Consumer Electronics is no more about cool products. Digitial experiences can create billions of revenue.
Forrester’s advice to the consumer technology industry: Stop selling standalone products and start selling digital experiences that integrate products, services, and content in a way that’s easy for consumers to buy, install, and use. This strategy has the potential to provide an additional $13 billion in revenue in 2010.
- Forrester’s data illustrates the staggering gap between owning a device and powering it with services and content:
– 80 percent of the 18 million Web-enabled mobile phone households don’t buy data services. The revenue gap by 2010: $5 billion.
– 50 percent of consumers who own HDTV sets don’t subscribe to HD programming. The revenue gap by 2010: $3.4 billion.
– Only one in four consumers who own an MP3 player buys music online. The revenue gap by 2010: $3 billion.
– One in three digital camera owners doesn’t print these photographs anywhere. The revenue gap by 2010: $1.6 billion.
Forrester believes that the most promising opportunity for selling digital experiences lies with companies that can assemble solutions at the point of sale. But most big-box retailers’ strategies rely on offering consumers the widest selection of products at the lowest price. That opens the door for a new kind of nationwide retail specialist that Forrester calls a "solution boutique."
What is a solution boutique? Think Starbucks, not Wal-Mart. Solution boutiques — whether online or offline — will offer consumers the opportunity to get an education about what digital products, services, and content make the most sense for their lifestyle, resulting in a complete solution. Profitability at a solution boutique comes from the higher-margin service contracts, in-home installation, product upsells, and service bounties.