Microsoft's Shrinking Window For Tablets: Its Fifth-Mover Product Strategy Is Late

Forrester is bullish on Windows 8 as a product for consumers. With Windows 8, Microsoft is adapting Windows in key ways that make it better suited to compete in the post-PC era, including a touch-first UI, an app marketplace, and the ability to run natively on SoC/ARM processors. This pivot in product strategy and product design makes sense as we move deeper into an era when computing form factors reach far beyond traditional desktops and laptops.

But in a new reportSarah Rotman Epps and I look at Windows 8 tablets, specifically, through our product strategy lens. What do we see? On tablets, Windows 8 is going to be very late to the party. Product strategists often look to be “fast followers” in their product markets. Perhaps the most famous example is the original browser war of the 1990s: Microsoft’s fast-following Internet Explorer drove incumbent Netscape out of the market altogether.

For tablets, though, Windows really isn’t a fast follower. Rather it’s (at best) a fifth-mover after iPad, Android tablets like the Samsung Galaxy Tab, HP’s now-defunct webOS tablet, and the BlackBerry PlayBook tablet. While Windows’ product strategists can learn from these products, other players have come a long way in executing and refining their products — Apple, Samsung, and others have already launched second-generation products and will likely be into their third generation by the time Windows 8 launches.

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The Nook Boutique: How Channel Matters To Product Strategists

The link between product strategy and channel is often overlooked, but strong: In our most recent survey of product strategy professionals, 33% say that they, personally, define the channel strategy for the products they sell. In other organizations, product strategists must work with more specialized channel strategists. Either way, channel is a determinant of success in any product strategy.

In the consumer electronics industry – and more specifically, the rapidly changing tablet market – channel presents a major challenge to product strategists. Most product strategists sell their tablets at Best Buy, a retailer that receives high foot traffic from engaged buyers, but which contains a lot of competing models. It’s easy for any individual tablet product to get lost at Best Buy, particularly when the retailer is offering plenty of Android tablets with limited meaningful differentiation among them. Buying end caps (which are expensive, if differentiating) can help, but it’s not always clear that the Blue Shirts can explain every tablet’s value equally.

Apple has this quandary beaten: Its Apple Stores form the core of its retail channel, and after a product like the iPad has been popularized, Apple also sells via mass-market retailers like Wal-Mart and Target. Competitors haven’t been able to match Apple’s winning formula, though Microsoft is starting to roll out its own stores.

Barnes & Noble offers the most interesting test case: As Sarah Rotman Epps has written, the brick-and-mortar stores play a very central role in the product strategy of the Nook Tablet. The new Nook Boutique has finally launched (see photo below); how is it stacking up?

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Christmas 2011: The First Mass Customized Holiday Season

Ah, Black Friday: What would the post-Thanksgiving shopping bonanza be without a visit to the local mall? This year, I was keen to perform some gumshoe research on a theme I've been talking about all year long: mass customization, a product strategy that's ready for prime time across multiple industries.

A trip to the Natick Mall (yes, "Mall," no longer "Collection," New Englanders) reveals that mass customization isn't just the future; it's the present. In fact, it's hiding in plain sight. Build-a-Bear Workshop, Hallmark, Lego, and LensCrafters are all stores in the Natick Mall that offer significant customization for consumer products. Burberry is the latest Natick Mall vendor to offer mass customization; I am quoted in Time magazine this week (here, but subscription required to view the link; page 82 in the December 5 paper edition) discussing how luxury clothing and customization fit together well. As I've written before, one of the benefits of employing mass customization is that it empowers consumers to create products that express their personalities -- a particularly relevant feature for clothing and apparel products.

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Welcome To The Nook Signing

 It’s a tried-and-true in-store promotional tactic: the book signing. Authors tour bookstores, meet their fans, and sign copies of a book that was bought in the store that day.

How can book signings be updated for the 21st century? Barnes and Noble, with its Nook devices and its rapidly expanding Nook Boutiques, has an opportunity to create a total product experience around its Nook devices and digital books. Let's call it a Nook Signing, a theoretical Forrester product idea for Barnes and Noble to consider.

