This weekend I revisited one of the local mega-electronics retailers to check out how Tablet PCs are selling. It sounds like things are looking up. On display was the Toshiba M205. Fortunately, it was shown using the new shelf fixture. At least now the customer can swivel the Tablet around and fold down the screen. Of course, with no pen–as was the case here–it’s not going to be that exciting of a demo. It doesn’t matter anyway though, because there’s a Flash demo running on the screen talking about the various features of the Tablet and it wasn’t obvious that it would be OK to write on the screen anyway. Further, it warned the user to not rotate the display either while the demo was running.
One of the store reps came over and I chatted with him for awhile to see how Tablets were selling. He was quite happy. He said he’d sold three since the short time he’d been there. He didn’t say how long that’d been, but I gathered it was a matter of months.
He lamented that the pen was long gone, but it didn’t matter. Tablets, he explained, sell themselves. What he’s found is that as opposed to the other computers in the store, people who purchase the Tablet already know that’s what they want. There’s no qualifying. He figures that it’s because of the price. You see, after $2400 for the Tablet and then a $500 warranty contract (yep, this is the profit, thank you), taxes, and miscellaneous items, the average out the door price is $3600. My jaw dropped. I hadn’t quite thought of it that way, but I could see his point.
I was beginning to see why he was so pleased with Tablets sales: He doesn’t have to do much to sell them and he makes a good commission with the contract and other items.
I asked about sales training. He chuckled. There isn’t. The managers might get some, but no one else does. That makes sense considering how much turnover there must be of the floor personnel. He learns on his own or from the others.
I asked what he thought of the Tablets. He didn’t care one way or the other. He was tired of Microsoft. He proudly proclaimed that his next computer is going to be an Apple. Why I questioned? He didn’t have much of an answer–or at least I missed it–but essentially he was seeing the grass to be greener on the other side of the corporate wall.
After chatting for 15 minutes or so I thanked him for his time and shuffled down the aisle replaying his comments in my head. My number one take-away: Tablets sell themselves. To him, anyway, there is no selling of Tablets. What he is selling are the add-ons. I couldn’t disagree with him more, but I bet this is a common way of thinking at chains like this. Retail sales figures were beginning to make a lot more sense to me.
What I’ve found is that many people enjoy being shown the Tablet. Many haven’t heard about it. Many people don’t know the different ways it can be used. And interestingly, those that have heard about Tablets are rather down on the recognition or the price or some other feature. Often these people aren’t the ones that were going to purchase a Tablet anyway, and they are forthrightly defending their territory explaining why they haven’t. Many times though they will throw something on the table, like they’ll buy one when they’re cheaper or the recognition is better. But that the time isn’t right yet.
And, of course, many people enjoy playing with a Tablet for the first time–especially when there are installed apps that showcase how to use the Tablet and give them positive reinforcement. Lora uses MathPractice, for instance. When shown an addition problem, just about everyone knows what to do…well, not quite. Usually people have to be encouraged to write on the screen. You have to tell them, “Go ahead, it’s alright. Write your answer on the screen.” Once people see their handwriting recognized and the little smiley face appear on the screen, they mirror the smile. There’s also something quite exhilarating about being handed a Tablet and holding and using it for the first time while you’re standing up. It really gets the point across that this isn’t just any computer.
So as I made my way through the inventory control doors of the super store I wondered, what would happen if Lora, myself, Linda, Peter, Spencer, Rob, Fritz and a handful of other Tablet enthusiasts were let loose for one week in stores like this. What if we were wondering around the isles with our Tablets in hand sharing what we were doing with those interested? Would the instore sales be any different? Or is the salesperson I talked with correct, that it wouldn’t make much difference because Tablets sell themselves? Actually, he’s probably right. The sales probably wouldn’t change, but the exposure would–albeit minutely. Hmm. There are probably better places to spread the word that a local electronics retailer, but it’s interesting to think about.
I see where you are going, but that title-heading is quite misleading. They sell themsevles? Only to an already-knowledgeable VERY select (and rich) audience. This is a product, that no amount of showing off or Flash demoing will ever hook. People have to USE it, to experience it, only then does it makes sense, but even at that, the price-points are way out of line per that market segment. And those extra warranty contracts are scams.
No store clerk training, No pen, just a generic Flash demo loop, and that’s assuming it’s even on, as most times, they have been off, and even the newer M205’s have literally had a thin-dust layer on the screen. The Tablets just look pale in comparison to the searchlight-bright 15-inch screen notebooks nearby, with the notebooks retailing for nearly half the cost. And then, to make matters worse, the Toshiba warns you not to flip the Tablet PC into Tablet mode, while the generic Flash demo is running. What a sad sad sad way to demo. Where are all these supposed Retail stands? Rarer than a blue-moon seemingly. Bottom line: 99.95% of people who had no prior knowledge, won’t ever. Sell themselves? Not even close.
Would higher awareness increase product sales? Of course, maybe not in huge numbers right away, but any such increase is only common sense. If greater awareness doesn’t increase sales, then the whole of Madison Ave. is down the drain.
Retail markets will take a longer time, but just because retail is flatlined, that doesn’t nullify End Users as a market. A poor retail showing for an emerging non-commodity product, doesn’t mean that the market is only Vertical. I know that’s the line of thinking and justificational thought-processes, that go on. But, at least in this case, such ideas couldn’t be more wrong. The idea that Tablets are not for Consumers is a myth. Consumers just need to be shown the way in greater numbers. They have to use one. When Dell gets in, something like the Dell (play with, use it) kiosks will help. Consumers will feed into Corporates, Corporates will feed back out, creating a mass-market demand, that will eventually see it commoditized, with a greater showing in retail and overstock Superstores.
You caught me. The title doesn’t reflect what I think either, but instead I mention it as the realization of how the mega-retail stores are selling Tablets. This may help to explain the lackluster sales. The question is: For them, is the right economic incentive there to encourage them to sell Tablets?
Let’s say a customer walks in and is willing to spend about $2000 for a notebook. If you had the choice between selling a Tablet for $2000 and a standard notebook for $1600 plus a $400 service contract–totaling the same magic $2000, which one would you direct the customer to? The latter, I bet. Why? Because the service contract is where the profit and commission are.
What I was realizing is that in many respects the Tablet is competing in these retail stores not just against other notebooks, but against higher-profit add-ons combined with less expensive notebooks.
I agree with Loren’s point that large retailers expect the Tablet PCs to sell themselves. This has been a requirement of large retailers for years and will never change.
This “fact” is why Intel and AMD spent millions building their retailing programs – programs designed for the largest segment of the market – the 2-3 person retailer. I’m amazed how easily trapped some people are with the expectation that Tablet PC sales will go up if the focus is placed on these large retailers.
After all, the large guys just follow while the smaller shops lead. The smaller shops take chances on newer product. This reality has not changed over the past twenty years. Maybe this comes from the myth that there is power in one person or business over the power of millions.
I dunno but I expect sales to suffer as long as the same methods used over the past two years are used over and over again. It’s like doing something over and over again the same way, getting the same results, and then wondering why nothing changes. Isn’t that called “insanity”?
Loren, you are right in that most of the current buyers spend time discovering information before the sale. Layne’s description of retail versus other resellers, VARs, and consultants is spot on too.
What would happen if a dynamic group works together? Yes, there would be an impact. But I don’t think that impact is specific to a retail venue. We’ve already seen it in action at industry events.