Consumer Electronics Leaders Identify Challenges

Reducing consumer confusion over new technologies and expanding the market for broadband are two of the key issues on which retailers and manufacturers must work together to grow the consumer electronics market, determined 75 consumer electronics industry leaders attending last week's Consumer Electronics CEO Summit. The goals were identified during a roundtable brainstorming session held at the fifth annual Summit, sponsored by the Consumer Electronics Association (CEA), entitled "Building Relationships and Delivering Value" held at the Resort at Squaw Creek in Olympic Valley (Lake Tahoe, CA), from June 20-22, 2001.

As part of the brainstorming, Summit attendees also discussed a broad range of strategies to address these and other key issues. Suggestions ranged from educating consumers about the benefits of broadband to creating closer retailer-manufacturer synergy on industry messages regarding new technologies.

"By all accounts, this year's CEO Summit was the best ever," said CEA president and ceo Gary Shapiro. "We succeeded in bringing together key consumer electronics retailing and manufacturing leaders to network, discuss the future of the industry and map out strategies to address some of the key issues we face. I think all participants walked away with a better understanding of our industry and a better appreciation for our business partners. As the industry association, CEA will review the suggestions made during the brainstorming session and determine how we can best help address these key issues."

CEA vice president, market research Todd Thibodeaux set a framework for the event by presenting new research on key issues facing the consumer electronics industry. Thibodeaux unveiled survey data looking at product returns and e-Commerce and Web sites. The CEA survey also explored levels of satisfaction with the manufacturer-retailer relationship, market success predictions for emerging technologies and customer support issues. Highlights of the research include:

* 73% of consumers said return policies have a big effect on where they buy.
* 57% of retailers say their Web site helps support their brick and mortar sales.
* 78% of consumers who shop online prefer shopping multi-brand to single brand Web sites.
* 60% of consumers who shop online visit manufacturers' Web sites as a top source of product information. Fifty-four percent of brick and mortar shoppers rely on friends and family as a primary source.

Establishing new partnerships between retailers and manufacturers stood as a key theme of the Summit. In his keynote, Best Buy Co. vice chairman, coo & president Brad Anderson called for a new paradigm between manufacturers and retailers, one in which both sides share a "vision, mission and set of values to develop a relationship based on trust." Anderson argued that in this time of tremendous change and opportunity, those companies and strategic partners who maintain a focus on the end consumer will emerge as winners. Technology can help companies achieve this goal, he said, by automating processes, speeding-up transactions and providing real-time information. Companies that make this shift will reach, "the ultimate goal - maintaining customer loyalty and retaining the brand well into the future."

Forbes president and ceo and former presidential candidate Steve Forbes used a mix of humor to underscore his argument that the current economic slowdown is the result of policy errors made by the federal government. Forbes blamed the downturn on an energy policy that makes it difficult for companies to access supply, Congress' inability to enact "meaningful tax reform," a collision between new economy companies and outdated regulatory policies and the failure of the Federal Reserve to provide sufficient money supply to support lower interest rates. He argued that while the fundamentals of the U.S. economy remain strong, government must create an environment for the U.S. and global economies to succeed. Forbes closed by outlining four principles for economic growth: enforcement of the rule of law, sound money, low taxes and bureaucratic non-interference in setting-up and starting a business.

Futurist and author Jim Taylor provided his insights on demographic trends and outlined recommendations for companies to be seen as visionary. He looked to companies that have been around for 150 years or longer to provide tips for today's companies. These companies, he said, never lost the availability of their original source of capital, were always sensitive to what was occurring around them, were always tolerant of "oddballs" within their company and none were in the same business in which the company was originally founded. He argued that visionary companies keep a "single goal in mind" and follow "stepping stones across a river," knowing where they want to go but not always knowing how to get there. Like Anderson, Taylor also emphasized the importance of trust and connecting to customers "with passion." If you develop trust with you customers, said Taylor, "mistakes may occur but your customers will forgive you."

CEA's Shapiro kicked off the Summit by providing an overview of CEA and outlining five issues which are critical for the growth of the consumer technology industry: energy policy, spectrum management, digital television, broadband deployment and services for hardware products.

"Each of these areas provide great opportunity to grow our business by providing and selling exciting new products to consumers," stated Shapiro. "But we must remain diligent and work together to ensure that government regulations enhance and not inhibit our ability to take advantage of these opportunities."

The Consumer Electronics Association (CEA) represents more than 650 U.S. companies involved in the design, development, manufacturing and distribution of audio, video, mobile electronics, wireless and landline communications, information technology, multimedia and accessory products, as well as related services that are sold through consumer channels.