Leveraging its in-store Wi-Fi, Barnes and Noble could host a series of Nook Signing events – special book signing events only for owners of Nook devices (or those willing to buy them in store that day).

The event would feature marquee bestselling authors like George RR Martin or other authors with vociferous, loyal fans. (Barnes and Noble would have to incentivize these authors).

Attendees would get to meet the author, but more importantly, would receive an in-store download over Barnes and Noble’s Wi-Fi, receiving unique, brand-new content on their Nooks. For example, Nook Tablet and Nook color devices could receive a video from George R.R. Martin offering up an exclusive tidbit about his next book.

What happens next? Nook Signing attendees use their Facebook, Twitter, and other social media accounts to tell the world the news about George R.R. Martin’s next book ... which they learned about at the Nook Signing.

What does this event accomplish?

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Brand Loyalty Is Declining. Total Product Experience Chains Can Help.

Product strategists in many industries (from CPG to consumer electronics to financial services) share a challenge with their marketing colleagues: how to leverage the power of brand. Product strategists have a number of strategic tools in their toolboxes for differentiating their products from competitors’ offerings: features (a different taste, a new technical capability, or a higher interest rate, for instance); channel, price, or brand (or based on some combination of these factors). For the moment, let’s think about brand, because some product strategists design and build their products based largely on the promise implied by their brand name.

Forrester’s new research report – leveraging a multi-year analysis of Consumer Technographics® data – shows that while brand is important, brand loyalty (defined as the propensity to repurchase a brand) has been waning. The new report, entitled “Brand Loyalty Isn’t Enough For Products Anymore,” reveals that:

·         Brand loyalty is on the decline. Brand loyalty dropped in the U.S. from 2006 to 2010, our data shows. One reason? The Great Recession. Another? The strength of brands themselves: competing brands in the marketplace entice consumers to try new brands.

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Pulling Off A Razor-Razorblade Product Strategy, Like Amazon's Product Strategists

Amazon’s product strategists shocked some constituencies with their $199 price point for the Amazon Kindle Fire tablet announced today.  But there’s a fundamental product strategy lesson to this pricing, and it’s an old product strategy model:  The so-called Razor-Razorblade Pricing model.

We all know this model well, as consumers: your initial purchase of razor is relatively cheap, but the cost of replacement razorblades really adds up over time. If you don’t buy razors, perhaps you’re familiar with this scenario from your inkjet printer.  Remember how cheap that scanner/printer was -- but have you ever seen the price of refill inkjet cartridges?

The Razor-Razorblade model works when “dependent goods” – the refills, the stuff you need to keep buying to use the product – are closely related to the anchor product.  In the case of the Amazon Fire Tablet, the dependent goods are content and services – MP3s, streaming videos, and of course books, magazines, newspapers, etc. and cloud services that allow you to store and synchronize your content across devices. Amazon’s product strategists can afford to charge a low entry price to raise adoption of the device, and then (they hope) deliver an experience that’s attractive enough for Kindle Fire owners to pay for as a service.

Hence Amazon CEO Jeff Bezos’ portrayal of the Kindle Fire product strategy:  “What we are doing is offering premium products at non- premium prices,” Bezos says. Other tablet contenders “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

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What Steve Jobs' Resignation Means For Product Strategists

First off, let me say this: I hope that Steve Jobs' health improves, and that he comes out of whatever challenges he's going through in the best of health. He's an amazing, visionary leader of a dynamic company -- and he's also a person with a family. Let's all wish him well.

While famously a CEO, Steve Jobs is also, it should be known, a product strategist par excellence. He's clearly been involved, in a deep way, in the development of Apple's product ideas, product designs, business models, go-to-market strategies, and responses to competition. These are the job responsibilities of product strategists. In his (and Apple's) case, product strategy has risen to the very top of the organization.

Product strategists of two different flavors are wondering how they might be affected by his resignation as CEO (and concomitant request to become chairman):

  • Product strategists who compete with Apple. Product strategists at companies like Microsoft, Google, Samsung, HP, Dell, HTC, and similar firms wonder if Steve Jobs' change in role might benefit them. They actually shouldn't wonder: His departure from the CEO spot won't benefit them -- not for a very long time, at least. Apple's product development road map stretches into multiple years ahead and has been shaped both by Jobs and by the organization he built. Jobs' departure won't affect Apple's product portfolio, quality, or competitiveness for a long time -- if ever.
     
