The passing of brand names and the market moves on

Lately, those of us with longer experience in the world of CE and electronics have seen many venerable name brands fail and disappear of worse. As with many things, it was change itself and the stress it causes that was and remains the key cause. Legacy issues, lack of capital, rapid business shifts all are realities in this venue and there are indeed times when all good efforts will be overwhelmed. However, we also constantly see a certain lack of clear eyesight on the markets, or plans on how to get to our consumers, users and partners. Of course, innovating is hard and so much is needed to create great products and services and that is paramount. On the other hand, if that is done in a vacuum or without coordination with the rest of the total product lifetime cycle then real barriers to success arrive. I am talking about thinking of going to market. One of the key unifying themes behind these troubles is change, and either lack of understanding or worse lack of action about what was happening to their customers and their markets. There are a lot of great products no one really buys, but in general it is because they are only for a very few despite the hopes and plans of the makers. There are a lot of great products that did not sell because they were way to early or way too late. And of course there are mostly a lot of products or services with big holes in their offer competitively that are sold in a maelstrom of excuses, and underperform and cost money and reputation and resource. Before you go to market, get some facts, measure you plans against it and then go hell bent.

Are you keeping great data and insight a secret within your organization? I recently attended a terrific webinar presentation by CEA and Traqline outlining survey result data on shopping patterns and preferences of consumers. While the webinar was well attended, as often I found it not being watched or later reviewed by the people it would help most.The kind of information and even more the insights drawn need to be shared across the organization. Data should not be kept safe in the hands of analysts or other admin or clerical staff who all too often are assigned to gather it and distribute to staff. The problem often lies with who is assigned to get and look at the information. With apologies to hard working staff, in far too many of my clients and contacts this activity is assigned to rather lower level staff who have little influence and often no incentive to make the information actionable. While sales staff may ask for a slide presenting their market share or rank, this is a trivial use of the data. Meanwhile, Product Managers, Marketing Management and other leaders in the organization may not get the insights presented to them. These insights may take some looking for as one manipulates the data, and of course need to be put in context of the firm's specific market position and goals, but if decision makers are not looking at this, they are missing a lot. Let's quickly review just some of what we saw in the webinar noted at the top. While there has been a whole lot of press on "Showrooming" and the corrosive effect of Amazon on other retailers, it may come as a surprise to most that for Best Buy it appears that Walmart is the biggest competitor. This is not to say that Amazon is not a consideration, but on the other hand what implications does this somewhat surprising conclusion bring? Well, it will depend on your product or service, but just consider these things. 1. Are you properly distributed to leverage this fact? Meaning are you in Walmart? Or are you getting leverage by not distributing there? 2. Are you considering the sizes of audience? If you just focus on Best Buy in this case and Amazon while you may be looking at large tracts of consumers, are you missing core audience for your product? 3. Is you pricing stance correct? Are you addressing the right audience? 4. Are you marketing assets aimed right? The point is that looking at information such as Traqline is providing allows you to see who is actually buying your and your competitors products. This is not your imagination or guess, but actual panel data from real consumers. Again, all too often I find marketers doing fine work on the personas of their target shoppers only to see that the actual buyers are quite different. So, if you want to sell to women or teens or sports enthusiasts the question is; are you? Do you know? Starting with some facts is really a good way to go. I try to tell clients to pick their path. This is something only they can do. Define your target and you can set your course. However, you need to navigate the real world and this kind of information helps you. It is for sales managers and marketing staff. It is for senior management and product developers, not just something to sit in the back office or to be brought out for justification. Set the information free and get the entire value chain involved. Starting with some facts and reviewing against data allows informed decisions. Yes, you will still make mistakes, but this should prove less costly and more accurate. You can be sure your high performing competitors are doing this. If you are worried over Amazon you should realize they analyze in depth. We will continue to write about this topic to encourage marketers to dig deeper and make actionable insights. This is the job of the top team, not the staff alone. It is not free, but services like Traqline are very affordable and much less expensive than mistakes in the market. Take a look and we will keep on poking this box.

the supply side and speed

So, one of the most stressful issues we see today is the need to refresh product offerings usually faster than is possible. When someone like Apple introduces a new paradigm like the iPad there is no good way to get products out to form an ecosystem and sales. This is also true of retail where surges or lags in product categories do not neatly fit into plans, i.e. new developing product and service areas are not so nicely scheduled as to fill in for maturing and declining ones.

What do you do about it? If you are on the product creation end, you need to look at your supply line and decide if you really have the partners in place to get it going. Price is important, but so is skill. Do your vendors have the skill to really make the new widget you need reliably, on time and with the quality and performance? Or are you kidding yourself, and then wondering why your item is late, and not competitive.

How about retail? Sure it is a pain to rearrange the deck chairs, but floor productivity is a real issue that also does not fit comfortably. This is not the weather, we can talk about it AND do something about it.

Both constituencies need to move along. Don't like the wireless space? Don't care for IT? Get over it and put it in your business plan as these are the current horses to ride. Get the expertise in house or outsource it. Face your legacy issues and start reforming your company to deal with what the current and likely reality is.

Yes, it is cruel that old models are dieing. It is hard to cut costs and get rid of old habits, friends, products, etc. but those that do thrive. This business is bigger than ever and driven by change, its the only constant.

Seek out help and advice if you are not sure how to proceed. It is out there for the asking.

test for a reason to believe

OK, so here we are in this economically depressed period. In this time, we can look to see about 15-20% of businesses fail or have to go through intense restructuring. Why that figure? It comes from looking at the amount America overspent past what it earned during this long two decade party. With several trillion in lost wealth and with folks having to spend no more than they earn, this is what we get.

Now, how do we expect to fare? Will our business or service be a winner or at least a survivor? To look at this is important, because otherwise we may be pouring money down a hole and working hard on the wrong things. I say, think about your business model and value proposition.

If you have one, great! If not, and even if you do does it pass the "elevator" test. That is, can you explain your business model and unique selling proposition (USP) in few enough words that it can presented during a short elevator ride. This is a great test as that is about all the time you will get from consumers looking at your store, or website or listening to you, or reading about you.

Think that is wrong? Don't bury your head, or try to explain around it. People look at packages for about 10 seconds before they move on or come closer for more. Stand in front of people like VCs for money and you will lose them if they cannot "get it" in that time. So, look at you store, or your website or your business plan and see if people can "get it".

If not, then try to write it up in Twitter type of prose (meaning as few words as possible). If you get past a page you are in trouble.

This is a very valuable exercise. It is not about being better, it is about people being able to grasp you are better. It is not about great product and services, it is about people seeing that you have them. If you cannot explain it, then it is time to figure it out.

Many have floated on the froth stirred up by our collective spender-bender. Now as consumers recover from the hangover they are thinking about why they are spending and where. If you cannot be succinct, they will move one. Once you have this done, it will be key to helping you decide what to do, and what to not do.

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.

First off

As this is the first post, perhaps it is best to put forth the purpose of this blog. That is to try to bring forth tough issues in the Consumer Electronics industry for inventors, marketers, retailers or consumers and suggest the caused and propose solutions. Hopefully not just from me, but from interested readers and collaborators. The CE industry is vibrant and offers wonderful results for people, but not without its warts and problems. A lot of issue comes from change as this is hard for people, yet the only constant one can find in the CE space. How to deal with change involves people first to a great extent, as well as technology, products, markets and more.
What we have always seen is that those who embrace change, willingly or not are those that last in CE. The "run away" strategy is very seductive and considering human nature, one that is often employed. Too often this leaves roadkill. Let's shoot for this site to try to avoid that.
all the best to friends, colleagues, participants and users of CE.