Why CE Manufacturers Need New Retail Sales Data
New research from Accenture claims manufacturers need to focus more on developing new, cohesive business models called “superstacks.” They have also been advised to create more sophisticated social media programs and more extensive and predictive analytics capabilities. They claim that manufacturers need to get closer to retailer selling data to become effective.
The Building Customer Loyalty for Consumer Electronics Manufacturers polled more than 10,000 consumers from 27 countries including Australia. Researchers discovered that 20 percent of consumers claimed to they feel “loyal” to their current consumer electronics manufacturers suggesting that 80 percent feel no loyalty.
10 percent of consumers said “it’s too much of a hassle to switch manufacturers,” further implying that 90 percent are quite willing to switch.
The top two drivers for customers to switch manufacturers are “competitive pricing” cited by 43 percent and “value for the money” referenced by 35 percent.
48 percent of consumers said that they “shopped around for better deals.”
Accenture claims that manufacturers need to understand how customer loyalty has been built in the past and how it will impact them going forward.
The report, which can be found here, details the following issues:
Historically, manufacturers have strived to increase customer engagement and add perceived value through product innovation — adding new or improved features to combat perceptions of product commoditisation. Now, however, innovation in consumer electronics is being driven more by a new business model Accenture labels as a superstack. A superstack is a more extensive and comprehensive integration of operating systems, semiconductor chips, devices, applications, and end-user services than the industry has traditionally achieved.
Instead of traditional product innovation, such as adding a global positioning satellite feature to a smartphone, superstacks are more about innovation, holistically and thoroughly bolstering the overall experience using the product. The Apple iPhone has been a trailblazing example of a superstack engendering exceptional customer loyalty thanks to its widespread, tight, and smart integration of technologies, applications, and services. A wide array of consumer electronics manufacturers are positioned to benefit from using the superstack concept and model.
In fact, according to another recent Accenture survey exploring the superstack trend titled Competing in a High-Tech Industry Superstack, 83 percent of surveyed executives from the consumer electronics and other industries said their businesses have been or are being impacted by superstacks.
Unlike one-off feature enhancements, superstacks have the potential to win more customer loyalty and satisfaction and prompt customers to pay more, and be less concerned with prices of products, because they will pay for the better customer experience.
To improve customer loyalty during the next several years, superstack innovation will be crucial for these manufacturers. They need to sell more than a “box” device. Selling add-on services such as customer service and cloud computing, key elements of superstacks, enables direct customer contact. If they have a focused superstack strategic business model, manufacturers can deliver these services successfully.
To further enhance their superstack business models, manufacturers need to evaluate which systems, chips, applications, and services will best combine with their devices, such as smartphones and tablet computers, to deliver more significant value to consumers and generate more customer contact. While smartphones are one early competitive arena, makers of other consumer electronics devices such as smart TVs will need to find ways to integrate applications, social media, and other innovative services with their devices. In all these segments, creating intelligent superstacks will require more use of analytics by manufacturers to identify consumers’ specific requirements.
Specifically, using more predictive and consistent analytics methods and processes, these companies will look upstream to identify reasons why their existing customers remain customers and apply those insights to the broader customer base. Such approaches would minimize customer switching. These companies will also seek to analyse the price trade-offs different customers may be willing to make against all components of the offer, including product features, customer support services and ongoing communications efforts, to provide optimized pricing for each type of customer.
Manufacturers will also benefit from interacting more with customers via social media channels. For instance, some consumer electronics companies are using online crowdsourcing platforms to encourage consumers to make suggestions for new offerings. Others have created sophisticated online communities that enable customers to interact with the company and each other.
Accenture claims that all forms of engagement are particularly critical because consumer electronics Companies operate in an indirect channel model similar to many of the consumer packaged goods companies.
Accenture said that manufacturers need to collaborate with retailers, to get access to substantial consumer data. They also need to engage direct with consumers through social media offers as this delivers a chance to shrink the separation between consumers and help drive customer-driven innovation.