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Electronics | Home Appliances

Electronics | Home Appliances

Living in an urban city, electronic devices like smartphones and laptops or home appliances like microwaves and refrigerators have become nearly indispensable. Of course, the need varies from person to person. For a working consumer, a television may not be a necessity but having a functioning mobile phone could be essential for personal and work-related communication. For a consumer household, a microwave may not be a necessity but a refrigerator surely is. And with progress and development in life, the requirements of consumers also tend to move up. A smaller television will be replaced with a bigger one. A budget smartphone will be replaced by one with more features and better specifications. Consumers do start with basic products and then their requirements keep escalating. What do all these mean in the macro perspective or at the industry level?

In any given geography or market, with increasing population and other favourable demographic trends, the demand for electronic devices and home appliances witnesses growth. Consumers move to previously unused categories of products. Being in the field of electronics business consulting, we have consistently witnessed that customers move to better quality and expensive products. Existing customers move to better quality and expensive products. Over time, there is a multi-dimensional development in the demand for electronics and home appliances among consumers.

Given the demand characteristics of the industry, it might appear rosy to start a business dealing with electronics and home appliances or set up an online electronic store or even open a chain of electronic stores. But it is the same lucrativeness that makes this industry a competitive one. A significant amount of investments have to be made in real estate and inventory. These and a few other prominent challenges are elaborated below.

Challenging areas in retail consumer electronics and home appliances

Distinguishability

With product homogeneity, it is difficult to create differentiation in the retail business of electronics and home appliances. The same is true for service-based businesses. The electrical retail shop consulting experts know that distinguishability is a tough goal to achieve. Retailers get healthy margins but attracting footfall and having sales conversions is the difficult part. Having a store in a prime location is an advantage but that comes with heavy rentals and security deposits. Adding glitter to the store further raises the operating expenditure along with some long-term investments. Being an exclusive brand outlet helps to some extent but it stifles margins and retailers have to walk on company-defined lines. In advertising and promotional campaigns, whether online or offline, retail businesses often miss out on generating the right traction with their audience.

Product Redundancy, Merchandising decisions

With technological advances, electronic and electrical products become outdated. This is particularly true for electronics. Take, for example, smartphones. New phone models are being launched every month by every manufacturer. The changes could be little but it wins the war of perception. Retailers cannot afford to invest heavily in a few models at any one point in time. The next big thing is always due. This applies to other electronic products as well like smart wearables, laptops, headphones, memory cards, etc. In the case of electrical home appliances, the speed of innovation is relatively stable. For instance, refrigerators or televisions do not undergo major changes in the short run. But these products are also expensive and bulky.

For both consumer electronics and home appliances, retailers have to carefully devise where to invest and how much to invest in each product category. For online retailers, any change in product availability should be timely reflected in the product pages. This has to be done keeping in mind their budget, space availability, sales forecasts, and other relevant aspects like profitability and ROI.

Competition

For decades, traditional brick and mortar retailers had enjoyed a privileged position in the home appliances market. These are mostly family-run businesses spanning across generations. And even today, these businesses hold a strong position in their respective local and regional markets. In the last three decades, rapid technological advancements and innovation played a big role in bringing electronics closer to consumers. The growth of IT education and jobs sprung up the market of IT products like computers and related accessories. Very few retailers with know-how or awareness of these technological developments could quickly encapsulate this emerging market opportunity. ECommerce was the next big disrupting force.

Today, the competition in the consumer electronics and home appliances market has turned cross channel. Leading offline retailers are now losing their market share to retailers in online marketplaces. Companies could not care much about whether the sales are taking place via online marketplaces or an offline retailer.

For online retailers, the challenges are not that different from what traditional retailers face – generating traffic and sales conversion. With offline retailers raising their game with efforts of closer coordination with manufacturers and better services, for many online retailers, it is turning out to be a challenging situation. Despite the leverage provided by eCommerce, running an online business of home appliances or consumer electronics is not easy.

Significant competition for both online and offline retailers come from franchise and speciality stores (online and offline). Customers tend to prefer company-owned or operated stores (franchise, partners) over independent electronics retailers or department stores that sell electronic products and home appliances.

We address these concerns via detailed analyses and competitive business modelling in our electrical retail shop consulting services.

Post-Sales Services

Poor post-sales services are a major source of disappointment for customers. There has been a paradigm shift among retailers in this area. But its implementation remains a challenge. Many retailers turn away customers to the service centres of the concerned companies. From product replacement to periodical servicing, customers often have to wait for days and weeks to get their job done. Unfortunately, instances of unethical business practices in service processes are also rampant. When a product could be serviced with a small change, many customers complain of unnecessary part replacements and servicing activities leading to fatter bills. Poor post-sales service also indirectly affects the reputation of retailers because they constitute a part of the customer experience journey.

Managing Franchise

Franchising is a commonly adopted route for business expansion. This is especially applicable to businesses with an open chain of electronic stores. Not just the big brands but even independent retail businesses dealing with consumer electronics and home appliances of multiple brands go for franchising to achieve local and regional expansion. Business sense says that the scope of rules and functioning of a franchise arrangement must be planned and implemented with utmost accuracy and with no room for ambiguities. But that is not always the case. Even the big brands miss out on planning and operational detailing. The result is operational chaos or worse, termination of the franchise emanating from disputes. The most common reasons for franchise failures are lack of adequate marketing assessments, poor planning and strategies, and weak operations.

Operational Planning

For a retail consumer electronics and home appliance business, operational planning encompasses a wide range of activities. In small businesses, the business processes often overlap and there need not be separate functional departments. They operate with small teams among whom the functional responsibilities are divided. But even in small and medium businesses, a clear-cut distinction between different business processes and operations is necessary. There should be no ambiguity about the flow of work or any operational activity. The scope of duties and responsibilities of each position must be clearly defined. This necessitates the need for electronic store SOPs for businesses in this sector.

Why YRC?

We are a boutique retail and eCommerce consulting firm with a developing international presence. Since 2012, we have consulted over 500 clients in more than 20 verticals including retail consumer electronics and home appliances industry. Our services are designed keeping in mind the evolving challenges of the industry and the unique business requirements of each client. We engage professional and expert retail and eCommerce business consultants in our projects.

We help clients gain meaningful insights and understanding of the target market. Our market research covers an in-depth analysis of the target market and recommendations & CTAs to aid in business planning and formulation of marketing strategies. As electronics business consultants, we always stress upon the need to conduct thorough and comprehensive market research.

In electronics business consulting for retail and eCommerce enterprises, we assist clients in developing competitive business models in an omnichannel environment. We aim to help our clients gain a strong and sustainable brand positioning in the market based on unique value propositions.

In business plan development, YRC’s team of electronics business consultants prepares the required financial and commercial projections and assessments working in close coordination with clients. Our reports help clients envision the short and long term financial implications of the intended business projects and decisions.

Our omnichannel strategy consulting services help clients take their business online or embrace eCommerce in ways and manners that are best suited for their business. We cover eCommerce strategy formulation, digital marketing, CX consulting, multichannel and omnichannel retailing, digital analytics, and more.

SOP design and development is one of our flagship services. We define the SOPs for retail business or electronic store SOPs. On the surface, we aim at streamlining clients’ business processes and operations. But our eventual goal with electronic store SOPs is to help clients become process-oriented enterprises and remain scalable.

To know more about our business consulting services for retail consumer electronics and home appliance business, or if you have any specific queries for our retail and omnichannel business consultants, please visit our website.

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We work only for Visionaries.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.