Good news folks. The global consumer electronics market is not looking too shabby. Not too shabby at all. Indeed, a study by Persistence Market Research describes the future growth as “staggering”, and predicts it hitting US$2.9 trillion by 2020. Driving this growth is the booming demand for smart phones, wearables and smart homes devices, coupled with the rapidly increasing online market.
But despite the future looking so bright, consumer electronics remains a highly competitive space, and brands are not without challenges. Chiefly, there’s the increased dominance of Amazon and Best Buy. How to compete with these titans? Well, one way is leading to a growing trend among brands divesting in their own DTC eCommerce efforts, instead channeling customers to retailer sites.
It’s by smart strategies like this that consumer electronics brands will not just survive, but thrive, and get their slice of that aforementioned US$2.9 trillion tart. In this blog, we look at this and five other trends defining the future in this exciting industry.
1. Leveraging The Power Of Retailer Dominance
Amazon and Best Buy continue to dominate the consumer electronics market, and unless there’s a cataclysmic event (horribly possible with Trump’s finger hovering over the button), this ain’t gonna change in 2018. This dominance is reflected in a growing trend among brands investing less in their own DTC eCommerce efforts, and more in those on third party platforms.
Two big brands leading this trend are Toshiba and Sony, with both discontinuing their onsite eCommerce functionality. In the US, Toshiba now sells exclusively through CDW, while Sony’s product pages link to a nifty list of retailers. Other brands should follow suit, because our data reveals that this can lead to conversion rates of up to 30%.
2. The Booming Demand for Smart Appliances
2018 will see not just the consumer electronics sector taken over by killer AI robots, but the entire world. In fact, this blog isn’t even written by a human, but by a giant Alexa on ‘roids. We jest! However, the growing market for smart appliances powered by the IoT, along with advances in voice control and AI, mean the vision of the seamlessly connected home is coming together.
And this spells big business for consumer electronics, as demand is booming for smart home appliances. Indeed, the global smart home market is expected to reach an estimated $107.4 billion by 2023. To meet this, consumer electronics brands large and small are developing solutions in existing devices, as well as new, stand-alone products.
Some of these products will succeed, more will fail. But brands must embrace innovation and fear not failure. For only through this process will the lucky breaks and lightbulb moments occur to really accelerate a brand in this space.
3. Every Consumer Touchpoint Matters
Omnichannel retail continues to gain traction in consumer electronics. And not for nothing: a study by the Aberdeen Group revealed companies with strong omnichannel strategies experienced an average 9.5% YOY increase in annual revenue, a 7.5% YOY decrease in cost per customer contact, and a healthy 89% customer retention rate versus companies with poor omnichannel engagement.
Best Buy’s omnichannel strategy has been particularly successful. Indeed, it has even been hailed as ‘The Creator’ of omnichannel. But the concept can be a tricky one to grasp. In ChannelSight, we see it a bit like brands emulating God to succeed. That is, being omnipresent: present everywhere at the same time. Simples!
Chiefly though, what omnichannel involves in earthly terms, is the following:
- Delivering a consistent consumer experience across every touchpoint on both offline and online channels
- Consumer electronics brands must be particularly mindful of the ROBO (research online, buy offline) trend, as according to a report by Bazaarvoice, this is one of the biggest product categories consumers are engaging in ROBO behavior with
- Factoring in the different devices people use to interact with your brand
The secret to a successful omnichannel approach though, is not getting overwhelmed by its potentially brain-melting possibilities. Because in essence, it’s just about delivering the most customer-centric experience possible. And this should always form the beating heart of any brand strategy.
4. Social Media Is Not Just A Fad But A Must
Social media’s just a fad, right? Wrong. And considering consumer electronics is the product category most influenced by social media posts (followed by fashion and household items), no brand can neglect it.
Obviously a targeted social media strategy is nothing new — any brand must always strive to distribute the right content at the right time across the right channels to the right people. But what’s crucial now is to keep an eagle eye on the ever-shifting social landscape so brands can continuously refine their social strategy in line with it.
Take Facebook and Instagram. According to a report by Gartner L2, in 2016, 95% of social interactions for consumer electronics brands in the US were on Instagram, and 3% on Facebook. In 2017, these figures changed to 78% for Instagram, and 19% for Facebook.
Aligning social strategy to these changing tides is key. Gaming brands are finding success this way by running long-form content such as blogs and videos on Facebook — such content would not work so well on Instagram. Facebook also has larger communities for promotion of targeted media, and the average growth rate of Facebook communities has more than tripled in the last few years. Samsung boasts the largest Facebook community of over 40millon followers, whereas GoPro is large and in charge on Instagram, with 12million followers.
These trends and this engagement must be leveraged to the nth degree by making all social content shoppable. Like, comment, share and shop. Minimal effort for maximum results.
5. The Rise Of mCommerce
Mobile-driven eCommerce, AKA ‘mCommerce’, is growing 200% faster than eCommerce overall. But conversions remain hard to capture, with one of the biggest challenges being a complicated checkout process on mobile.
As more purchases are made on mobile, a brand’s arch nemesis is not necessarily its chief competitor, but conversion friction on its mobile website. Mobile optimization and removal of friction points is paramount. Simple and seamless does it folks!
Apple are the masters of this in the consumer electronics space. Most importantly, their entire checkout process takes place on just one page. But they also offer other such stuff o’ digital dreams, including a geolocation-enabled mobile site, which drives users to Apple stores.
Interested to learn more about the future of Consumer Electronics and how brands are charging up online conversions? Save your place on ChannelSight’s upcoming webinar ‘Future Proofing: How Consumer Electronics Brands Are Charging Up Conversion Rates in 2018 And Beyond’ taking place on May 31st. In this 30-minute session, you’ll learn how to:
- Compete with leading retailers like Amazon and Best Buy
- Evolve your products and digital strategy in line with technological advances
- Optimize your brand performance across all digital channels to succeed best in the online store
Wait are you waiting for? Save your place today!