Consumer Electronics Report: It's More Show Than Tell

While techies may understand and crave the technical specifications of their consumer electronics, brands in this category need to communicate in a language the masses understand in order to have mass appeal. Over time, this has meant placing less emphasis on a laundry list of specifications and more emphasis on communicating the benefits of their products, while also giving shoppers a chance to experience them in-store."Our research shows that [shoppers] have more information than ever before, but they're also more bewildered than ever before," says David VanderWaal, director of in-store shopper marketing at LG Electronics, Englewood Cliffs, N.J. "We're stripping out a lot of the technology spec language and a lot of our messaging in the store."Instead, display pieces and kiosks try to answer questions such as, "How is the TV used in your home? Where's it at in your home?" says VanderWaal. "It's more of a solution-based, lifestyle answer, rather than about the product's technology."So, rather than talk about the speed of its wireless network, T-Mobile, Bellevue, Wash., talks about what that speed does to help a consumer balance life and work. For example, a parent can check email in between plays of her child's soccer game without missing the action, says John Bell, client service director at TracyLocke, Dallas, the cellular phone company's marketing agency. "Shoppers are telling us, 'We care more about the end benefit' – typically from an emotional standpoint – than the technology in its pure form. If you're putting billions of dollars out there for a new network, you want to talk about your new network. But it's very hard for the average shopper to discern the difference."Average shoppers do understand the technology at some level, Bell says, but they still aren't motivated by such considerations. "People have made the transition that 2G is less than 3G, and 4G is going to be better. But what we haven't seen is the benefit from the technology: 'What's the relevance to me, the relevance to my family, the relevance to my life?' This is where CPGs [in other categories] have been for 30 years."The best way to understand that relevance prior to purchase is a hands-on experience, says Shawn DuBravac, chief economist and director of research at the Consumer Electronics Association, Arlington, Va. "Ultimately, the product needs to be demoed," he says. "It needs to be connected so that when consumers pick it up, they can see what it's like."Path to PurchaseResearch tells T-Mobile that 85% of consumers start their electronics shopping by investigating products online, says Bell, so the company uses its own website as well as those of retailers such as Walmart and Target to educate them. The sales pitch? "Let me tell you why this is relevant, then let me tell you why you should get it, and then, go to Walmart to buy it," Bells says. "You certainly want to have a route to conversion. What experience can I set up for you online that then bears itself out in the store?"T-Mobile uses a classic "30-10-3" principle to communicate with shoppers in stores. The brand wants shoppers to understand the category from 30 feet away; get a sense of subcategories and branding from 10 feet away; and receive price points or conversion offers from 3 feet away. At that last point, more so than in any other category, consumer electronics shoppers require assistance from store associates.VanderWaal says shoppers are requiring that help less and less, though, especially at Walmart and club stores. "The trend is going to continue to be more of a self-help journey," he says. "It's not a simple shopping process in the store. There are a lot of choices, and it's hard for a shopper to build selection sets in the store. In the old days, store associates would build the selection set for them." Now, online research before arrival, use of mobile devices in stores, and on-site kiosks allow consumers to do that themselves.LG Electronics places demo areas for its products in high-traffic spots at retail, enabling the brand to show rather than tell, VanderWaal says. "By pushing a button, you can literally experience it right on the television. Beyond the test-drive experience, we're connecting online activity with the store. We're trying really hard to drive consistent content on our website, the retailer's website, and in-store. As [consumers] bounce back and forth, they're seeing the same thing."Shelly Davey, manager for U.S. shopper marketing at Palo Alto, Calif.-based Hewlett-Packard, says product demos are generally the third thing shoppers desire after looking at fact tags and chatting up store associates. "They want to look, touch, feel the product," she says.Sharp Electronics, Mahwah, N.J., has shopper marketing tactics that span the gamut – online, social media, mobile, TV and P-O-P – based on research that shows there is no one best touchpoint to reach the brand's core customer: men ages 35-54 with children at home who want large-screen televisions. "No one point is going to be the right point for every single consumer. We have to be everywhere," says Terri Siebert, associate director of marketing communications.Office supply chain Staples, Framingham, Mass., has reorganized its consumer electronics section, highlighting different types of technology in "Easy Tech" areas. "We've changed the floor layout and added more area available for consumers to test out technologies," says Carrie McElwee, director of public relations. "We have added 'Easy Tech' associates, who are certified to help customers with technology needs find the right solutions." Staples provides a plethora of information online as well.Target, Minneapolis, has brought a "complete transformation" to its electronics and video game department in the past year, according to spokeswoman Kristy Welker. This has included larger footprints, the addition of stations to try out products, and 40-inch high-definition touchscreens that provide reviews, ratings and features as well as a push-button for shoppers to page a store associate.Going MobileAs mainstream consumers become increasingly "geeked out" by mobile devices, brands and retailers are not only trying to sell more of the devices but also determine how to best use them as a marketing tool. "Certainly, using mobile devices to gain additional information to compare prices, to look at alternatives, is becoming more pervasive," says the CEA's DuBravac. "Social media, like in any other category, has allowed the brand to go directly to the customer and create a relationship." And online research "is definitely more common with electronics than other [categories]."Mobile devices enable shoppers to obtain technical specs of a product, which