risk? A brand’s social conscience should prevail, and any legitimate lobbying should cease when it spills into the public domain. The damage caused to your brand is likely to outweigh any financial gain from influencing the electorate.

 

Read more at: http://www.brandingmagazine.com/2016/06/15/should-brands-be-in-or-out-of-the-political-debate/

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How to make the most of the Back to School period

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With more and more young people going to university, Back to School is becoming increasingly more important alongside Black Friday and the Christmas Peak trading period, with tens of thousands of prospective students looking to upgrade their laptop before beginning their studies in September.

No longer is going to college or university with a laptop a luxury, it’s a necessity with many establishments advising on spec and recommended models that will meet the needs of students whilst in academia. Many students will naturally be looking to the bank of Mum and Dad to fund this investment.

Therefore, your ranging needs to appeal not only to the user, but also their parents, which in some instances means you need to work harder to reassure them that they’re purchasing the right product.

The key to success is ranging a variety of price points, sizes and performance specs, appealing to families of all budgets. Focus your ranging on what consumer are looking to buy – for example ultra-slim convertibles and 2-in-1’s accounted for 21.9% of consumer device sales in Q1 2016, up 16.3% from Q1 2015.

With tablet sales in the UK falling by 8% to 1.8 million units in Q1 2016, convertible and 2-in-1 laptops are the budget friendly alternative to purchasing two different devices. Make this flexibility a key selling point for shoppers looking for the complete solution in one device.

As well as the specs of the laptop, it’s also about the package on offer. It’s not just about the device: it’s about the ability to print, within a budget, and the accessories such as cases, cables and bags that all students will need.

Many shoppers will not realise they’ll need to purchase extra accessories, so use this as an opportunity to increase your average basket value by attaching sales. Printers are an especially important peripheral, which all students will need to use frequently. However, printer sales in the Back to School period in 2015 fell 4%. Perhaps to avoid the same issue this year, and increase your print and peripheral sales, bundle them in with laptops and other accessories.

When attaching a printer to a laptop, speak to the customer about how much they expect to use the product. If they’re worried about ink costs, but are prepared to pay more up front, perhaps suggest a low-running cost printer such as the Epson EcoTank.

What’s important is understanding the needs of each individual customer, and making a suggestion suited to them.

Ensure that your staff in the coming months can speak confidently to customer about your products and can advise on the best options for them. Offering this complete solution, which meets the customer’s needs and at a budget that suits all, will help to increase sales during the Back to School period.

 

Read more at: http://www.pcr-online.biz/news/read/how-to-make-the-most-of-the-back-to-school-period/038378

With 23 days to go until the EU Referendum, Gekko research has identified that a possible Brexit vote is not hindering shopper confidence

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A new survey from Field Marketing agency Gekko has revealed that consumer confidence is stable in the face of stark warnings from both sides of the EU debate. Asking 2,000 UK shoppers whether they were worried about the threat of Brexit when making a purchase decision, the survey found that over half (51%) of consumers do not feel the need to put off making an important purchase until after the referendum result. This is especially relevant for older generations, with the survey finding that 60% of those 55 and over are confident in the state of the economy leading up to June 23rd. Thinking about the results of the referendum, a significant 73.5% of UK consumers stated that their decision to make an important purchase would not be affected by the result. In fact, only 6.4% of consumers felt a vote to leave would dissuade them from making a considered purchase such as a consumer electronics or domestic appliance product, which are rarely purchased on impulse.

The survey also found that, despite many brands coming out in favour of either side of the referendum, a high proportion (61.3%) of UK consumers feel that brands should stay out of politics all together, instead leaving the argument to the politicians. This is strong message for many big brands which have come out in favour of either side of the referendum, including Unilever, Ryan Air, EasyJet, HSBC and Marks & Spencer. However, these brands shouldn’t fear any consumer backlash from their stance – whilst the majority feel they shouldn’t get involved in politics, 49% don’t change their opinion of a brand depending on their stance, and only 21% have indicated that they have a negative opinion of brands that do not share their view. Most consumers will still buy a brand regardless of their political leanings.

Daniel Todaro, Managing Director Gekko Group, said: “what’s clear for brands is that consumers are currently very apathetic towards the possible economic impact of Brexit. Brands warning people against leaving the EU are failing to get the economic message across as 32% of consumers polled remain unsure or unaware of the impact of import tariffs being imposed post Brexit.”

“Looking at the high street, brands and retailers should not be putting off any product launches or promotions, as consumer confidence looks to remain high. However brands should avoid entering into political debate where they can. These results are good news for retailers who might have otherwise expected a dip in sales depending on the result.”

