Imagine you are at Vythiri Resort; an exquisite eco-friendly getaway in the heart of Wayanad, a district in north-east Kerala. Replaced is the daily dose of pollution with a cool forest breeze and while you’re listening to the symphony of nature in the presto agitato of a nearby waterfall, your phone suddenly starts to ring – an important project at the office needs your attention.
So you start working, with the hope to complete it soon and get back to enjoy your vacation. Everything looks good, you’ve made the required changes and just as you were about to hit the save button, your laptop shuts down.What a bummer!
You’ve had recently reported this to an online service startup too and their expert had warned you that some problems may persist but now you are wondering – “What if, I had visited an offline store instead?”
You: My laptop shuts down every 2-3 hours. Can you please fix it?
Shopkeeper: Yeah sure, let me see… (Checks your laptop) Sir, X is not working in your system. You can probably get it repaired for INR 2,000 but selling it would be a better option, it’s an old laptop. I can get you a good price.
See what he did there?
He begins by understanding the product; genuinely checking its condition. And then goes on to suggest solutions as well as laying out other options. That’s the advantage of having all services at one place. It feels like someone’s got our backs!
We live in 21st century, and today, breaking down of one’s laptop is more tormenting than an actual heartbreak. We are emotionally attached to our products. We care for them and that’s why, getting the product repaired alone does not meet our expectations; we want to ensure the best for our products.
Offline markets have had this figured out for a while now, but online players have created separate platforms for “Retail”, ‘Maintenance” and “Resale” of their products.
Currently, there are hundreds of startups offering “Services” (repair & maintenance) and “Ecommerce” (online retail) sector. Reselling platforms or recommerce startups have also started blossoming, with about 30 startups focusing on electronics and automobiles.
For the birth of such a crowded market, there has to be something great about these companies. Following is a table of, what could probably justify the buzz.
Ecommerce follows the model of availing products at consumer’s doorstep and thereafter ends the relation with consumers. Major innovations have been brought in by the players in services and recommerce. Broadly, two types of companies exist today –
- Those who’ve built their own team of experts and serve a segment of consumer needs. And,
- Those who’ve served as classified portals for nearby product experts or sellers.
Undoubtedly, these online platforms have increased leads and visibility of offline shops but what is the impact of this segmentation?
There are over 100 mobile apps operating in product maintenance, but most of them don’t know what all products does a consumer own, whether their bike’s servicing is due or are there any critical issues with the product handling.
Putting in reference to our story, we’ll have to figure it out on our own – whether to get our laptop repaired or re-sell it. Because, once the laptop is repaired, services startup will close the deal and there is no further correspondence. We ask for repairs, repairs are done and then, we are on our own. No understanding the product needs, no suggestions, nothing.
This operational model is actually similar to that of a chocolate shop because once the chocolate is sold, chocolate shop also ends the relationship with the user. Ending the relationship is acceptable for a chocolate seller because we eat the chocolate in a few hours and then there is no product left to base the relationship, but it is clearly not the case with laptops. We do not eat Laptops, we maintain them – year after year – with better accessories, periodic servicing, needful repairs and finally, resell them.
Laptops are durable products and so are the mobile phones, automobiles, home furniture and home appliances. Durable products require constant care and support from the experts. When we buy a durable product, we enter into a relationship with the seller that needs to be nurtured with constant support and expertise of a product expert.
But with this segmentation, online platforms have become so focused on creating instant smiles that longtime happiness is not even an option anymore. Nevertheless, we love online services because they are convenient and allows us to access them from the comforts of our home. Either ways, we compromise on one aspect.
So what if, we create an app offering everything from maintenance to resale and accessorizing of durable products.
Let’s call it – ‘Product Wallet’ – One stop destination for managing consumer durables. It will provide a complete user experience by building a product that can bring the ‘one point management’ of offline market, online.
What to expect from product wallet?
We asked this question to our friends, family, cab drivers, random canteen guys, fellow travellers and pretty much every smartphone owner who was unfortunate enough to meet us. Post this, we checked its feasibility by stating our surveyed expectations to product experts. We reached out to 400 consumers and 150 Product Experts. Following are our observations –
Consumer & Product Experts Demographic Variables:
Consumer & Product Experts Opinion on buying Pre-Owned Products online:
82% of consumers are willing to own pre-owned products, while most visited pre-owned websites but never proceed to buy because they are unsure about the quality of product they will receive.
This shows that trust is the key issue in reselling of products. If pre-owned products are in functional condition and product experts approve their quality, many people are interested in buying them. This formed the first point of MVP – “Trustable Application”
Another major observation was the consumer’s willingness to know their product’s resale value. 92% of consumers were interested to get a product resale price. But the challenge is what all factors are required to predict a resale price? We asked the product experts about it.
Product experts are capable of giving a resale price, if provided with the following information:
Also, we found that many consumers preferred local product expert for minor repairs and brand outlets for product detailing.
- 89% showed interest in availing their services using doorstep/pickup & drop service as a chargeable facility, and 75% of consumers were ready to spend 200 INR as an extra charge for the facility.