keeps them in-store rather than making a trip back home to their desktop. "There still is some thirst for the actual specs on the product," VanderWaal says. "People will leave the store to go online to pull up the spec sheet – contrast ratios, things like that. You can get that on your mobile phone. We're trying to take away the barriers, the reasons they're leaving the store."LG Electronics also operates a mobile app geared mostly to providing product reviews. Shoppers can take a snapshot of the 2-D code on the in-store messaging and send it to a certain phone number. "They get back an instant link that they click on, and it takes them to the mobile website, configured so we give them the things they want the most," VanderWaal says.Sharp has a similar QR-code app that takes consumers to a mobile site that provides product specs, model-by-model comparisons, educational videos, and the ability to enter sweepstakes.HP has rolled out pilot programs to push out promotions to shoppers or to give them the opportunity to scan a QR code and watch a video about the solutions a product will provide, Davey says. "We view this as a very crucial shopper touchpoint in-store and out of store," she says. "I can walk into a Best Buy, and up on the phone is going to pop a potential promotion."Best Buy, Richfield, Minn., began focusing its attention on mobile marketing about four years ago when it realized mobile had become important to customers and was too often poorly executed by brands and other retailers, says Scott Moore, vice president of mobile marketing. "Best Buy, from a company perspective, wants to become the home of the mobile world," he says. "We have some stores that are trying to rethink the store, with that as the dominant assumption. How do we rebuild our store for the mobile world? There's a lot of blurring of the lines."Working closely with agency Launch Media, Plymouth, Minn., Best Buy has rolled out a dense network of QR codes on product fact tags that Moore believes consumers are using, although not as extensively as they will in the future. "I don't think it's had a transformative impact as of yet," he says. "There's a lot that these new mobile technologies can do to improve the shopping experience. The early adopters appreciate it."Hand in hand with that, Moore says, Best Buy has worked on the sales of mobile devices themselves. "We've invested in training and redesigned our stores, plus we've added 200 small-box, phone-only stores" in addition to beefing up the phone section of its 1,000 regular stores, he says. The retailer's monthly buyers guide provides comparisons and contrasts on the technical specs of the 90 phones available in most Best Buy stores.Target has installed mobile phone centers in 850 stores nationwide, and that number will climb to 1,450 by June, Welker says. "Target's in-store mobile shopping experience now allows guests to purchase and activate mobile phones from four of the nation's top carriers," she says.Research and RetailersBest Buy combines quantitative segmentation and qualitative shopalong research to uncover shoppers' attitudes, needs and disappointments. "It seems obvious you would do that," Moore says, "but it's hard to slow down, focus on the experience, and radically improve the experience and then build from there."Among the improvements to the shopping experience that have resulted from a blend of this research and anecdotal comments from staff in the field: the development of an "upgrade checker" tool that allows employees to verify when a customer's service plan might allow for an upgrade. "It's about building relationships with customers," Moore says. "They think they need to upgrade, but they can't remember exactly when."To target its customers with the right placement and mix of messaging, LG Electronics does quantitative research that provides real-time data of in-market shoppers coupled with qualitative focus groups that flesh out the numbers, VanderWaal says. "The only way to get down to what a shopper will act on in the store is to get research in the store. [But] we still mix in qualitative research with shoppers to understand more of the context and texture of their experiences. [Quantitative data] can't give you that."LG tries to work together with retailers on customer segmentation, and it has had productive meetings with Walmart and Best Buy in that regard. "What we're trying to drive toward is category solutions for retailers," VanderWaal says. "We want a key customer to sell more televisions in general. That's a common goal, and then we need to find the common pain points that are stopping us from doing that. It's tough to get holistic category solutions."T-Mobile is focusing on the "softer side" of data from sources like The Nielsen Co. "It's less about sales and volume, and more about how shoppers are thinking and feeling," Bell says. "How are they using the devices? How are they driving connections across families?"Sharp works with Best Buy, Sears and regional accounts on an individual basis to customize displays (for example, wall-mounted units vs. endcaps) depending on their needs. The company provides interactive content like push-to-play educational videos and magnifiers attached to televisions that help consumers understand why the colors are so brilliant, Siebert says.HP reorganized departments to streamline its shopper marketing strategy about a year ago, and Davey agrees that the category overall has been behind others in terms of researching customer insights. HP conducts a "very extensive" biannual study across all accounts that collects shopper data about where people buy consumer electronics, why they are and aren't buying, and what tools they're using in-store to make their decisions, she says. "We use insights to open up opportunities," Davey says. "For example, we know Walmart has huge traffic, but is consumer electronics top-of-mind to a Walmart shopper? Not so much. So we put programs together to try to address that, using our shopper marketing strategy."HP also has engaged with retailers around specific opportunities like how to sell more printer ink, Davey says. HP might spend two hours reviewing their quantitative insights and then, "We should be able to do some brainstorming on opportunities."Davey says an ongoing challenge for the consumer electronics category will be that the younger generation, with perhaps the greatest interest level in the products, is the least brand-loyal and most likely to be driven by their peers' online reviews. "They're much more knowledgeable about the products. They have all this knowledge, all this communication, at their fingertips."

Consumer Electronics Report: It's More Show Than Tell

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