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Should retailers create their own consumer electronics?

Should retailers create their own consumer electronics?
Wednesday November 13 2013

As a number of retailers release they own tablet devices in time for the Christmas shopping season, digital agency chief Peter Veash questions their impact on the retail landscape

First it was Amazon, then Nike and now High Street staples Tesco, Argos and even Carphone Warehouse with its upcoming Avoca tablet. 

They all want a piece of the tech pie and it is these retailers building digital into the heart of their organisations that are investing in their own consumer electronics, according to Peter Veash, chief executive of digital specialist The BIO Agency. And, he adds, these steps towards digital change are drawing brands closer to consumers.

“Nike has been laser-focused on developing consumer electronics, pushing the boundaries of what we’d expect of a sports brand that is known globally for its trainers and sports apparel,” Veash said. “The brand is fuelling the appetite for quantified self, with Nike+ FuelBand. 

“The electronic bracelet tracks athletic performance and with Fuel, a proprietary metric, measures movement relative to a person's age and body type. Nike already uses the data it collects from its Nike+ system to design products and build its brand strategy. For example, when the company found that Nike+ users were running on trails more than paved roads, Nike expanded its trail-running merchandise offerings.”

Staying ahead of retail curve

Tesco has also been very vocal in implementing digital strategies to stay ahead of the curve in the retail. “Tesco’s foray into this new market of technology, through the Hudl tablet, is a significant step in its data-driven business and will enable the supermarket giant to significantly add to its giant data pool with the behaviour and insights of more than 16 million regular loyalty card holders already on its files,” Veash pointed out. 

He added: “Argos is in the throes of implementing its five-year digital strategy, in which it is expecting internet sales to make up three quarters of its sales by 2016, many of which will be through own-brand products such as MyTablet in order to beat off online competition.” The introduction of tablets should therefore be seen as a step towards a more seamless relationship with their customers to deliver information, value and experience.
 
But going beyond this, Veash also said the route towards consumer electronics has been powered by the desire to inculcate digital change at the core of the business. “These brands have revamped their business models to incubate teams in delivering some change while the business continues,” he explained. 

Capitalising on digital change 

“Otherwise it is very hard to change. Digital shouldn’t be siloed into the marketing department; it needs to be at the heart of the business and that means employing this expertise at leadership level. Digital roles are currently in the shadows.” He also said how, in a recent interview, digital boss at Marks and Spencer Laura Wade-Gery argued that, without champions for digital investment at the highest level, the boardrooms of multichannel retailers may not be “sufficiently digitally literate”. 

“Argos’ recent appointment of former Amazon exec Bertrand Bodson as digital director highlights the move to help steer the retailer’s bid to be a digital-led retailer,” he added. “We have since seen Argos bring stark digital change with the new tablet and a link-up with eBay to introduce a click & collect service. Clearly, the board of the future will require a very different skillset.”

Savvy retailers are not waiting around to see how they can fit into the ever-changing digital marketplace; as Veash argues, they are embedding digital change at the heart of their business to respond to consumers’ needs. “In doing so, they are harnessing inescapable brand loyalty and opening new revenue streams that suit the lifestyles of the digital consumer who is always ‘on,’” he concluded.

Tagged as: Mobile | m-commerce | tablet | consumer electronics | Amazon | Nike | Tesco | Argos | Carphone Warehouse | The BIO Agency