Read more at: http://fieldmarketing.com/news/gekkos-2000-shopper-survey-finds-brexit-vote-isnt-hindering-shopper-confidence/

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The main event

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As we approach what promises to be another ‘Summer of Sport’, retailers should remember that John Lewis saw revenues increase 8.6 per cent in the quarter including the 2012 Olympics, thanks both to its own sponsorship of the event and increased sales of third-party brand products who were also sponsors.

Whether large or small, all retailers have an opportunity to use a major sporting event to drive shoppers into store and convert them into customers. Be creative.

Here, I would like to suggest five steps to ensure your store is ready to get the most from this year’s sporting festivities.

Prepare

  • Find out who the sponsors are and which of your product categories will be seeing a potential boost, helping you to prepare by prioritising your planning to focus around the key categories.
  • Although there will be a lot of above-the-line (ATL) campaigns running during the summer, 44 per cent of consumers are not convinced by ATL alone, preferring instead to buy tech and CE products they have seen advertised, in store.
  • Brainstorm ideas to think of innovative ways to engage shoppers, and potential in-store events. Engage your staff with this, as they will likely have some great ideas from their time already spent with customers.
  • Think about asking brands for extra staff in preparation for the busy summer period – will you need more people to run your in-store events and create the customer experience you desire?
  • It seems obvious, but make sure you have enough stock of your main items. None of the events you plan will mean anything without the right stock.
  • Get ahead of the game – rather than waiting for the events to begin, make sure you’re prepared in terms of p-o-s etc. If needed, ask for support from your suppliers who will be running promotions of their own.
  • Use your event sponsor brands logos in your local advertising as an eye-catching link to your promotions and in-store experience.

Train

  • Make sure your staff are knowledgeable on your key product ranges, which may see a boost around the event. With 87 per cent of shoppers commonly asking for assistance in-store, and 36 per cent regularly influenced by advice offered by a staff member, your promotions and product demonstrations will only be effective if your staff can confidently speak to customers about the products and how they meet their needs.
  • Just as you’ll be using demonstration models to engage with shoppers, let your staff have a play with the products, allowing them to understand the unique features and selling points first-hand.
  • Make sure your staff are trained to support all customers coming into your store, regardless of their interest in the sporting events. The last thing you want is for a non-sports fan to be put off by the football-centric sales pitch of your staff. A general approach with good product knowledge will assist sales across all demographics, and aim to sell through the range to match budgets and needs.

Set targets

  • Work out what return of investment you want and set your sales priorities accordingly. Putting on a variety of events and promotions is a great way to engage with shoppers, but most importantly it needs to make financial sense before committing any funds.
  • Make sure your staff know what target they should be aiming for. Without cooperation between the sales office and the shopfloor, you’re not going to see the results you’re aiming for. It’s a team effort.
  • An incentive for increasing sales may help to motivate staff. Perhaps a sales league or a prize for most attachment sales will encourage your staff to join in with the promotions. It’s not just about exciting your customers – get your staff involved to build team spirit and make your store a fun and engaging environment for consumers. Ask brands to support your incentives.

Promote

  • Make window displays and p-o-s visible and branded to reflect any brand ATL campaigns. Brands increase their use of outside advertisement around large sporting events. For example, it increased by 25 per cent during the Olympics in 2012, according to Media Week. This is especially the case for sponsors of large events, so use the brand recall created by these adverts to your advantage, especially if a large outdoor ad space is in sight of your store.
  • Vary the offers you’re running across a sporting event. If there’s an important stage of the competition, such as Super Saturday at the Olympics or a Home Nation match, tailor your promotions and p-o-s to reflect this, rather than just having a generic message. Some variety will help keep your promotions fresh and will continue to entice customers into your store.
  • Get involved on social media. Virtually all the big brands will be getting involved with the official hashtags and messages. Join in online to further engage with customers away from the shopfloor, quoting brand tweets with your store details and promotions. During the 2012 Uefa tournament, 61 per cent of all the social media engagement over the group stage was with the top three sponsors, including the mobile network Orange.This is a huge following that you can tap into. Likewise, although not a sponsor of the 2014 World Cup, Nike was still able to reach more consumers through its social media offerings than the official sponsor Adidas – mainly because of Nike’s smart strategy of jumping on the back of the official hashtags with their own clever campaigns. You can do the same, tweeting and using Facebook to join in with the official social media campaigns.

