3 Ways Consumer Electronics Retailers Can Expand Their Product Catalog and Accelerate Growth
Over the past year, we have all spent more time at home. The world has shifted to remote working and distance learning. As a result, many consumer electronics retailers have benefitted from the global increase in demand for computers and laptops. As consumers spend more on making their homes comfortable, retailers have also seen a revenue lift in other categories like home-theater products and kitchen appliances.
But even though online shopping is likely here to stay, it is not clear what consumer behavior will look like post-pandemic. There has been an overall shift to more cautious shopping as economic uncertainty continues to weigh on consumers. Therefore, consumer electronics retailers need to plan how they will operate in an ambiguous environment that includes giant online retailers and leading marketplaces like Amazon and Alibaba.
All players are aggressively competing for share of the buyer’s wallet, which has led retailers to rethink their product catalog expansion strategy. It’s no coincidence some of the most successful retailers have expanded their product offerings through a digital marketplace model. A good example is Amazon, whose product catalog has expanded to more than 12 million products. Today, Amazon makes up roughly 50% of all online retail spend in the U.S. To put it in perspective, that’s 5% of all retail spent across the entire country.
Having a broad product catalog that aligns with a retailer’s strategic objective is one approach to accelerating growth. Consumer electronics retailers can expand their catalog through 3 ways: bundled solutions, device as a service offerings, and open marketplaces.
- More choices through bundled solutions
Consumer electronics retailers must continuously find new ways of meeting customer expectations and create pleasant buying experiences. Thanks to the overall shift to shopping online, consumers are now demanding easier ways to discover and purchase products from one expansive product catalog.
This means consumer electronics retailers can no longer afford to only operate as a product reseller. They must consider transforming into a solution provider, bundling their devices with related services like insurance, tech support, data services, and extended warranties.
There are several examples where we see this happening today. Best Buy, a US-based consumer electronic retailer giant, now offers insurance and support services on top of each device sold as part of a solution bundle at check out. Similarly, Worten, a Portuguese consumer electronics retailer, recently acquired a smartphone repair services company to provide customers with a bundled offering of mobile devices and repair services. It’s all about offering an array of choices through bundled solutions to win new customers and increase customer loyalty.
- Greater flexibility through Device as a Service offerings
Through device as a service models, retailers can offer laptops, desktop PCs, or other devices, and preconfigure them with productivity and security applications and value-added services on an ongoing basis. The device isn’t purchased outright by consumers, but is paid based on consumption. This can simplify the purchase for the customer and provide flexibility, making it easier to buy a device fully configured. Consumers are increasingly embracing this approach because they value the overall package of devices and integrated services and support. Should the device break down, the consumer can easily get the device replaced.
The benefits for consumer electronics retailers are equally attractive. By integrating with various SaaS vendors, retailers can expand their catalogs and sell a complete solution bundle on a subscription basis, allowing retailers to attract a wider customer base. As an added bonus, when retailers receive the device after the consumer is finished using it, the retailer can refurbish and resell it to new customers several more times over the useful life of the device.
Expanded catalogs from device as a service models present a win-win for both the customer and the retailer. For the customer, this results in an easier, streamlined shopping experience. For the retailer, it leads to greater customer loyalty from a recurring relationship, steady monthly recurring revenue, and an opportunity to maximize returns on device investments.
- Broader offerings through open marketplaces
Several retailers have seen significant growth by converting their e-commerce shops into open marketplaces for third party vendors in exchange for a commission. In this approach, third party vendors can onboard their catalogs, manage orders, and leverage the organization’s existing services and capabilities.
By operating as an open marketplace, consumer electronics retailers can offer customers an expanded assortment of products and services. This can boost the retailer’s top line revenue as it will benefit not only from marketplace listing fees, but also from the increased traffic and sales that the expanded product catalog will bring.
Several retailers have launched open marketplaces in the last few years including Walmart, Fnac-Darty, and Target. Instead of selling standalone products, these retailers can offer a wider catalog of products and services through an open marketplace, allowing them to expand their customer base in a given segment, or in some cases break out of their niche and gain access to new audiences.
Expand your catalog with CloudBlue
Economic uncertainty is creating a challenging environment for consumer electronics retailers. But one thing for sure is the digital revolution is validating consumer preferences for a streamlined buying experience and a broader selection of products and services.
Get in touch with CloudBlue to learn how we are helping consumer electronics retailers offer a wider array of offerings through bundled solutions, device as a service offerings, and open marketplaces. For additional information, read our whitepaper on how retailers can differentiate their business. Also check out how retailers can achieve even greater growth by maximizing customer convenience and transform into a subscription-based business.