• by Jonathan Blum , July 20, 2006

Sales, support, content downloads, and more can be found online

Consumer electronics, like all of retail, used to follow three rules: location, location, and location. But on the Web, particularly in retail electronics, vendors are following new rules. Placement and relationships are important, but content is king. To wit, device makers are making sophisticated content part of how they sell.

"Everything that this company does starts with the Internet  every product and every advertisement," said Peter Weedfald, senior vice president, consumer electronics and North America corporate marketing, Samsung Electronics, Inc., in a recent speech. "Often this is for information, but sometimes it is for entertainment."

Seemingly everything is fair game as a consumer lure: aftermarket support, prearranged product sales, targeted e-commerce sites, and even content downloads.

"We are constantly balancing the message versus the product," says Shelby Seville, senior vice president, IP director at StarLink Worldwide, a unit of Starcom MediaVest Group. "Most of the new stuff is more experimental. But I find it fascinating to see how people are using new tools."

Strategies and challenges vary by company. For example, Samsung Electronics must balance promoting vast product inventories while breaking out a few dozen bestsellers. To accelerate sales, Samsung has built a Web presence to support several flagship products.

One site, a wireless Web accessories page called Samsung Mobile Fun Club, is a rich mobile content archive targeted by country and language. Shopping is the glue: Consumers can choose from thousands of wallpapers, music downloads, and ringtones. American users might choose the latest Nelly track; South Asian consumers can download ringtones from Simone D Singh.

Samsung attracts Web traffic by giving consumers stuff they want, such as music, and things they need, like tech support. A printer support site called Dr. Printer gives visitors a step-by-step breakdown on how to generate paper text for a variety of prints.

The approach seems to be working. The company was a Top 20 brand in 2005, surpassing Japanese giant Sony Electronics, according to Interbrand's brand power ranking, which described Samsung as "the success story of marketing in a fragmented world."

The Bang & Olufsen way.

Where Samsung relies on a broad ad sweep, Bang & Olufsen, the Danish luxury electronics maker, is more targeted. B&O, founded in 1925, generated about $540 million in sales in 2005, according to company financial statements. B&O makes some of the best televisions, sound systems, and portable electronics anywhere, but its products aren't cheap. Speakers, for instance, can run $15,000 each.

Most of B&O's electronics are built in a single plant in Stuer, Denmark. The company's Web site offers a virtual tour of the factory, a tourist attraction in Denmark.

Every B&O product is made to order and sold in one of 1,700 brick-and-mortar shops worldwide. Though a company e-store sells such B&O products as personal electronics and portable systems, most of the inventory is sold through traditional retailers. The company views the Web mostly as a way to spur walk-in business.

B&O's Web site has a sophisticated interactive product demonstration service that links specific customers with sales reps in stores. There are rich-media product demonstration pages that lead to demos in the shops. The customer support areas lead to in-store support staff, and there is even an after-market sales channel where B&O aficionados buy and sell used equipment and maintain their warranties, which are also supported in the stores.

"Leads are scrupulously developed through search and targeting by category, price, and demand," says Zean Nielsen, Bang & Olufsen marketing director. "We are trying to keep the profit and the customers in the shops."

B&O is succeeding. Repeat purchase rates of in-store sales are more than 50 percent, says B&O's Nielsen. As measured in turnover (an equivalent to net sales in Dutch accounting), revenues were up 13 percent in 2006 over the previous year, according to company financials posted on its site.

Motorola's blended bet.

Sitting somewhere between Samsung's sweeping vision and Bang & Olufsen's targeted strategy is Motorola's hybrid use of the Web.

Pressure from Samsung and other Asian consumer electronics players has forced Motorola to restructure. The company recently spun off its semiconductor business into a separate unit called Freescale, and Motorola extended its brand into wireless, telecommunications, and cable infrastructure, products, and services.

Motorola uses a two-pronged sales strategy on the Web. It heavily promotes slick consumer products, which include the RAZR and Q phones, while also supporting a vast business-to-business infrastructure. That market includes products such as motowi4, a network enabling speedy wireless access and cable set-top boxes.

The venerable brand blends scale and niche marketing as it tries to be both wholesaler and retailer. The company is organized by brand categories, such as connected home, consumer products, and enterprise. Motorola mirrors Samsung's tactics: Each division on the Web site helps promote the company's full line of products.

Like Samsung, Motorola runs a separate Web store for many of its consumer wireless products. The company has tie-ins with service providers and supports the international market.

Motorola uses a consistent style to give its sites an allure. Web site production values are high and everything has a clean "Moto" look.

"We're not just offering a hard product sell or standard support information with our Web site; we're trying to create an experience for the user," says Jennifer Barilla, interactive marketing manager for Motorola.

Motorola's annual sales were up 16 percent in 2005 over the previous year, according to Securities and Exchange Commission documents. But the growth has a cost. As of late June, Motorola stock was down by about 20 percent since its high at the end of 2005, mostly due to concerns about the cost of marketing and developing new products.

So what's the Web approach: a broad sweep, a more targeted effort, or a blend of both?

"Eventually what is best gets sorted out. All the fundamentals point towards a more cohesive market," says John Cate, vice president, national media director at Carat Fusion, a San Francisco-based media interactive media company. "But until then, it's all about experimenting."