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Want to boost Premium TV sales? Take a page from the Smartphone Industry

Every time I wander through the TV section across various retailers; a similar thought surfaces –

Whilst TV technology has certainly come a long way from my grandmother’s B&W 14″ CRT… it’s overall value proposition; particularly the purchase & ownership experience hasn’t seemed to change all that much!

Surely the rapid commoditization of the broader Home Appliance & Consumer Electronics category causing them to largely be perceived as a ‘volume game’; often even dampening the effects of certain premium models

Closer examination of key sales events (Cyber Monday, Black Friday, etc.) reveals bulk of the offers skewed towards either Low-Mid range models (Tier 1 brands – LG, Samsung, Sony) OR endless models from Tier 2 (& below) / White-label brands

Which may explain…

…a recent analysis from IHS showed shipments of consumer TVs in North America alone registering a decline of 0.9% (~43M units) in 2015 and an expected drop by another 2.2% by EOY’16

Even profit margins are at risk of being affected due to various contributing reasons from over-supply of LCD panels through continuous deep discounting to increasing competition from white-label / Tier 2 & below brands and even the rise of small screens (Smartphones, Tablets, VR)

TV as a segment itself faces threats on multiple fronts today… it may still be the centerpiece of a living room; but is no longer the center of consumer’s attention – which has been diverted towards other smaller screens (smartphones, tablets, hybrids & increasingly – VR)

So… when it particularly comes to Premium / Flagship TV models; could the value-chain players be missing out on untapped growth, profitability & customer experience opportunities?


3 Challenges facing the traditional value-proposition

Overall TV purchase experience hasn’t changed much over the years… entailing:

Consumers walk into the nearest retailer / clicking online view in-store demo (model comparison) select the right TV(s) haggle / price match (if applicable) pay by cash/credit card/ 3rd party finance  maybe choose an extended warranty disappear into the sunset (for the next 5 – 8 years or until the TV breaks down beyond repair or an un-passable offer in a future ad-circular takes hold over the senses)

Though this process may have worked well for the volume-centric TV category; there are 3 notable challenges for value-chain players… namely –

Connected Corners

So the big question is how could TV value-chain players ensure loyalty, (predictable) repeat purchase & enhanced consumer experience in a segment that seems to predominantly be driven by price?


Step 1: Borrow a page out of the smartphone book

Modern TVs & smartphones share similarities in more ways than one –

Connected Corners

BuyBack/Trade-In & Upgrade programs have brought about major tectonic shift by allowing a wider consumer base access to premium smartphone models (such as the iPhone) and has benefited it’s value chain players such as Wireless & OEMs along the way (think: subsidy savings, subscriber growth / retention & CLV / ARPU metrics)

The TV category could borrow a leaf from the smartphone book in designing it’s Cohesive Proposition for Premium / Flagship models ground up


Step 2: Concept of Cohesive Proposition & Customer Experience (Purchase & Ownership)

As an alternative to traditional one-time sale of a Premium / Flagship TV; whose high price alone deters most consumers; value-players could re-imagine offering them within a single cohesive proposition

This single cohesive proposition could be designed & priced to include 4 key elements of the purchase & ownership experience – Finance & Leasing, Service & Support, Content Bundles and Buyback/Trade-In/Upgrade program

TV manufacturers have an apt opportunity to re-imagine the cohesive value proposition and CX (Purchase & Ownership experience) for select Premium / Flagship TV SKUs in an era of cord-never, multi-screen proliferation & (perceived) macro economic environment

Connected Corners

Key Benefits

– Benefits of a single cohesive proposition could be as far reaching as production optimization through to inventory control, range rationalization & even supply chain; but it’s most immediate impacts are –

– Purchase experience could be enhanced through provisioning of Leasing, Finance programs; ensuring easier access to the latest premium / flagship models to a broader group of consumer

– Ownership experience could be enhanced through the inclusion of Service & Support including integrating the optional extended warranty through the life of the product’s financial contract

– Integrating (desired) content subscription though B2B partnerships should reduce the value-chain players’ dependence on hardware revenue alone taking it closer to a subscription based model; potentially providing a tool for perpetual revenue for it’s value-chain players

– Integrating a robust Trade-in & Upgrade program component not only ensures reduction in e-Waste but also provides a platform for encouraging repeat purchase & ergo brand retention of customers

Risks & Limitations

As with any initiative, there are always risks & limitations which would vary based on several factors; some of them could be –

– Could all TV models from all brands be offered in this manner? Most likely NOT as metrics such as financial goals, geographical footprint, risk appetite & growth targets would vary considerably by each individual value-chain player

– Limited to Credit-Prime customer base – One of the critical components of the End-2-End solution entails offering finance / lease agreements; which in-turn would be limited to the credit-prime customer base and / or the issuer’s risk appetite

– Higher reliance on hardware innovation – There is a risk that customers may refrain from upgrading to the next TV model should they ‘perceive it’s hardware innovation as meh’ thereby interrupting the perpetuity in hardware revenue cycle (until the next ‘WOW’ model comes along)Although this risk may be mitigated through various measures such as a surgical personalized offer

– Ultimately; re-imagining a cohesive value proposition ground up would not only make Premium / Flagship TVs more accessible to a wider group of consumers but also ensure a degree of revenue perpetuity as well as an enhanced purchase & ownership experience that could in turn could lead to higher brand-retention

The above is a broad concept and needless to say each individual offers would depend on the value-player, their individual needs & a deeper financial analysis

Although this article focuses on re-imagining the overall proposition for the TV segment, it’s concept(s) could very well be ported over to the broader high-priced consumer electronics & white goods segments as well