J&R in the News
- Accessory Issue 2007
Small Products = Big Sales
By Audrey Gray
While much has been made of bundling gear and displaying accessories alongside core products, industry players say the retail houses that move the most peripheral products these days are the ones that do it the old-fashioned way: charming customers into those add-ons located throughout the store and at the counter. As Rachelle Friedman, owner of J&R MUSIC and Computer World in New York City, said, "You keep it close to a salesman so he can take it right off the peg and say, ‘You’re gonna need this.’"
Fine salesmanship—that profitable cocktail of flirtation, persuasive psychology, trust and knowledge—has been overshadowed in recent years by the Internet-educated customer and hot CE products that, in many cases, sold themselves. But in an age when those traffic-driving hot products have the lowest profit margins in the store, CE retail managers across the country are looking to their sales staff to push the one category that consistently keeps retailers in the black: accessories.
...
According to the NPD group, CE accessories (apart from most batteries) were a $5 billion business in the U.S. last year, with MP3 player accoutrements accounting for $1.3 billion of that figure. Cabling, including USB, HDMI, networking and audio chords, were another huge component at $1.2 billion, and sales of digital camera enhancement products, including bags, lenses, filters and tripods, were also strong at $750 million. Headphones, cell phone accessories and web cams were also top-sellers.
According to the Consumer Electronics Association’s “The CE Accessories Market: Insights and Opportunities,” accessory shipments were expected to grow 11 percent this year over last year. It also noted that from 2003 to 2007, accessory shipments have grown 43 percent in the U.S., not including PC or video game accessories, which was attributed to “CE market growth, new product introductions, changes in consumer behavior” and “changes to retail channels and how accessories are sold.”
That last driving factor is multidimensional because retailers have actually made many innovative changes in the way they push accessories. Perspectives on Accessories
At J&R, Friedman tried something completely new in her direct mail campaigns last year. The company, which typically sends over 10 million pieces of mail a year, created a separate catalog just for iPod accessories, a highly successful effort that Friedman said contributed to J&R’s over $345 million in total sales in 2006.
"We’ve always believed in the long tail theory of retailing," said Friedman, referring to journalist Chris Anderson’s 2004 book, "The Long Tail: Why the Future of Business is Selling Less of More." "We’ve always felt you had to have a very in-depth inventory. When we pick a line, we don’t cherry-pick, we carry every single product...over 600 earbud SKUs! When we merchandise in our catalog and on the Web, we try to put in accessories that people didn’t even know existed."
...
Sales Skill Is Key
Of course, there are many ways to sell all those cables and other accessories. But, despite all of the education consumers claim they get from the Internet, eye-catching POS displays, merchandising techniques and other strategies, the final sale still comes down to the presentation and other skills of a good salesperson.
...
When the CES market research team surveyed U.S. consumers last December about the motives behind their latest accessory purchases, it found that the greatest percentage was buying for the purpose of "enhancing the functionality or performance" of a core device. Enhancement ranked higher than listening, connecting, powering or protecting.
J&R’s Friedman said that the best sales pitches get very practical with lifestyle-enhancement ideas. "People don’t realize they can do so much with their iPod. Two people can listen at the same time! You have to tell them the advantage of each accessory," she said. "Some do change your life."
While much has been made of bundling gear and displaying accessories alongside core products, industry players say the retail houses that move the most peripheral products these days are the ones that do it the old-fashioned way: charming customers into those add-ons located throughout the store and at the counter. As Rachelle Friedman, owner of J&R MUSIC and Computer World in New York City, said, "You keep it close to a salesman so he can take it right off the peg and say, ‘You’re gonna need this.’"
Fine salesmanship—that profitable cocktail of flirtation, persuasive psychology, trust and knowledge—has been overshadowed in recent years by the Internet-educated customer and hot CE products that, in many cases, sold themselves. But in an age when those traffic-driving hot products have the lowest profit margins in the store, CE retail managers across the country are looking to their sales staff to push the one category that consistently keeps retailers in the black: accessories.
...
According to the NPD group, CE accessories (apart from most batteries) were a $5 billion business in the U.S. last year, with MP3 player accoutrements accounting for $1.3 billion of that figure. Cabling, including USB, HDMI, networking and audio chords, were another huge component at $1.2 billion, and sales of digital camera enhancement products, including bags, lenses, filters and tripods, were also strong at $750 million. Headphones, cell phone accessories and web cams were also top-sellers.
According to the Consumer Electronics Association’s “The CE Accessories Market: Insights and Opportunities,” accessory shipments were expected to grow 11 percent this year over last year. It also noted that from 2003 to 2007, accessory shipments have grown 43 percent in the U.S., not including PC or video game accessories, which was attributed to “CE market growth, new product introductions, changes in consumer behavior” and “changes to retail channels and how accessories are sold.”
That last driving factor is multidimensional because retailers have actually made many innovative changes in the way they push accessories. Perspectives on Accessories
At J&R, Friedman tried something completely new in her direct mail campaigns last year. The company, which typically sends over 10 million pieces of mail a year, created a separate catalog just for iPod accessories, a highly successful effort that Friedman said contributed to J&R’s over $345 million in total sales in 2006.
"We’ve always believed in the long tail theory of retailing," said Friedman, referring to journalist Chris Anderson’s 2004 book, "The Long Tail: Why the Future of Business is Selling Less of More." "We’ve always felt you had to have a very in-depth inventory. When we pick a line, we don’t cherry-pick, we carry every single product...over 600 earbud SKUs! When we merchandise in our catalog and on the Web, we try to put in accessories that people didn’t even know existed."
...
Sales Skill Is Key
Of course, there are many ways to sell all those cables and other accessories. But, despite all of the education consumers claim they get from the Internet, eye-catching POS displays, merchandising techniques and other strategies, the final sale still comes down to the presentation and other skills of a good salesperson.
...
When the CES market research team surveyed U.S. consumers last December about the motives behind their latest accessory purchases, it found that the greatest percentage was buying for the purpose of "enhancing the functionality or performance" of a core device. Enhancement ranked higher than listening, connecting, powering or protecting.
J&R’s Friedman said that the best sales pitches get very practical with lifestyle-enhancement ideas. "People don’t realize they can do so much with their iPod. Two people can listen at the same time! You have to tell them the advantage of each accessory," she said. "Some do change your life."
