Vision - January/February 2008 - (Page 56) World of e commerce What Should you be Doing online? by Vik Murty 56 The Upside-Down It might appear as if the consumer electronics marketing industry has been turned upside down online. Customers today often bypass retailers and start their product research directly with the manufacturer. Retailers package goods online for sale in the form of Web pages. And consumers now are advocates—educating themselves, each other, and marketers, publishing their research and feedback for the world to see. Consumer electronics marketer, it’s time to take back control. The “Initiation Point” of Commerce Not long ago (in an age before the World Wide Web), when a consumer decided to buy a cell phone or camera, they would check out the options at a local store first. The consumer relied upon the staff to answer questions and to point out solutions and offer suggestions. Now consumers typically begin their search online. And more often than not, by going straight to the manufacturer’s website. Retailers might be completely ignored until the model has been decided, and it’s time to find the best deal. Along the way, customers may consult with hundreds of other consumers who’ve purchased the product before by simply researching on the Internet. The transparency of the online medium has put the consumer firmly in control of the purchase process. To those on the other side, the marketers vying for the sale, “control” has taken on a new meaning. It’s more about empowering consumers and giving them the tools and information they need to make the right purchase decisions. Those CE marketers (manufacturers and retailers) who engage consumers with transparent, complete information can take back control of sales performance in this upside down online world. January/February 2008 The Search for Information Consumer electronics purchases inherently require the consumer do a bit of research. But shoppers often are left to piece together the information needed to help them feel comfortable in making a decision. In eMarketer’s July 2007 study Consumer Electronics Online: Converged or Confused?, Senior Analyst Lisa E. Phillips writes, “The Internet is now an indispensable channel for consumers shopping for electronics: 77 percent of CE purchases are influenced by online research, according to a joint study by Yahoo! and CEA, conducted last fall. That translated into $25.1 billion of the $32.5 billion in sales CEA measured in 2006. Less than one-quarter of CE revenues come from online sales, however. Of the $111 billion in total CE sales last year, the NPD Group estimates bricks-andmortar stores accounted for $85.8 billion or 77.3 percent compared with $25.2 billion in CE devices sold online.” This quest for information clearly has driven consumers online in droves. Word of mouth has always played an important role in consumers’ buying decisions. The Internet takes “asking your neighbor” to a whole new level. In times gone by, you might have leaned over the fence and asked your neighbor Bob about his TV. Now, you’re more likely to read what Bob, and the rest of the world, are saying about different flat-screen models online. “Though a consumer may not have heard of blogs, they now are finding blogs and other independent authority sites as they are mentioned in magazine articles or show up in Google searches,” says e-commerce analyst for eMarketer Jeffrey Grau. “More people are writing blogs to address niche areas, so it’s becoming easier to find blog posts on a specific interest, such as MP3 players for example.” They’re also leaving their knowledge behind in the form of product reviews and comments to help others fill the information gap. As in-store experts have disappeared along with high margins, CE consumers often say they feel they know more about a product than the sales reps they speak to at retail outlets, notes Bill Mathies, president of market research-based consultancy Coyote Insight. Knocking on the Manufacturer’s Door So how is the consumer becoming the expert? One of the first stops a consumer makes is a manufacturer’s website. In a recent study by Channel Intelligence and Forrester Research, “58 percent of survey respondents (online shoppers) stated that www.ce.org http://www.ce.org
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