Why Brands Need to Master the Ownership Experience
For consumer durable brands, consumers are not just buyers. They are owners who will interact with the product and brand for years. Yet, for decades, consumer durable brands have traditionally relied on retailers to own the ownership experience, while they focused on product design and manufacturing. As a result, durable brands have limited to no knowledge of who owns their product and, therefore, no impact on their product owners' post-purchase experience.
Now, more than ever, brands need to own the ownership experience.
The retail landscape is changing.
Retailers were traditionally the owners' resource for product information, help or buying something new. Amazon and Google have forever changed the retail and shopping landscape by improving convenience and personalization of the online shopping experience.
The pandemic has also had a structural impact on retail. A record number of retail stores closed in 2019, while 2020 will likely eclipse last year. Not only will there be fewer stores, but the stores that remain will be predominately big-box, essential retailers like Walmart, Target, Costco, Home Depot and Best Buy.
As retail reopens during and after the pandemic, the shopping experience will be very different. Brands are reshaping the in-store experience as shoppers' habits change, which could include less comparison shopping, and they may not wander leisurely around stores as much. Retailers will want to own the customer in the same way that Amazon does, all to the brand's detriment.
Owners are digital-first. Brands must meet them there.
The digital-first consumer is leaning on technology to shop and engage with brands. Ecommerce sales spiked in recent months with consumers spending $200.7 billion, an increase of 44.4% from the same quarter last year, according to the U.S. Department of Commerce.
Brands need to be ready to engage with owners throughout the product's life cycle via digital channels where owners spend their time. Brands must digitize the product registration and support processes and have a robust digital presence.
According to Registria's 2019 Trend Report, "The Rise of the Engaged Owner," 52% of owners register for the first time when offered an option to engage with their mobile device and are more likely to purchase extended service plans and/or buy related parts and accessories.
The ownership life cycle is ongoing.
The ownership life cycle begins with the unboxing experience when the consumer unwraps or installs the new product. Is it easy to learn how to use the product? Have they been offered ways to get even more value from the product?
From this moment forward, the brand must demonstrate through all engagement points with the owner that it values their experience. Brands need to capture an explicit opt-in and collect first-party data such as name, products owned, and preferences.
Ongoing communication with the owner should be personalized and event-based, with valuable content not always related to a sale. Smart brands have a multi-year welcome series to build an early and continuous relationship with the owner.
By knowing and engaging with the product owner, the brand is in an enviable position when the owner is likely in the market for replacement or related products. Owners are also more likely to provide higher quality ratings and reviews.
Direct owner sales is the new frontier in DTC.
There's a new, lucrative frontier in direct-to-consumer, and it's not hot new brands selling trendy fashion or subscription boxes through social media.
Many brands who have been around for decades, and even a century, never had a direct sales channel with their product owners. However, building direct-to-consumer channels focused on existing product owners enables brands to sell and support owners throughout their product ownership, opening up an untapped revenue channel.
Over the months of March and April 2020, Registria analyzed product registration and ownership data from over 100 global brands, uncovering 63% year-over-year growth in direct owner sales. The emphasis on selling additional products and services, such as care plans, accessories, content subscriptions and replacement services, to existing product owners proved to be a valuable direct-to-consumer revenue channel for brands looking to offset traditional retail losses.
Brands need to take ownership to succeed.
With a deeper understanding of owners, brands can better inform business strategies and decisions. By delivering a great initial experience, brands not only identify more product owners, but they also gain deeper insights into their owners and their preferences, and these insights can guide future programs, product development and more.
A leading fitness equipment brand saw an opportunity to innovate their ownership experience, starting with the registration process through proactive service and support. After introducing engaging technology and a more seamless solution, it saw a three-fold increase in registration rates, 16 times growth in extended warranty sales and a 500% growth in revenue per customer.
For brands to successfully own the ownership experience, they need to know who owns their product, personalize owner engagement at scale, and build trust into every owner interaction. And this strategy must be supported and refined by continuous data about the owner and their behavior.
Collin is the managing director of Registria, which helps brands identify product owners and improves the ownership experience. Under his leadership, Registria serves over 300 well-known brands across industries including consumer durable goods, electronics, fitness, home appliances, and more. With over 25 years of executive experience, Collin is a graduate of Stanford University and Harvard Business School.