Holiday Season Looks to Be Full of Gifts for Tech Marketers
YORK, Pa. (AdAge.com) -- It's going to be a green Christmas, at least in consumer-electronics sales. Bolstered by a flood of new products such as motion-controlled game consoles, 3DTV, e-readers and tablet computers, sales are projected to keep the industry growing at a strong clip. The Consumer Electronic Association predicts $175 billion in shipments for 2010 in the U.S., a 3% increase over 2009 and a $9 billion jump in the group's earlier January prediction.
What's more, not a lot of it will be purchased off the sale rack.
So how will individual brands stand out and grab that green without dangling discounts during a time when price considerations still weigh heavily for most consumers? Instead of just the same-old electronics gambit of Black Friday price wars and bigger and better hype, expect to see exclusive content-partner deals, extras and freebies thrown in, extensive in-store demos and cross-category promoting. It's all part of an industry mind-shift to market the experience instead of the power a device can provide.
"What I used to teach my students at Syracuse in the '90s as the 'unique selling proposition,' is maybe becoming the 'unique experience proposition.' It's creating that excited, uncanny feeling that you have to have something," said Forrester Research analyst James McQuivey. "You've got to obsess about the customer experience."
Content deals, for example, are becoming much more important. And while partnerships for content such as Netflix and Pandora are now standard add-ons to many electronic devices, it's exclusivity that's becoming more popular.
Panasonic, Sony and Samsung have all locked up exclusive 3-D Blu-ray content specific to their TVs this season. But the December launch of "Avatar" in 3-D will only be available for Panasonic 3-D TV owners for a set amount of time, while Disney 3-D titles "Alice in Wonderland" and "Bolt" will only be available for select Sony Bravia 3-D TVs for a limited period. Samsung struck a deal with Dreamworks Animation and currently has "Monsters vs. Aliens" exclusively for Samsung 3-D TVs, with "How to Train Your Dragon" and the "Shrek" series of movies coming soon. Samsung has also secured exclusive rights to several IMAX 3-D movies including "Into the Deep" and "Galapagos."
At Microsoft, exclusive partnerships with media partners are a key marketing theme. Previous examples include Bing and "The Rachel Zoe Project" and Windows 7 with "Family Guy." Gayle Troberman, chief creative officer of Central Marketing Group, promised more this holiday, although she was mum on details. "This holiday we believe consumers are ready to indulge a little," she said. "We're feeling a new optimism from consumers, and you'll see that reflected in our advertising."
Microsoft's new advertising, from agencies including JWT, Crispin, Porter & Bogusky, and AgencyTwoFifteen, breaks later this month with a focus on Kinect for Xbox 360 and Windows Phone 7 both launching this holiday, along with Windows PC and Bing, Ms. Troberman said.
Demos, whether in-store displays or hands-on tours, also will be popular this season. The new motion-controlled game consoles, Kinect and also Sony PlayStation Move, along with tablets, e-readers, 3-D TV, and a batch of new mobile phones will all be showing up in stores and malls, encouraging people to look, see, and play for themselves.
"Sales are becoming more and more event-driven," said Shawn DuBravac, chief economist and director of research at the Consumer Electronics Association. "But creating an event can be done in many ways. Demos are going to be key this holiday season. They close the loop, especially with new products," he said.
Such products include the Amazon Kindle, which will go to retail for the first time this fall at Best Buy, and Apple's iPad, which also will be available at all Best Buy stores. IPad is also rumored to be headed to broad-scale retailers such as Target and Walmart.
"The important thing this year is just getting in front of customers," said Mr. McQuivey. "Walmart sells a lot of books and at attractive prices. People who go there for books and see any e-reader on an end cap at the book aisle will be inclined to say 'That's the one for me.' That's the reason Barnes & Noble has sold any e-readers."
Another electronics-marketing angle cropping up this selling season is cross-category competition. Amazon Kindle fired the first shot with a TV spot last week that took a swipe at iPad, noting that the experience of reading in sunlight with a Kindle is superior to the iPad.
"Kindle isn't competing with other e-readers; it's competing with other products that can do the same thing. You have to target consumers looking to get the experience your product offers vs. another product, no matter what category it's in," said NPD analyst Stephen Baker. "They've got to be much more competitive than just reducing prices by 40% to gain traction."
Mr. McQuivey said, "They may not be direct competitors, but they're all competing for your attention, your time and your money. Look at mobile phones, TVs, computers, tablets and all those; there are essentially five or six categories of products all competing for attention and wallet share. ... Kindle is very much selling to people a feeling of what it's like to be our customer. Ultimately that's the best advantage any device maker has."
Of course, with budgeting still in mind, there will be price breaks and drops, particularly around Black Friday, but insiders think those will be meted out as tactical moves, with likely no manufacturer price decreases on the new devices -- or Apple products -- this year. Packaging in freebies and extras, like accessories, additional games or movies, and gift cards, may serve as alternatives to price drops.