Are you being served

Jason Kemp, head of marketing at Data Select

John Doughty, general manager of Micro P’s mobile division

Andy Tow, managing director at Avenir Telecom

The total mobile accessory market grew by 12% in December 2009 year on year, according to Gfk, defying the tough economic climate of last year. This year, people have been more than happy to dip back into their pockets to buy the all-important must-have of 2010, the smartphone, and with that purchase comes a gamut of accessories… Heather McLean investigates.

Accessory sales are driven by the handset market, remarks Jason Kemp, head of marketing at Data Select. He adds it is no surprise that the increase in smartphone sales has in turn driven the accessory market. “With the cost of smartphones, consumers also want to take care of their asset, as depending on their contract it may have to last two years, so this also has a bearing on the type of accessory sales we are seeing.”

Data Select says cases for BlackBerry, HTC and iPhone are all selling well because of the cost of the devices from these brands. Kemp notes: “Customers want quality, genuine products to enhance their phone and not just a cheap sock or similar! Because smartphones are famous for sapping battery life, mains and car chargers for these products are also popular, but here the brand isn’t so important; the accessory just has to be functional.”

Hot trends

Hot trends and growing opportunities in accessories are on the rise, states John Doughty, general manager of Micro P’s mobile division: “Accessories that tend to spring to mind are Bluetooth headsets, carry cases, cables, and chargers, which are all good attach sale opportunities.

“However, if you look further outwards at products like Blackberry’s Wireless Presenter, Samsung’s Wi-Fi Streamer, Destiny’s Digital Pen, or Red Fly’s Smartphone terminal, you move into products that really enhance the capability of the device they’re associated with, and how they integrate into the user’s overall requirements,” notes Doughty.

The whole accessories environment is extremely trend driven and has broadened hugely in the past few years, remarks Andy Tow, managing director at Avenir Telecom. He states: “It now ranges from cases and connectivity, right the way through to audio products, enabling end users to download and use media content. They can watch training videos or a recording of a business conference on the other side of the world, right in the palm of their hand.

“With advances in technology, particularly in Bluetooth, there is a trend towards sophisticated and solution-focussed products, such as the Bluetooth BeeWi keypad, which enables users to synchronise a larger keypad with their mobile phone really easily. Obviously that boosts employee productivity, and end user satisfaction,” says Tow.

On the next big thing in accessories, Joseph Fisher, trade sales manager at Kondor, comments: “The importance of protection, such as data backup, transfer methods and storage, and the need for more power will grow, primarily as a result of the importance of smartphones and the impact on battery life. Many devices do not come boxed with an in-car charger or USB charger. Music, docking, charging solutions are growing at a considerable pace for Kondor.”

Yet on coming trends in the business accessories market, Kemp foretells the death of car kits. “Being realistic, car kits will decline as Bluetooth becomes standard kit on more and more cars. Unless you really need something special, there will be no need. But cases, power on the move, docking stations, headphones and car cradles will all continue to sell strongly.”

Adele Mauler, sales manager for Jabra in the UK and Ireland, comments: “We are finding that our Bluetooth handsfree headsets and speaker phones continue to be the most popular mobile accessories with pro-sumers in the UK. The fact that Jabra devices allow instant communication, whilst helping to keep the driver on the right side of the law, also adds an incentive to those who spend a great deal of their working lives on the road.”

Who drives trends?

The most successful accessory sales are from those that tap into the lifestyle choices of the user, states Fisher. In the case of the business user, he says a power-hungry smartphone user will want convenient ways to charge, such as a three in one charging system to ensure they never run out of power.

For commuters, he notes there are numerous Bluetooth options, such as headsets or speakerphones, and device holder solutions available to ensure that handset users can stay in touch but remain safe and legal while on the move. “As mobile technologies converge, business users are also buying Bluetooth keyboards, data cables, plus memory cards and readers,” Fisher adds.

Tow agrees: “We see accessories trends impacting both business and consumers. Quite often, trends in high end products will see popularity in the business marketplace first, because businesses have the budget to adopt innovative new technologies first, combined with the will to roll them out to the workforces in order to improve productivity.

“At the same time, we often see certain types of accessories becoming popular in the consumer marketplace first, so we experiment,” continues Two. “Products that began life as popular consumer offerings often evolve into the must-have business enabler.”

Fisher adds: “From a music accessory point of view, consumers tend to lead the way as this is more of a leisure pursuit. For more practical accessories such as charging, Bluetooth and data storage, business will lead the way and this will filter through to everyday life.

“iPhone accessories sales have been consumer-led, while BlackBerry accessories have traditionally been business-led, although we are seeing a shift in this area as demand for BlackBerry accessories rocket in retail for consumer users now too,” Fisher continues.

Vital ecosystem

Accessories are an important part of the mobile ecosystem, states Kemp. “They are essential. Could you survive without a car charger? Your headphones for listening to music? Your car cradle and car kit? However, dealers and resellers have to understand that although selling a single car charger won’t buy them a Ferrari overnight, selling a case, car charger, visor car kit and car charger as a package with every smartphone just might.”

Apple moving into the mobile market has had a massive influence on the business user, comments Mike Hopkinson, group sales director at Pama & Co. “We are sure that Apple will continue to revolutionise the mobile phone sector, and with it the accessory marketplace. iPhone, iPad, notebook and BlackBerry accessories have become a lot more prominent lately. All of these products are hugely desirable and expensive and we are confident business users will continue to focus on the need to protect these devices to prolong there longevity.