Customer experience

  • Create engaging demonstration areas to inspire the consumer and allow them to interact with your products. Almost three-quarters (74 per cent) of consumers like to shop in-store because it allows them to experience the product before buying – a service they cannot get online. This first-hand product experience allows consumers to imagine it in their home and converts them from interest shoppers into buyers.
  • Make your store part of the wider experience – make the customer a part of the action by involving them as much as possible, whether through demonstrations or competitions and the like. Having some relevant p-o-s isn’t enough to excite shoppers, but building on their excitement by creating an engaging shopping experience will complete the customer journey through from above-the-line adverts to the shopfloor.
  • Ensure that any demo units are fully working. Shoppers need to see how devices work to know if they’re right for them, so ensure they are web-enabled and linked to other products to provide a truly complete demo. With 70 per cent of consumers saying a demonstration could tempt them to spend up to a third more. This could mean the difference between an entry-level and higher-price-point sale.

For more please visit: http://ertonline.co.uk/opinion/the-main-event/

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Celebrity Endorsement in Technology Still Requires Innovation to Succeed

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Is it a bird or a plane? No, it’s just Henry Cavill using his new Huawei P9+, making him the Ying to Scarlet Johanssons Yang. Both celebrities have cleverly signed up to be the new ambassadors for China’s most recognised international mobile handset brand, Huawei. As two of the most recognised actors on the planet with a box office track record that spans 44 films, which when aggregated amount to almost $8 billion in box office takings (with an average earning of $190 million for each film), why wouldn’t you? After all, Scarlett Johansson has a history of brand ambassador success (if you ignore the disastrous Sodastream ambassador role), which includes Moët and Dolce & Gabbana. She is also one of the worlds most profitable actors, with her movies making on average $84.90 per $1 spentthe highest grossing being Marvels The Avengers.

Johansson, with her own tech credentials in Her and as the indestructible enigma in Lucy, is a credible weapon in Huawei’s armoury, whose current mobile device market share equates to 7.3% (making it the third largest mobile handset manufacturer behind Samsung and Apple in global shipments). Yet in the West, ask anyone about the brand or how to pronounce it, and it would seem that few have heard or know about the most innovative tech firm to come out of China.

Cleverly, Huawei has not only scored with its choice in celebrities, but also in bringing the brand closer to the psyche of its users. For instance, by partnering with Leica, the German lens and camera manufacture of premium photography devices, they add traditional Western brand credentials to what, in tech terms, is a relative newcomer with ambitious plans. As Richard Yu, CEO, Huawei Business Group, comments, “We believe in cultural technology, born out of people’s curiosity and desire to be creative by changing the way they experience the world around them. With the P9, working with Leica, we have challenged the norm of what was possible in lens technology – a game-changer for smartphone photography.”

In comparison to other brands, its challenges are huge:  How do you engage with an audience who has likely never heard of your brand? Leica, Scarlett, and Henry are good starts to carving out positioning to a wide audience and extending the brand appeal through these partner choices, but it’s the look, feel, and ability of the product that ultimately wins through.

Working on how to engage with audience and retail partners, to convey brand message and vision, is crucial as Huawei embarks on this ambitious ATL product launch. As with any mobile brand, the carrier message and being recommended as the product of choice, will more than likely convert curious shoppers of the brand into customers — who will hopefully not only become advocates, but also loyal brand users beyond their first P9.

The challenge for Huawei is competing against the budgets of other handset manufacturers and creating a cost per acquisition, which makes commercial sense by bringing the ATL to TTL at this critical stage, to engage with carrier staff and ultimately consumers. No celebrity endorsements or brand associations will achieve the cut through your desired target audience without a good product that attracts the backing of retailers and networks to evangelise about your brand and your vision. These will serve to set your brand apart from the usual suspects and achieve financial and customer satisfaction for all.

Establish the brand without gimmicks, lean on your Android platform credentials, become the product innovators to establish your channels, and work hard to develop them. Once you’ve created your core, increasing confidence in your product and brand, go bold and take it to the mainstream — being mindful that you want to keep your premium status whilst remaining profitable, and avoid being yet another brand struggling in a saturated market.

What these clever brand associations and celebrity ambassadors allow Huawei to do is make some significant noise in the market, an enviable position to be in which other brands will scrutinise with envy. This opportunity to make an impact and a positive first impression with many via this campaign, if carried through successfully, will establish and increase brand recall to spark the desired curiosity in the product. This curiosity can be captured and developed by Huawei to become the brand that splits the mobile handset market and gives consumers a choice. Variety in a bland market makes consumers rethink which device to settle for, rather than opting for the default brand they’ve become accustomed to or network they’re familiar with selling.

Now, whilst glamour is assured, I’m not sure if Henry or Scarlet can break the market alone for Huawei. But, with the assistance of an established and respected brand such as Leica and some clever routes to market activation, it’s fair to say that Huawei is in a better position than most to grow market share in a crowded market and position themselves as a recognised brand.

Read more at: http://www.brandingmagazine.com/2016/05/10/celebrity-endorsement-in-technology-still-requires-innovation-to-succeed/

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