Accessories Are the Silver Lining

Sean Wargo

Brick-and mortar retailers have good reason to be concerned about the future of their businesses.

Online shopping as an alternative is just too easy, too convenient. The openness and ubiquity of e-commerce also contributes to price deflation, as consumers quickly and easily find out where to buy at the lowest price. Whether it’s in the form of showrooming or not is irrelevant.

The bottom line is that a customer can easily bypass a storefront that has spent tremendous resources to bring a product as close to the consumer as possible. The damage is done the minute a consumer clicks and buys elsewhere.

As retailers, the temptation is to throw up our hands as the lowest priced source continues to eat our lunch. After all, what can we do against an open marketplace with freely available information? What can we do with a customer who just desires low price and convenience and dreads a traffic-ridden trek to the nearest store? If we listen to what consumers are telling us, there is a place for brick-and-mortar retailers in the mix. The trick is to figure out what you want to stand for, and own it. Our premise is that a retailer who maintains a reputation for providing solutions, driven by accessories, creates a long-term formula for success.

Accessory sales are one of the biggest opportunities for retailers today. Think about it: Many consumers simply consider accessories an afterthought once they get the primary device home and begin using it. But soon enough, they will head out to a store to pick up the HDMI cable they forgot was needed, or a new case for their smartphone. While they could order it online, the desire to keep using that primary device creates an immediacy that an online order just can’t satisfy. So the retailer, who may have missed out on the purchase of a primary device, ends up picking up the seconds. All in all, not bad, considering that accessories carry better margins.

Related story: Steve Koenig, Director of Industry Analysis, CEA

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  • Bill Matthies

    "Brick-and mortar retailers have good reason to be concerned about the future of their businesses."

    I agree with you Sean but not with what I believe is the implication of the statement that follows immediately thereafter.

    "Online shopping as an alternative is just too easy, too convenient."

    Online shopping is convenient but that isn’t the sole or possibly even primary reason for not buying at brick and mortar. Nor is a lower price, which is becoming increasingly difficult for online retailers to do given shipping costs and the growing trend of taxing internet sales.

    The more appropriate question is why shop at brick and mortar and if the answer is only becasue "we’ll meet or beat any price", that’s not enough.

    I read an article the other day where the author suggested that Best Buy should counter showrooming by charging $2 to enter the store; a refundable amount if the shopper then made a purchase. If the number of consumers necessary to sustain or grow BB’s business won’t go there for free why would they agree to pay $2 to do so?

    They don’t because there’s little reason for them to do so and until BB and other brick and mortar retailers address that fundamental problem, nothing will change.

    And as far as accessories are concerned, yes, that is a profitable business. However if the suggestion is to give up making money on the primary products those accessories are used with, how long-term viable a strategy is that? Selling accessories should be the "icing" on the "cake", not the cake itself.

    There are viable, prosperous brick and mortar examples although very few in CE. Apple does a good job as does Nordstroms, Trader Joe’s, and a host of independent coffee shops in addition to and in spite of Starbucks. If they can do it, why not CE?