Big changes at CES: What to expect in 2013
According to some pundits, there are big changes afoot at CES. Back in 2011, Microsoft announced that the following year would be its last as keynote presenter at CES. They weren’t the only ones either; Apple, HP, Dell, and Nokia are some of the global giants not being featured at CES. But despite some of the biggest consumer tech players bowing out of the show, CES 2013 is going to be the biggest ever, with more than 3,000 companies exhibiting.
So what exactly is happening to the world’s largest trade show that it’s still growing at a dizzying pace, yet losing some of the world’s largest brands?
According to an article by Matt Burns over at TechCrunch, 2013 will be “the year of the gadget startup,” and we think he’s got a point.
You see, when we went to CES last year, we saw a flurry of activity in the pavilions surrounding new brands that were creating disruptive and innovative products without the backing of a multinational’s R&D fund. In the smart watch category alone, for example, there are many competitors that followed the launch of FitBit in 2008. Now in addition to models from big players like Sony and Casio, there are also (and this certainly not a complete list) the WIMM One Watch, the I’m Watch, the MetaWatch, the COOKOO, and the Pebble – the Kickstarter project that raised more than $10 million to date. What’s particularly interesting about Pebble is that they just announced their attendance at CES. This is interesting because they’re a Kickstarter project that is now entering the playing field of the Sonys and Panasonics of the world.
And this makes perfect sense, because with the numbers we’ve been seeing from crowdsourced products this past year, 2013 will surely be the biggest year for crowdfunded startups.
Crowdfunding is blurring the lines between consumer brands and product startups, and at the pace it’s growing, don’t be surprised if some of the biggest upcoming consumer hits come from one of these top crowdfunding sites. The projects are also getting bigger and more complex, such as the OUYA game console, the Oculus Rift virtual reality headset, or the revolutionary LIFX light bulb. How long before the next Nintendo appears from the ranks of Indiegogo graduates?
This isn’t our first rodeo
With more and more small startups making an appearance at CES, it seems like the product entrepreneur trend is continuing to gain steam, and we think this lends a lot of credence to Matt’s claim. We’ve been supporting and working with the kinds of product entrepreneurs he describes for years and while we know that CES can be a boon for these companies, we also know what the most successful among them do well (at least when it comes to shipping).
Seeing as how of the top 50 Kickstarter projects only 8 shipped on time, learning what ‘doing well’ means is important, especially when you’re entering a convention hall with some of the largest retailers and highest-profile journalists in the world. For the new gadget startups at CES, the challenges will be similar, and delivering products will be more important than ever. Shipping to various global markets and doing so without getting bogged down by too many hassles will also be important.
So what about some tips?
With this trend in mind, we thought we’d share some tips that we think can help this new influx of ‘gadget startups’. In the last few years that we’ve attended, we found three major points that are similar across most successful brands:
1. They sell online. This is already a given for crowdfunded projects, but some still struggle. Many distributors are strong with both direct-to-consumer (B2C) and B2B simply because of how efficient they are at selling online. You can be just as efficient at selling directly to your end customer. Get an online store from one of our partners to sell to online consumers. Create a category on your store that has your wholesale products and a form for small retailers. VAR’s (Value Added Resellers) want to know how to build a solution for small business or home market around your products; you can do that with a simple blog attached to your website.
2. They sell internationally. Selling in overseas markets is very important because it can help your business grow quickly, discover new customer needs, and hedge against local market downturns. It’s also a task that has many challenges so finding the right distributor is very important. The best distributors have strong overseas networks and know how to localize your product. Good overseas distribution partners are often hard to come by, so do your due diligence on them.
3. Smaller wholesale purchases, drop shipping and vendor managed inventory. To hedge against risk, the strongest distributors will only invest heavily (by buying larger quantities) in proven products. For unknown or unproven products they may ask you to drop-ship to consumers (incurring costs of holding inventory, shipping, etc.) or consign inventory to them where they will only pay for what they sell. This lets them unload their risk to you and keeps them a strong force in their market. Don’t be surprised if you get asked to “drop ship” or ship to their buyers. Like everybody in the supply chain, they are trying to simplify their process as well. Be prepared to offer them simple solutions.
The above three strategies can be used by any smaller brand or retailer. And most importantly, capitalizing on these strengths will not hurt your relationship with distributors but will actually improve it. Since distributors have large networks and the market you’re going after is smaller, there won’t be a threat of cannibalizing sales for them. This will help you be efficient at getting your product out the door, and make the most of your CES visit whether you’re a gadget startup or a Kickstarter project exhibiting for the first time.
For more tips on shipping successfully, make sure to check out our new Kickstarter fulfillment guides for help with shipping on time.