Saturday, October 3, 2009

Microvision: What’s Your Mass Consumer Product Strategy?

Finally, on September 30th, Microvision announced its first purchase order and shipment of its long waited PicoP projector… a consumer product named SHOWwx.

Late by a few months from the original─ self-imposed─ launch schedule, the final consumer product, all wrapped and tied, left the loading dock destined for the far away lands of Asia… the home of Microvision’s first Asian Marketing and Distribution partner.

Interestingly, some of you may have caught another tit bit of news from the October 2nd blog post, by Matt Nichols of Microvision, at the company’s official blog site The Displayland.

Yes, Virginia we have some European distribution also coming on board shortly…

Here’s what Matt Nichols said…

“This is what I can tell you. Our very first shipments have already gone to Asia, as we are currently focused on fulfilling the first orders and shipments through our recently announced Asian distribution partner. We’ve also announced that we’ve signed marketing & distribution agreements in Europe. We can’t tell you the specific details yet as our partners first want to manage their product launch communication plans. When the details do become public, if you live in the geographic areas that the first shipments are available you might be able to scoop up some… “

Here’s the link for those interested in reading the full post…
[The one you want is titled… “Launch, ship…and ‘when can I get a SHOWwx?]

In summary, the purchase orders are in and the product is finally going out to land in the hands of consumers. And that raises the next question in our minds… the stakeholders [investors, partners, and consumers] of Microvision.

Microvision: What’s Your Consumer Product Strategy?

I’m sure Microvision has one in place and there is ample evidence of how well it has worked so far. The term “Consumer Product Strategy” may mean different things to each one of us and may even depend on who “devised” it who will “manage” it.  What’s important to the stakeholders, however, is what it means to the creator and the implementer… Microvision?

So, why not we just ask them in a polite and consultative manner?

We will just do that, and here we go…


Consumer Electronics (CE) companies in the US last year lost $14 billion in re-box, re-stock and re-sell the returned items eroding the industries ability to attract and the retain loyal customers. Quite a high price to pay… for a problem that has a solution.

In May 2008, The Wall Street Journal reported that 11%-20% of all electronics goods were returned. The top reason…

The products “didn’t meet expectations.”

This becomes especially distressing given the current decrease in spending on consumer electronics. Data from MasterCard Advisor’s retail service showed holiday sales for this sector plummeted 26% from 2007. To survive the market shifts long-term, CE companies like Microvision need to view this extraordinarily challenging period as an opportunity to innovate, to fix what is already considered broken, and revamp their business strategies… specially for introducing mass consumer products on a global basis. It’ll take a lot more than blanketing the media with clever ads.

In all probability, Microvision has a great mass consumer product marketing strategy… and is doing all the right things. However, as Microvision is not in the market with any of its PicoP products, it is not easy to gauge its mass consumer product strategy. Since the paint is still not dry, here are four recommendations to consider…

Know your customer in product design:
The problem at the heart of the industry today is that most CE companies still design for their original, early adopter geek audience. Tech geeks drove the development of the CE industry when it was new and there was a steep adoption curve. But, now that grade school students and hockey moms carry iPhones, consult their GPS for driving directions, and bank online, Microvision needs to do more than rely on consumer curiosity to stay alive. The digital lifestyle is no longer one-size-fits-all, and today’s impatient and fickle mass consumer expects more than the complicated, unsatisfying out-of-the box experiences that have become an industry norm lately.

Create a 360-degree experience for the consumer:
Your PicoP display brands [SHOWwx or embedded] need to match the right product to the right consumers and then connect with them meaningfully at every point of contact. The “360-degree experience” includes everything from packaging, design, and marketing, distribution to after-market support… including programs to help customers discover product benefits, end-of life recycling programs, and user support executed with the care of a concierge service, rather than with the complication and delay of an overwrought bureaucracy.

