The consumer electronics category has proven itself a winner-takes-all market. Five years ago, Apple and Samsung accounted for 21% of consumer electronic sales by volume. Today, that number has jumped to 35%. Smartphones – now experiencing 195 minutes of usage daily – have succeeded in inspiring exceptional brand loyalty on par with Personal Care brands. Close to a third of smartphone users own or buy devices from the same manufacturer, and Internet of Things will only intensify that brand loyalty. Wearables, connected home devices, and connected cars will be compatible with the phone, encouraging consumers to buy additional items from their smartphone brand.
As of now, Apple and Samsung have the lead in brand loyalty. Both have positioned themselves as leaders in smartphones, which consumers have a strong emotional connection to. Apple is ahead of Samsung as of now: The iPhone generates 10 times the profit of Samsung’s smartphone sales, with users that are more loyal. Eighty-three percent of iPhone owners plan to stay with Apple as opposed to just 64% of Samsung brands.
Yet savvy brands are catching on, and making investments to inspire brand recognition and loyal customers. A promising 47% of brands in L2’s Digital IQ Index: Consumer Electronics study have made devices compatible with Google and Apple’s operating systems, hoping to create brand loyalty that hinges on the consumer’s smartphone choice. (That is a smart strategy, since it is most likely too late for any brand to build its independent Internet of Things ecosystem.)
Brand experiences are another way to generate loyalty among buyers. Samsung, Apple, Sony, Microsoft, and Intel have started to operate a brand store within Best Buy locations in order to directly control consumer experiences. On digital channels, brands are persuading consumers with content. Eighty-one percent of brands in the Index have invested in video and 41% of their sites have shoppable blogs. Examples of blogs include Samsung’s “Tech Life: Ideas & Inspiration”, which is a microsite with content ranging from organization tips to app features. And Bose, which has seamlessly integrated a buy button into its blog content.
User-generated content – employed by just 27% of Index brands – is another way to foster loyalty. Whirlpool has been exemplary in this regard. Looking to transform its identity among consumers from metal to family care, the brand solicited pictures and videos from users demonstrating how Whirlpool appliances affect their lives. One user submitted a story about her grandmother’s dementia diagnosis, which was turned into a 60-second ad and fueled the direction of brand’s “Every Day Cares” campaign. The campaign resulted in an impressive 10-point uptick in purchase intent.
The emphasis on brand building has taken a surprising direction, with unlikely contenders using creativity to drive repeat purchases. Memory cards, for example, have attempted to differentiate themselves through social media using a variety of posts (product callouts, how-to’s, customer service, professional reviews). Brands such as Seagate post non-promotional and informative posts on a range of topics from company use to articles on technology news (e.g. drones and internet usage). This holistic approach has paid off for memory card brands, who receive three times the average interaction per post on Facebook.
Seagate and Whirlpool’s success shows even the most seemingly boring brands can find content that engages users.
For more on the digital performance of 58 Consumer Electronic brands in the U.S., download a copy of L2’s First Digital IQ Index: Consumer Electronics.
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