unlocking western retail markets for your hardware
TRANSCRIPT
Unlocking the Western Retail Markets for your Hardware
Jeff KatzSenior Practice Lead IT / Engineering
Telefónica Germany NEXT GmbH
» Consumers are ready to spend. Many of them still like brick-and-mortar stores.«
-Sarah Halzack, Bloomberg
Agenda
– Relevant quote
– Agenda
– Speaker Info
– Marketing and Branding
– Sales
– Pricing
– Channels
– Retail deep-dive
– Telefónica
– Geeny
~50 minutes | english
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Jeff Katz
– American living in Germany for five years
– Co-founded several companies in Finance, IT, Security
– Founded hardware accelerator called HARDWARE.co
– Background in Electrical Engineering and Embedded Development
– Has designed and built hardware, firmware
– Currently working for Telefónica NEXT
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You’ve done it! … Now what?• You have a product• People seem to like it / there is a demand• Time to bring it to the market…
Right?
Marketing and Branding
Starting with a disadvantage• 38% of consumers in UK have questioned credibility and
authenticity of Chinese brands in the past• Concerns about quality, counterfeiting, production ethics• Lack of trust
» There is no question that as a Chinese company you have to work harder to prove your intentions are genuine. «
-Josh Gartner, vice-president of international corporate affairs, JD.com
Break through skepticism• Create your Global Identity• Earn word-of-mouth from early adopters• Target the right market• Are you selling to millennials? Businessmen?• Associate yourself with things your target market likes—
sports team and events, celebrities, pop culture• Get used to customer-centric culture• Two years+ warranties in EU, Free Shipping• High quality expectation, low tolerance for underdelivering
Sales!
Really ready to sell?• Certifications• Localization• Packaging• Training• Point-of-Purchase (POP)• Account Manager• Channel Marketing• Capital (Net-90 Payment Terms)
• Samples• Support• Travel• Pricing• … and more
Localization and InternationalizationRank Language TotalSpeakers
1 Mandarin >1Billion
2 English ~1Billion
3 Hindi >500Million
4 Spanish >500Million
5 Arabic >400Million
PricingHow much should the product cost?• Market positioning• Include hidden costs• Bottom-up costing vs Top-down costing• Give yourself plenty of room to make regional adjustments
• Four P’s:• Price, Product, Promotion, Place
• What category are you in? What is your USP? Shop online&in store.
Sales!
How will customers in the west behave?
Source: MKM Partners
Own Website• DON’T UNDERCUT RETAIL PRICING• It should be easy to buy from you• Payment methods preferred in target market• Short process as possible, optimize funnel and messaging
• It should be fast shipping• Customers don’t want to wait• Be aware of holidays in your target market
• Test your messaging and branding
Specialty/Online Shops• Establish relationships with shops in your target market• Utilize their existing customer base
• Typically on consignment, less common drop shipping• They will help you reach your first customers• … bridge any cultural gaps• … deliver a great product experience• … gather feedback and data about your customers• … market and communicate, coordinate with them!
Amazon• Amazon is a Marketplace and also a Platform. Either you let
them handle fulfilment (FBA), or they just list and you ship.• 43% of all online retail sales in the US went through Amazon in
2016—only grows YoY• Lower margin than other options
Amazon• Fulfillment by Amazon (FBA)• Enables reach to Amazon Prime• No need to handle packing and shipping (and reverse)• Customer Service handled by Amazon• Sell through Ebay FBA as well
• But, be careful:• Out of stock? Amazon notifies other sellers of your problem• Individual labeling requirements, (UPC) other rules• Customer Service handled by Amazon
Amazon
How do customers in the west behave?
91.5%Source: US Census
Retail Models• Wholesale• They buy from you, assume all risk. Big margin.
• Drop Ship / Direct Vendor • They show, you fulfil. Shipped directly to customer by you.
• Consignment• You are paid as products are sold, less margin, more risk.
Retailers in General• Between the customers and you
there is a whole organization• You need to meet and
convince the buyer• Trade shows > Sales Reps > *
• Retailers will not market for you They are a “dumb” shelf where your product sits. If you do not drive customers to retail stores, customers will not buy your product.
Retailers in General• You can (and should) get help approaching retailers• Sales Agencies / Rep Firms / Manufacturer’s Reps• Trusted by the buyer• Local to HQ (Target/Best Buy will be in Minneapolis)• Relationship based• Pricing: anywhere from 3-8% of net sales
• Branding/Marketing Agencies• Don’t forget: You have to generate demand
Retailers in General• If you get a meeting with a buyer, they are already convinced• You are now competing with the other appointments they
have on the same day. Try to be first. Make a good impression. Be the one they choose. Say YES to everything.
• Contract terms:Slotting Fees How much does the dumb shelf cost?
Promotions You pay for the discount, the retailer keeps their cut
Returns You pay for the returns, up to 15% normal
Margin 20-45% Typical for connected devices
Payment Terms Up to Net 90
Retailers in General• Total process from buyer interest to shelf time: 6-12 months!
1. Buyer requests samples2. Samples added to proposal for category update3. Proposal is pitched for approval (1-2 times a year)4. Lots of contracts and paperwork for you5. Retailer guesses demand and writes purchase order6. You ship your product to their warehouses
» For credibility it’s good to work with local partners.«
-Yin Long (殷龙), Project Director (总监), Rafotech
TelefónicaTelefónica, S.A. is a Spanish multinational broadband and telecommunications provider with operations in Europe, Asia, and North, Central and South America.