I wish there was another example besides Apple to demonstrate a successful 360-degree experience, but Apple nails it every time. They do not try to be everything to everybody. Packaging is elegant. The product is beautifully designed. Set-up is simple. Support is available… with room for some improvement here. Messaging is consistent and clear at every touch point.

Pick the right distribution channel:
Market research has revealed that consumers are overwhelmed and confused at retail stores like Circuit City… no doubt a contributing factor in its recent bankruptcy filing. People they tracked on “shop-along” research trips found it impossible to discern the meaningful difference between, say, a $40 mouse and a $70 one, let alone penetrate the chaos that is the flat-screen TV section. Navigating the many dozens of options marketed with buzzwords like “plasma,” “digital,” or “720p LCD” was daunting, and many potential customers left the store without making a purchase. So the industry can add “loss of sale” to their return losses as well.

Research shows that shoppers frequently visit manufacturer Web sites for information… but rarely make the purchase decision based solely on that information. They used third party sources such as CNET, customer reviews on Amazon or the advice of their peers before making the buying decision. It’s no surprise, then, that there is little-to-no brand loyalty. Except, of course, for Apple who has succeeded in translating geek-speak, like “120GB,” to terms anyone can understand, like “30,000 songs.” The CE industry needs to stop talking tech-speak and start speaking in terms that mean something to the rest of us consumers.

If Microvision is marketing the PicoP display engine to OEMs, its distribution channel choice is obviously the partnered OEMs. However, if Microvision is also considering the introduction of a Stand Alone accessory PicoP projector [SHOWwx] on its own, it needs to seriously evaluate its choice for distribution channel(s) selected… for the consumer product for the mass market. Each distribution channel has its unique pros and cons and requires an extensive study that is beyond the scope of this post. However, the most important features involve the optimization of the following desirables…

• Cash flow and margins… credit card sales from company [and affiliate] web sites provides advance cash payment [and better margins] as against 30-day delayed accounts receivables from distributors and retailers. As an Amazon drop-ship retailer the company can have the best of all scenarios…
• on-line retailing power and credibility of Amazon
• customer reviews on Amazon
• better margins for the company
• advanced credit card payment to the company
• control over customer service and support
• and consistent and clear messaging to the mass consumers.

• Push marketing… company [and affiliate] web sites─ coupled with e-mail campaigning─ is much more effective in the introductory phase push marketing than distributors and retailers. However, the distributors and retailers do give you the benefit of “baptized” by quick “immersion” effect.

• Pull marketing… third party review sources [like CNET] and retailers [like Amazon] are much more effective in advance stage pull marketing than distributors and retailers.

• Customer support & service… distributors [like Ingram Micro] and retailers [like Circuit City] are not really known for the type of customer service and support that is conducive to customer loyalty or customer satisfaction. RMAs, re-stocking and re-selling is an expensive process due to mishandling and neglect.

• Consistent and clear messaging… company web site(s), company direct marketing, affiliate web sites and retailer Amazon web site allow the company better control over consistent and clear messaging to the mass consumers.

Tell Your Customer the Truth:
If your products do make it to the customer home, many don’t make it past the out-of-box experience. Not everyone is an early adopter with an appetite (or tolerance) for splashing around a sea of tech-speak to deal with hours-long product set-up guided by confounding directions, little-to-no customer support, and lots and lots of wires.

The Magellan GPS navigation system, for example, begins with a jumble of parts. Setup requires about half a day. Mac users learn late in the process that setup requires a PC. Meanwhile, the “Roomba” robot cleaner packaging promises it will “clean routinely so you don’t have to.” The Roomba itself, however, requires cleaning and maintenance after each use, making it more suitable for the gadget freaks who love to endlessly tweak their technology than the suburban housewife to whom it is marketed, who’s looking for hassle-free cleaning convenience.

"You must clearly communicate what your products do, what they are all about and who they are intended for."
Well, that’s all she wrote today.

I’ll get back to you as soon as I realize that you are still awake or I have missed any more pointers.

Anant Goel