More complex product variations give way to personalisation and lifestyle marketing
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Transforming go-to-market models in channel environments
In the last decade the electronics industry has changed dramatically to increase functionality and product introductions, and reduce costs and time to market. But is it more vulnerable?
Globalisation has helped to lower manufacturing costs, but with increased competition in eastern Europe, Latin America, mainland China, Taiwan, and other Asia Pacific nations.
On the consumer side, increased connectivity has created a smarter, more informed customer with access to product information and price comparisons at their fingertips. Product marketing has given way to lifecycle marketing, increasing product complexity, functionality, and the number of variants to create more personalised product versions. Complexities also stem from product bundling and co-branding, such as hardware and services with content, or sports gear with electronics.
This has resulted in dramatically shorter product lifecycles (e.g. From 1 year to 3-6 months) and price erosion (7% per year), requiring new and different processes, systems, and change management capabilities. For example, every six months 30% of the average consumer electronics product portfolio is replaced, so flexibility is mandatory to continually change production.
Lastly, shorter innovation cycles are being driven by the reduction in product lifecycles and increasing new product launches. Thus, R&D is more critical than ever and must work at an accelerated pace. Profit depends on the speed of innovation, with early high volume product availability and no inventory at the end of life.
To help our clients keep up the pace, Capgemini helps some of the largest consumer electronics companies in the world maximize their Product Lifecycle Management. We work with 8 out of 10 of the top consumer electronics organisations with our suite of solutions geared toward developing successful strategies, optimising operations, and growing revenue.