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Competing in the cutthroat retail landscape is not easy. But a few vendors have found their niche, outselling their chief rivals to become the best-sellers in their markets.
Whether it's Linksys by Cisco, dominating home-networking sales through brick-and-mortar retailers and online e-tailers with its wireless routers and wired switches, Logitech Inc., wearing the keyboard and Webcam crown, or Sony Electronics Inc., taking the cake for retail sales in large flat-panel TVs and point-and-shoot digital cameras, all of the best-sellers shut out the competition to reach the top of the heap.
RetailVision teamed up with research firm NPD Group to honor the products that had the highest sales totals in both retail and e-tail markets across a variety of product categories. The list of best-sellers was culled from NPD's retail sales tracker for all of 2008. The winning vendors will pick up their awards at RetailVision Spring 2009, a conference owned by CRN parent company Everything Channel, at an awards event this week in Boca Raton, Fla.
So what makes a best-seller? Stephen Baker, NPD Group vice president of industry analysis, said the answer to that question is both simple and complex: Brand equity. "Brands that have longevity and an established place in their categories tend to outsell their market over time," Baker said. "They build up brand equity."
Brand equity offers a number of perks that put vendors' wares in front of more consumers than their competitors, according to Baker. "Brand equity gets you a lot of things," Baker said. For example, established brands get prime shelf space, competitive pricing, volume, consumer recognition and, ultimately, it garners respect, Baker said. Building brand equity, however, is a challenge. Products must have the right price, eye-popping packaging and have to stand out among a sea of similar products.
"Consumers tend to buy something they're comfortable with, something they're familiar with, something they've seen before," Baker said.
Retail consultant Gary Stern, CEO of PC Universe Inc., Boca Raton, Fla., the former parent of e-tailer PC Universe, said to become a best-seller, vendors must capitalize on change while also offering something that's "new, unique and different." Stern noted that brand recognition also is critical.
"Name recognition is very important. You also must have a good price, a quality product and nice packaging," Stern said. Best-sellers Sony, San Jose, Calif., and Logitech, Fremont, Calif., are good examples. Stern added that other sales tools such as end-cap and shelf display space can make or break a product. "You have to drive the market to you."
One company that has mastered that is Linksys by Cisco, the San Jose, Calif.-based consumer arm of networking giant Cisco Systems Inc. Linksys took the top spot in four categories with its home networking gear. Bob Gregerson, Americas vice president in Cisco's Consumer Business Group, noted that brand reputation, in addition to strong marketing and healthy partnerships, helped the company become a best-seller. "You can't underestimate the value of the brand and the confidence that brings," Gregerson said.
Linksys by Cisco also gained an advantage by recognizing the needs of its partners and retailers.
"We're very focused with our partners in these tough times," Gregerson said. "Profit is very important to them. We're thus very connected in terms of execution, what products are on the shelf. How often are we turning it? What are our fill rates? And overall working very close with our partners to ensure that we're engaged and we're important to them from a profit standpoint."
To engage consumers to its overall vision of the media-enabled home, Linksys focuses on key market shifts: going green, home entertainment, home audio. The ultimate goal, Gregerson said, is to help consumers navigate the "confusing sea" of home networking gear.
"What we're trying to bring to our partners out there is a true multimedia marketing experience," Gregerson said. "That's everything from the packaging to what's taking place on the shelf or the end-cap that ties to that packaging; how that ties back to both our Web page to get more information, as well as how our Web connects to our partners when that consumer [makes] that decision."
