By Lisa Johnston
New products on display at the American International Toy Fair, held in N
If you’ve read some of my previous posts, you know I advocate “complete experience” merchandising. Consumers want the “best” price possible, however, not at the expense of everything else.
The product must be “right,” and that includes before, during and after sale support, and of these three, none is more important than what happens after. If they’re not happy, both the retailer and the manufacturer will suffer.
I recall much argument and consternation regarding gray market and knock-off goods during my time as Pioneer Electronics’ marketing and product development senior VP for car and home. Who should pay to support legitimate product that came from some often-unknown source? What about the knock-offs consumers soon found under performed relative to their expectations for that brand and retailer? And what happens if the product doesn’t work at all?
Sadly, it’s no different today. While the industry is busy finger-pointing responsibility to anyone but itself, the consumer is standing on the sideline making a list of retailers and manufacturers they no longer trust.
I don’t blame them; all they know for sure is that they bought what they thought was a legitimate product, from what they assumed was a reputable dealer, made by a reputable manufacturer.
And I don’t blame retailers and manufacturers that, in good faith, try to do the right thing while not wishing to pay for the consequences of the illegal actions of others. However, the fact that I don’t, that YOU don’t, doesn’t change what the consumer thinks.
It is well past time to address the root cause, which is product sold to consumers by individuals and companies who have neither the ability nor intent to support it after the sale. Excluding those whose unethical business is doing that, we should be able to agree that is what is needed. The only remaining question then is how?
“Authorized dealers” have been around as long as gray goods and pirated knock-offs. I suppose the claim of authorization was meant to assure the consumer that what they buy and who they buy it from are trustworthy.
Good luck with that. Those who make and sell such product have even taken to stealing the indications of authorization. Because anyone can claim authenticity, many do, and consumers have largely discounted that which is supposed to assure them.
However, while the execution has not been good, the basic idea still is. What needs to change is how consumers are assured they are buying authorized product from an authorized dealer, as well as who is providing that assurance.
The sale of unauthorized product is not unique to CE/tech (who’s to say the “Levis” I’m wearing are authentic Levis?) If a product and/or brand has value, rest assured someone other than who owns that product/brand is attempting to benefit from it. But my pants are much less likely to require after-sale service than is my unbeknownst-to-me gray-market Samsung S III phone.
In other words, when it comes to CE/tech, the problem is exponentially greater, and, as a result, so too should be the effort to do something to correct it. Fortunately, I believe we are finally seeing legitimate attempts in that direction.
Siras said their intent is to provide “data intelligence services to track, authenticate and safeguard products, while promoting ethical business practices between our customers and partners, and upholding consumer anonymity.”
Channel IQ’s Authorized Retail Badge program said it is “the only trusted claim to a relationship between a manufacturer and retailer that build consumer confidence, signal a quality online shopping experience and guarantee an authentic product.”
While the industry has yet to acknowledge the ultimate solution, efforts such as these are leading contenders to “flesh out” the missing bits of “complete experience” merchandising. It’s about time.
William Matthies is the CEO of Coyote Insight, a planning consultancy specializing in the consumer electronic industry, and the author of “The 7 Keys to Change.” He can be reached at email@example.com or at (714) 726-2901.
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