Vision - November/December 2008 - (Page 30)

That was the inspiration for AMT’s Protect-it card program this year to cover a variety of product categories, including laptop and desktop computers, ﬂat-screen televisions, digital cameras and camcorders. “The retailer simply buys the cards, sells them to the consumer at the time of product sale and reports the sales to AMT on a monthly interval,” says Saulnier. “Most retailers experience a 50 percent margin, adding a new revenue and proﬁt stream to their business.” The worst time to make a service plan pitch, according to Warrentech’s Williams, is at the last minute. “We’ve always said you have to introduce service plans at the beginning,” he says. “Otherwise it’s like re-opening the sale.” Instead, Williams suggests telling a customer that the product comes with a service plan up front. Then discuss reasons for the plan throughout the sale. And for products below the $500 level, Williams says replacement plans are helpful. “You can’t take a $99 product and sell a $79 warranty,” he says. “But you can replace it.” Accessories Enhance the Experience Another way to boost proﬁts is through accessory sales. And while accessory sales have been steady for most CE retailers, Kevin Lee, president of Monster Cable in Brisbane, CA, says retailers should consider stocking a better accessory mix ranging from inexpensive to premium products to boost this category even more. He says more revenue can be made by distinguishing, for example, between iPod tuners priced at $50 compared to others priced at $150. Accessories, while they do often sell themselves, don’t always do the best self-promotion. “The salesperson has to present why the accessory is worth it,” says Lee. “I think if they took the time to present it, the real beneﬁts are worthwhile. The consumer would appreciate it, buy it and get a better experience.” Two other important factors for increasing accessory sales are merchandising and signage. “We’ve had great success increasing attachment rates by merchandising accessories next to primary CE products,” says Illana Diamond, CEO of Sima Product Group in Oakmont, PA, “and then investing in eye-catching signage that educates consumers about the accessories they need to maximize performance.” Sima’s newest accessories, like LaptopWraps, can be merchandised both in the accessory and computer departments. “A great tool both in store and online is promoting a primary CE product together with the accessory,” says Diamond. “For example, an important family event like a reunion, birth of a child or vacation is a key motivator for many consumers to buy a new camcorder. Good lighting and a quality wireless microphone will help the consumer capture high-quality memories. So signage picturing a consumer videotaping a family reunion, together with a list of recommended accessories, will help consumers understand what they need to get the result they want.” Because most of today’s consumer electronics products have broad functionality (any single product may be purchased by many different types of consumers), crossmerchandising is one way to connect the dots between major products and proﬁtable accessory sales. “When accessories are sold together with the primary CE product,” says Diamond, “they improve the customer’s out-of-box experience which leads to improved customer satisfaction and reduced returns.” iPod Nation—One product. Hund patent Apple Computers may have the ne products, but for on iPod and iPho rs third-party accessory manufacture ices and resellers, the handheld dev shave inspired a monsoon of acce to enrich the total sories designed entertainment experience. Established manufacturers like well Bose, Monster Cable and Nike, as all as newcomers Incase and iKlear, iPod boat. In have gotten aboard the rap August, Monster partnered with Reimpresario Dr. Dre and Interscope nition headphones cords on high-deﬁ — with a price tag of almost $350 each es. more than the iPods themselv for “The headphones are designed and deep, deep low extreme clarity t bass,” says Monster Cable Presiden reds of accessories. age, out-of-the-box ear buds. The goal was to create a loud and clear listening system that would rdduplicate the experience of a reco ic ing studio endorsed by Dre, a mus never before signed celebrity who has his name to a product. “We want to educate consumers says that sound makes a difference,” inst the notion that Lee, bucking aga to digital music is somehow inferior that CDs, analog and vinyl. Lee says audiKevin Lee, who admits the target with the right equipment, including ng ence for the headphones are you iprofessional speakers and sophist iPod adults who already dominate the tal music can cated headphones, digi phic market. This is the same demogra io sound as good as traditional aud ning that’s smart, tech savvy and liste in,” formats. “The weak link in the cha its to rap, hip hop, rock and R&B with headphones that came have he says, “is the deep bass and punchy highs that in the box.” averbeen underserved, says Lee, by 30 November/December 2008 www.CE.org http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - November/December 2008

Vision - November/December 2008 Contents Shapiro's Spectrum In this Issue The Economist C4 Trends Going Global Visionary CES Unveiled Eco-Intelligence Is Vital in a Sustainable Global Market XGP— A Game Changer Enhancing the Tech Experience High-Definition Decade Public-Private Partnerships CEA Newsline Tech Speak Tech Policy Eye on Business Market Insider Just the Stats

Vision - November/December 2008

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