When Traffic Makes Us Happy
Friday, May 28th, 2010
By Stephen Baker, Vice President, Industry Analysis
In our private lives we all despise traffic. It slows us down and deprives us of making full use of our time. Too much (fill in the blank) in too little space. In our professional lives as a retail tracker we have the opposite view … traffic is good. Retailers love traffic. Sellers love traffic. Crowds are great. We all want more and more shoppers, because we all know more shoppers lead to more buyers.
More store or Web site visits inevitably lead to more sales, better attach rates, and convenience and impulse purchases. For example, products like ink and paper, and music and movies, have always been keys to getting customers into the electronics store. They have repeatable purchase habits driven by launches or just usage. But traffic can also come from those big ticket products that people use everyday like PCs, TVs and cellphones. Like milk and eggs at the local grocery these electronics consumables not only bring in customers but offer the seller a way to attach more products to that sale. Your TV is no good without cables, your printer is useless without paper, and your PC loves to have software loaded on to it. Maximizing the monetization of the consumers’ interest in that big ticket product is in everyone’s best interest.
I mention this in light of the launch a few weeks back of a software download store by Hewlett-Packard. As one of the leading consumer PC brands, HP’s Web site has lots of traffic. Buyers, tire kickers, comparison shoppers, and curious browsers all make up a stream of visitors to their site as the PC offerings draw a huge amount of traffic. In fact, according to NPD’s Consumer Tracking service the HP Web site was the second largest PC sales Web site in 2009 and accounted for 10 percent of all HP’s consumer PC sales in the U.S. With such a strong online presence it was natural that HP should begin to view its Web site more like a store and less like a PC buying and information site. And of course the fact that HP sells more than half of all the ink cartridges sold in the U.S. helps increase that number dramatically. Up until now HP had been very slow to bring in the accessories, peripherals, and software to monetize that traffic. Certainly HP has a long list of branded accessories like mice, keyboards, and webcams to sell; but to effectively capture all the potential value available increasing the selection to include non-HP branded products that logically attach to the PC, like software, and doing it outside the PC buying experience, through a download store, is a wise extension of the items listed for sale.
As the U.S. retail market for electronics has grown more concentrated it is vital for OEMs, especially ones who have the scale and traffic potential like PC OEMs, to leverage this traffic to create an adjacent retail experience for their direct shoppers. Of course this can be done on the Web, as Dell and now HP do, but also through brick and mortar like Microsoft, Sony, and Apple have done. We expect to see continued growth of these direct sales outlets as the leverage in carrying broader selections grows more compelling, and we expect them to be successful as long as they can maintain their focus on leveraging their traffic with adjacent products.
Tags: HP
Consumer Technology | Stephen Baker, Vice President, Industry Analysis | 
May 28, 2010 1:35 pm
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