How Retail Trends are influencing High Tech OEM’s
Today’s High Tech Customers are much more connected and are so redefining the shopping process through online channels, mobile technology, and social networks. Customers can try and touch products in the stores, read online reviews, do price comparison via mobile apps and listen to the voice of friends via social media feeds etc. How customers interact with brands is getting more and more nonlinear and spread across different touchpoints online/offline.
To give you an example: Steve and Nicole just bought a new house and want to install a sound system. Steve visits the website of a consumer electronic company and creates a virtual shopping list. He also visits Amazon in order to read customer reviews. Nicole shared the sound system link via Facebook with her friends and asked for their opinion. Finally Steve bought the sound system via his iPad and picked up the sound system at the retail store. This example highlights the different offline/online options customers have today – ranging from multimedia content, product comparison, finding the best deal etc. – until they meet a final buying decision.
Furthermore the consumer involvement is increasing, where we are talking about the so called “Prosumer” which means the customer is much more involved in the creation process of products/services. The Stores are more and more becoming a social hub for mobile, social and digital branding and the convergence of appliances are resulting in a “battle for the home”. Meaning high tech companies like Google are now also entering new markets like for example the automotive business with autonomous driving cars. And finally relevance is getting much more important via localization and personalization in order to deliver a differentiating value.
When we look at the High Tech companies which are affected by this retail trends this are mainly High Tech OEM’s in businesses like Consumer Electronics, PC, Server & Storage, Telco- and Photographic Equipment.
These High Tech Companies are following different Retail Strategies. Either they have a so called “Store-in –Store Concept” e.g. Samsung launched 1400 “Samsung Experience” mini stores inside Best Buys across the country. Where the kiosks have been an opportunity for Samsung to showcase their products and allow customers to have a hands on experience with their products while increasing their brand awareness. Or they have their own retail stores like Bose or Samsung, or a multibrand store like Media Markt where all consumer electronic brands under one roof, or an online store like Samsung or Apple.
All the highlighted trends are a big challenge for the High Tech OEM’s and retailer but also an opportunity. The biggest challenges High Tech OEM’s and retailers are facing is probably that a large portion of the data trail customers are leaving is disconnected. So it is much harder for them to fully understand customer needs and to deliver the right content at the right time via the right channel. On the other hand the availability of a vast amount of operational and customer data can provide game changing insights that drive growth and profitability.
Fundamental to making that happen is the need for a greater degree of retailer-manufacturer collaboration in the following areas:
Alignment on strategic objectives – Retailer and High Tech OEM’s need to align on their omni-channel strategy, their innovation investments in new technologies like internet of things, beacons etc.
Sharing of POS and Inventory Data with suppliers
Forecasting and Demand Planning – accurate daily store-level data from the retailer underpin the forecasting process of the High Tech OEM
Building a comprehensive Customer Profile out of social channels like Facebook, Instagram, Online Feedback etc., which provides a consistent picture of customer preferences and buying behaviour for the Retailer and the High Tech OEM
Customer Segmentation, relevant offer targeting, promotions etc.
Channel Selection according to Product Segmentation – High end or entry level product need to be distributed via different channels. Entry level products can be perfectly sold via the online channel whereas high end products should be sold via physically stores.
Optimized Fulfilment processes – The offering of new fulfilment processes like „click & collect“, „drop-ship“ or „same day“ shipping are requiring optimized supply chain processes. For instance store and distribution center inventories have to be seamlessly integrated on a single common inventory system.
Retailers and High Tech OEM’s have already recognized, that they need to become more customer centric and digitally empowered in order to satisfy the increasing customer expectations. This can be enhanced through a better collaboration between the High Tech OEM’s and the retailer by exchanging the right information, using common platforms and integrated supply chains. This leads to an improved customer experience, a better shopper loyalty, a better brand positioning and finally to an increase in sales and market share.