110th biggest company in the world as of May
Telefónica
Telefónica's open IoT platform Geeny connects users, developers and businesses to create smarter products
- Global IoT platform
Global customer base:
- Global communications operator
• The open Geeny ecosystem connects apps and devices world-wide
• Geeny.io is a 100% subsidiary of TelefónicaGermany and bundles the expansion in the IoTbusiness
• Geeny enables consumers to take ownership of their data and developers to create innovative services on top of existing devices
Open Geeny ecosystem:
Users
DevelopersSmart devices
• Leading mobile operator in Germany and across Latin America
• Worldwide coverage – Availably in 650+ international networks, owned networks in 25 countries
• 350mn customers world-wide
The consumer IoT market exists for years, but has not taken off yet
There are forecast to be 28 billion connected devices worldwide by 2021
Almost 16 billion of them will be loTdevices
loT devices will over-take mobile phones as the largest category of connected devices in2018
This will be driven by the spread of smartmeters and connected cars, as well as by consumer devices
The number of loTdevices in WesternEurope is projected to quadruplebetween 2015 and 2021
Bad UXClosed ecosystem
End-to-end thinking
Fragmented island solutions
… but has not been realized yet due to poor value propositions of existing IoT productsThe consumer IoT opportunity is massive…
Geeny revolutionizes consumer IoT and establishes an open IoT ecosystem
GeenyValue Prop
Current IoT products could be smarter
Light
Controls Data
AlgorithmsPrivate Data Lake
Formula providers
Digital services(Applications)
Non-digital services
Light
E.g., insuran-ces
B2C – Consumers have full transparency who they share their data with
Access via API integration
Access via gateway
Direct access
Element providers
Consumer
Data
Each device works with just one service (formula)and the usage of open APIs is just starting
Data
B2B – Geeny enables IoT solutions to be connected with 3rd services and devices
The IoT world tomorrow, enabled by GeenyThe IoT world today
How our platform worksGeenyValue Prop
Kafka
REST API
HTTP, TCP
Customer Code
DevOps Practice
Application Deployment
Device Integration
Micro Service
State
Cert Manager DB
Devices
Subscriber Shim
Scala, Stateless
External Token Manager
Clojure, Highly concurrent
Cloud APIs (e.g., fitbit)
Runtime Env 2(k8s)
Runtime Env 1(Swarm)
Customer App 1
Customer App 2
Application Connection Service
KAFKA
GRE (Geeny Runtime Environment)
Write logs
App ownership check
Application logs
Credentials check
Docker push
HTTPS
HTTP
HTTP
HTTP
HTTPS
HTTPSHTTP
HTTP
HTTP
HTTPS
Employee
Developer(desktop first)
Subscription response
Refresh token
Autherisation code exchange
Get API KEY
Subscription response
New token notification
Notification queueAPI Specific
Ingress data
PROD2
Scala
Persistent Storage + Per
User Logic
Runtime EnvGateway
Nginx+
Docker Swarm API
Notification Handfler(webhook endpoint)
Scala, Highly concurrent, Stateless
Geeny API gateway
Same as ther other
Fetcher
Scala, Stateless
Subscriber
Scala, Stateless
Proxy
AWS EC2
MQTTIngress/Egress
Rust
MQTT Fetcher
Node.js
MQTT Sender
Go
Thing DB Postgress
Proxy TLS Terminator
Docker registry
Runtime Manager (RTM)
Go
Application Deployer
Clojure
Application Connection Service
B2C Marketplace Backend
Elixr, EriangVM
Static Webserver for Thing Manager
Nginx
Static Webserver for B2C Marketplace
Nginx
Static Webserver for Marketplace CMS/ Developer Dashboard
Nginx
Static Webserver for Customer Support Tool
Nginx, AWS ECS
Geeny Static LB
Nginx+ AWS EC2 with LB
Connect Backend
Django, Gunicom
Things Manager
Node.js
Thing Certificate Manager
Go
Geeny API Gateway
Nginx AWS EC2 with LB
VPN
Docker User-Auth
Go
Geeny API Gateway
Same as the other
Application broker Subscriber
Go
Application broker Publisher
Go
Consumer(mobile first)
Aapp, or backend
Geeny platform architecture Geeny benefits
App providers can develop new formulas on top of popular 3rd party devices without the need to invest in own hardwareDevices providers benefit from the open Geeny ecosystem –enabling their devices to be connected to 3rd party formulas and devicesConsumers store data in their private data lake and have full transparency who they share their data with
Customers can decide how to connect to Geeny – via APIs, SDKs or full backend integration
Geeny is fully technology agnostic – select software and hardware based on best fit for the use case
We generate revenue by providing PaaS and selling services through our B2C and B2B app stores. We share the revenue with our element (data) providers
Money
Data
Money
ValueData
Money
Data
Money
B2B Partner
GeenyValue Prop How our business model works
Elements Formulas
Value-added services
Geeny revolutionizes smart home and establishes an open IoT ecosystem
…..and leverage different apps on top of the devices to enable different use cases
Keyless access – open doors via smart door lock
Warm Welcome at home – Pre-heat home remotely
Keep home save – get alarm, if somebody breaks into your home
Kids are safe – get notification, when kids are home
Consumers have full transparency who they share their data with
Data Data
Consumers can connect their favorite smart home products with each other…
Energy consultant – help save energy costs
How a smart home proposition could look
Smart homeE2E Offering for Customers
End consumers can add popular smart home devices – on a 'Connect What You Want' basis
End consumers can add solutions to devices outside smart home –heating starts as soon as the consumer reaches a 30km radius of his home
Different use cases
Thank you. Let’s talk!
Jeff KatzSenior Practice Lead IT / EngineeringTelefónica Germany NEXT GmbH
[email protected] • [email protected] • @kraln
https://developers.geeny.io
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