Friday, April 17, 2009

Who's to blame? Woe is me, and other fables for the CE trade

Blame and Woe, two things to get over right now. All human activities have their ups and downs and so it is with the CE industry. It only takes listening for a short while to any two or more people in the trade to hear about "who or what" is to blame and how much "woe" is coming to them, and of course...the usual position that someone should take it on the chin with an often unrealistic view.

Yes, it is easy to agree that more margin is needed for retailers and vendors on all sides. On the other hand, this is expected to be done without raising prices, or cutting features, needs large volumes of sales and a lot of promotional help. Folks, this industry has grown as much as it has due to extreme value and capability. The horse left the barn a long time ago on a measured pace, smaller industry that had high margins. In fact, it seems the go-go model of CE is one that keeps picking up more rather than less practitioners and this can be seen as an endorsement of the realities one needs to operate in.

If margin or exclusivity were all it was cracked up to be, then why are so many low cost, low margin providers doing so well now? And even if your business needs wide margins to cover costs, that does not mean that all low margin offers are bad. It means you need to think about how to blend what is needed into the mix rather than act like it doesn't exist.

In the end, we are all slaves to the markets. It is people, consumers, users that really dictate the shape of the market. When the market or players in it adjust to these realities and do well, that is not bad or evil; rather it is something to look at seriously. When was the last time you looked hard at the real competitive universe and thought about what you place, space and unique value are in it? Do it, and you will find a good path as there is a whole lot of CE business out there. You need a plan.

Of course, what is also happening is the one and only constant of the CE space...change. Now change is hard for people, habits of thought and practice are engrained, hard to break and often loved. All part of the "run away" mentality. Get over it. Change is what drives the industry.

Think you cannot adjust to the cost structures of IT products like netbooks? Don't like working with wireless carriers? Well, you got over the yen going from 300 to 100 per dollar, the digitization of most media and equipment, several major retail cycles; you will get over these too.
And if you choose not to try, then prepare to either get mowed under, marginalized or to spend more money, time and grief catching up.

A better idea is to embrace the change. Keep an open mind. Learn about the new products and areas. Think about how you fit in. With all the connectivity abounding these days, it will be easy to find a place to add value. Those that consistently have moved with the reshaping of CE, and have added value have prospered.

Both the good and bad news is that times like this will bring a lot of good people down. On the other hand, this is also an opportunity and an opening for share gains and growth. When others are focused inward or frozen against a changing background wondering why them, it is easy to run right past them. We have seen this in the television market where the brand names are very changed from just some years ago. We are seeing big changes in the handset space. Now we are seeing shifts in the PC/laptop/netbook space. In fact, we will see it in all the product and service spaces.

So, get educated. Take a look around and find out. Make a plan that you can execute. You will find that it is out there and much more rewarding than parsing blame. Next entry we will start to discuss some ideas of how and what you might do.

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