The More Things Change in CE, the More They Stay the Same
For the 40-plus years that I have been in the consumer electronics (CE) business, retailers have been focused on how to grow revenue, increase margins and reduce returns. It was true in the 1970s and it still rings true today. Whether the focus of the business were TVs, VCRs, CD players, PCs, cellphones or smartphones, the issues are the same for retailers – “How do I make money in this low-margin business?” and “How do I get customers to shop at my store and not my competitor’s?”
The answers today are also the same as they were 40 years ago: carry (and have in stock!) the products that consumers want to buy, make a compelling proposition to them and offer quality service during and after the sale. It is also important to engage with consumers in the ways they want to communicate – via online platforms, and through traditional and social media.
To grow revenue, increase margins and reduce returns, those of us in the CE business traditionally have turned to our sales staff. This worked well when the salespeople were the primary influencers of what consumers purchased, but does not work well today. More than 80 percent of CE consumers now get their information online, and use stores and online sites primarily to transact, not help them make a decision. It seems that consumers today are primarily influenced by user reviews and what Amazon suggests to add to a purchase. I believe this will be a leading trend going forward – and retailers need to understand how to make that work to their advantage.