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How Are You Reacting When New, Disruptive Products Come Out?

We talk to product strategists in a wide variety of industries. Regardless of the vertical industry of their companies, they tell us that the release of new, disruptive products -- like Apple's iPad -- changes their relationships with their customers. Oftentimes, nearly overnight.

Whether their product comes in the form of “bits” (content, like media, software, or games) or “atoms” (physical products, like shoes, consumer packaged goods, or hardware), consumer product strategists must navigate a world filled with a dizzying array of new devices (like mobile phones, tablet computers, connected TVs, game consoles, eBook readers, and of course PCs). We call this proliferation of devices the Splinternet, a world in which consumers access the digital world across a diverse and growing number of hardware and platforms. And product strategists have to react by developing new apps, by crafting digital product experiences, and by rethinking their product marketing.

Delivering digital products across the Splinternet isn’t easy: It requires understanding -- and acting upon -- an ever-changing landscape of consumer preferences and behaviors. It also requires reapportioning scarce resources -- for example, from web development to iPad or Android development. Yet product strategists who fail to contend with newly disruptive devices (like the iPad or Xbox Kinect) will find themselves in danger of being left behind -- no matter what industry they’re in.

We'd like to invite product strategists to take our super-quick, two-minute survey to help us better understand how you are reacting to disruptions caused by the Splinternet: 

UPDATED: THE SURVEY IS NOW CLOSED

Thank you!

Join Us July 27th In San Francisco For An iPad App Strategy Workshop!

More than 90,000 iPad-only apps are available today. Forrester clients in a wide range of industries — media, software, retail, travel, consumer packaged goods, financial services, pharmaceuticals, utilities, and more — are scrambling to determine how to develop their own iPad app strategies (or browser-based iPad strategies).

Clients are asking us to help them address both challenges and opportunities associated with the iPad: How do I develop an app product strategy for the iPad? Does the browser matter, too? What will make my app or browser experience stand out from the competition? How will an iPad app complement my smartphone and Web properties?

If you are navigating these sorts of decisions, I'd like to invite you to a very exciting event being hosted by an analyst on my team, Sarah Rotman Epps. Sarah's holding a Workshop on July 27 (in San Francisco) to help clients like you separate the hype from the reality and take concrete steps toward developing a winning iPad app and browser strategy. 

The Workshop: POST — Refining Your Strategy For iPads And Tablets
This Workshop focuses on refining your strategy for reaching and supporting your key constituencies through iPads and other tablets. We'll take you through the POST (people, objectives, strategy, and technology) process, helping you to:

  • Understand where the tablet market is going based on Forrester's latest data and insights.
  • Apply what other companies have done to your own tablet strategy.
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It's Time For Mass-Customized Clothing And Apparel Products

Calling all product strategists at big name clothing and apparel companies: If you work at the likes of Gap, Macy's, Nordstrom, or American Eagle Outfitters, we at Forrester think you are currently missing out on an opportunity to delight customers, generate new revenue, and differentiate your offerings. We’ve been writing about why now is the time to experiment with mass-customized product offerings – customer-facing digital technologies have reached the point where customization is easy to deliver, and customers increasingly expect products and services will be tailored to their desires and needs.

Now it’s time for product strategists at big name clothing and retail companies to give mass customization another shot. Levi’s once offered customized jeans (from 1993-2003), but the offering was too far ahead of the curve – it didn’t have the opportunity to leverage the type of digital configuration experiences available today, and it didn’t offer buyers choice in features they wanted (like color).

We know that product strategists who want to offer mass-customized clothing and apparel products face customers who are stuck in an off-the-shelf comfort zone. We know that this customer resistance is holding back some product strategists at big brand-name clothing companies. Yet the return on investment could be significant. Incorporating customization into your product strategy will enhance current customer relationships and attract new customers that, up to now, have not been able to find what they want or need from your products.

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