“There is also growth in wireless keyboards to connect to the iPhone, iPad and PDA devices, enabling the business person to type and work at speed while travelling, be that on trains or through the air,” continued Hopkinson.

Life of the party

Tow states that accessories are a vital component for the overall health of any mobile dealer.

“Accessories increase the dealers’ bottom line, while enabling them to offer customers a complete package. By taking ownership of customers’ problems and eliminating the headaches of variety and compatibility, we help business end users keep their own teams focussed on improving their own bottom line.

“Accessories are also an important part of the mix when it comes to reducing churn,” continues Tow. “By helping our end users, eliminating confusion and meeting end users’ needs, we help dealers and resellers to retain business for the long term.” Accessories are a vital part of the mobile ecosystem, comments Hopkinson. “They provide an invaluable margin lifeline to the dealer and reseller channel, while at the same time providing added value to the end user.”

Agreeing, Mauler states: “Accessories are crucial to the mobile ecosystem as they generate extra sales opportunities for dealers and resellers, while enabling handset users to make the most of their devices. Mobile accessories, such as Bluetooth handsfree headsets, also allow resellers to maximise their appeal in terms of retail offerings to the consumer. With handset margins being squeezed tighter, accessories provide another form of profit revenue for the dealer.”

How to sell Doughty states that mobile accessories represent a big opportunity for resellers to add more value to the both the service and proposition they provide to their customers. “In a lot of cases, accessories at best can be an afterthought, however when included can lead to an increase in the value, profitability, and stickiness, of the solution that’s being delivered.”

Hopkinson agrees: “Dealers and resellers need to start selling accessories and go back to basics, using accessories as a selling tool as opposed to a give-away. The business user wants to be sure they are getting maximum utilisation of their chosen device, and as such are open to positively put together solutions. The dealer or reseller has the opportunity to add value for their client, while adding valuable margin to their business,” he notes.

Tow notes: “We are proud of our dealer education programme and we’re actively promoting the value of adding high margin accessories to a deal. This is a classic example of a proven sales and marketing tactic; crossselling. Margins on accessories can be extremely lucrative, so a handset deal can be made a lot richer by adding a docking station, Bluetooth headset, keyboard or additional power charger. You’re adding real value for the consumer at the same time as making more money.

“Rather than just supplying handsets, with the right education and support dealers and resellers can deliver a comprehensive communication solution that is bespoke to the business user’s team. Avenir is committed to helping dealers navigate their customers through the myriad of accessories without compromising on quality or compatibility,” continues Tow.

Mike Hopkinson, group sales director at Pama & Co

Joseph Fisher, trade sales manager at Kondor

Beat the market

In a tough market accessories are a perfect way for a reseller or dealer to still make incremental profit, says Kemp. “It’s important they range a portfolio of accessories and offer genuine products that enhance both a products’ capabilities and provide genuine benefits. Using accessories can also drive ARPU, so not only can dealers benefit from accessory revenue, but depending on their connection agreement they may also increase revenue share,” he states.

For example, says Kemp, car chargers ensure there is no downtime in the car, complemented by Bluetooth headsets, visor kits and fitted car kits. The Car Cradle for the Motorola Milestone automatically puts the phone in sat nav and car mode when the user docks the device, he says. “In summary, to get the most out of today’s mobiles accessories are a must, and by marrying the right accessories both the customer and the reseller benefits.”

On how dealers and resellers can make more money by selling accessories into businesses, Fisher says the answer is through creative bundle solutions, either lifestyle or themed by handset features. “These create a point of difference for customers, a reason to buy from you and not a competitor, without competing on price, whether retailed, or used as an acquisition tool.”

Mauler agrees bundles work for her customers also: “We find our resellers tend to get the most return with bundles that involve combining handsets and accessories. I would advise resellers to look at propositions that add value, so something a little bit different, for example bundling products that are complimentary both in style and function.”

Disties under pressure

On how the mobile accessory distributor market is being affected by the global economic situation and the ongoing consolidation of distributors from both mobile and fixed line, Kemp says that surprisingly, it is having a positive impact. “Where dealers and resellers are seeing overall handset and device sales affected, they are looking to accessory sales to plug the gap in profits. Also, the attachment rates of accessories to smartphones is higher than with general handsets, so once again driving sales upwards.”

While Hopkinson says: “As in most markets in the current climate, there is no doubt some smaller distributors are disappearing. In order to survive and prosper it’s vital to have a wide range of quality products. We at Pama pride ourselves on being both a house of brands, supplying a wide range of quality branded products, as well as being a branded house, manufacturing the Pama brand, and distributing our own brand of mobile phone accessories to all parts of the world.

“Excellent customer service as a must combined with an ever increasing will to remove risk from our clients has been key to our success over recent years. Keeping a tight focus on what we do and being expert at it versus being a jack of all trades is also key to our success,” continued Hopkinson. “We have focused on accessories, found new markets and seen great sales growth in difficult times.”

On market consolidation in the mobile distribution sector, Tow states: “In the past twelve months Avenir has certainly been affected, just like every other area of the comms and mobile markets. But accessories can help businesses in the industry emerge from the recession with higher margins and a more stable customer-base.

“Certainly for Avenir, recent consolidations in the distributor marketplace have strengthened our position, both in terms of new partnerships with good dealers and exclusive partnerships with high quality, innovative new accessories manufacturers, whose products are really starting to generate a buzz.”

So, get accessorising, people! Sell, sell, sell!