- Our discussion with product experts on consumer requirements for service showed a positive response. 93% of product experts expressed their willingness to provide doorstep repair service at an average amount of INR 200.
First interaction with consumers and product experts made us realize the opportunity to create value and its feasibility. We took a step forward to understand the product economy.
According to IBEF, India is expected to become the fifth largest consumer durable market in the world by 2025. The consumer electronics market is expected to increase to $400Bn by 2020. The production is expected to reach $104Bn by 2016.
Present Indian market for consumer electronics and appliances is around $9.7Bn and has grown at a CAGR of 9.7% over the 2010-2014 period, stated EY in a report on Indian Electronics and Consumer Durables Market
Car repairs is a market of around $2Bn and according to a recent study done by Google India and Mahindra First Choice Wheels Ltd online searches for used cars alone has seen an increase of 20 times in the last six years, which indicates a compounded annual growth rate of 54%. The annual used-car demand in the Indian market is around 1.4 Mn cars.
More than 12Mn pre-owned bikes are sold in India each year, with the value of the market estimated to be $8 – $12 Bn.
All this exploring, helped us identify the need of a reliable product which consumers can use for managing their durable goods.
Following are the key aspects taken into consideration while shaping the idea into MVP (Minimum Viable Product) :
- Single entity to handle the complete product-lifecycle i.e; buying, repair and re-selling.
- Reliable entity for every minor and major need of the product.
- Sustainable business strategy to fulfill consumer needs at fair rates.
- User-centric application to ease the product management.
- Self-intelligent application to keep track of all present and future needs of the product
Now, How should the Product Wallet look like?
Considering the MVP, product will broadly have four offerings – Personalized Product Wallet, Repair, Resale and Accessorize.
Personalized Product Wallet
When consumers sign up on the app, home screen will have two tabs-
- Product Wallet: To add all products along with its basic details.
- Explore: To find both New & Pre-owned Products to buy.
Every consumer can get an estimated resale price of the product by adding it to the wallet. Although, the accurate price will be given post inspection by the Product Expert.
Below are the product screens –
This section tries to deliver personalised experience to the consumer. Following table shows how the product offerings match with the proposed internal strategies.-
After adding products to the wallet, application will automatically send notifications regarding regular maintenance of products, as recommended by the OEMs. Consumer can respond to the notifications by requesting the best prices. In case of any other issue with the product, user can request the services using the repair option of the app. In either case, multiple quotes will be provided within three hours of placing the request.
Consumer can sort the price quotes on four parameters – Price, Location, Rating & Authorized/Unauthorized Service Experts. Detailed profile of service experts will also be available to consumer including facilities offered, recent service history, Quote description, Consumers ratings & reviews.
Consumer shall confirm and schedule the appointment within next 24 hours. On confirmation contact details of service expert will be provided. Cancellation of an appointment before one hour of the scheduled time will be charge free, otherwise cancellation fee will be taken. After completion of repair, Service expert shall provide current resale price of the product.
During consumer survey we saw that 86% of the consumers were price & quality conscious for availing repairs. So, this section offers unique proposition to the consumer by providing best repair prices(quotes) from nearby service experts. This model excludes all the visiting or inspection charges. The labor pricing will be done on basis of minor & major repair declared by the service expert.
Following are the screens for Repair section:
Discussion with the service experts, helped validating the user expectations regarding quick service delivery, service warranty and best prices:
- 78% of Service Experts confirmed about visiting the consumer on confirmation of service/repair request within 4 hours.
- 96% of Service Experts confirmed about providing service warranty on the services/repairs done by them.
- 98% of Service Experts confirmed about providing service/repair quotes within 2 hours on consumer request.
Following table maps the internal strategies with Repair section offerings:
Consumers can schedule an appointment with the product experts to know the accurate resale value of a product.
Post this, product experts will examine the product and generate an inspection report to determine the accurate resale price. Experts may also provide recommendations for upgrade or repair of product to avail a better resale price.
On completion of this process, consumer can make the product visible to other users in their Explore section.
In surveys, 74% of consumers were found to be comfortable in providing their product for a two-day trial period to a potential buyer. Also, surprisingly most of potential buyers were positive about paying extra to avail this facility. This feature along with product inspection report & service history helps the consumer to make a wise decision while owning the product.
Following table details, how the internal strategies are inline with the Resale section offerings:
This section will offer buying suggestions to the consumer on the basis of their owned products and behavioural trends. There are a lot of accessories launching every day, consumers can stay updated and easily upgrade their experience. Also, being closely connected with the consumer at every point of their repair and servicing needs, suggestions can be highly personalised.
For example, a user who has been frequently repairing his phone’s screen, will receive suggestions to use a better screen guard and thick covers. Another user who have been buying all kind of accessories from a particular fandom can be targeted with more products of that fandom.
Another aspect to this is generating leads for nearby product centers, OEMs and other players dealing in personalized accessories/products. Also, a certain brand can be created out of the nearby product centers based on the quality and quantity of products they offer.
Following table details, how the internal strategies are laid down in respect to the offerings of Accessorize section:
After talking about ‘what’ and ‘how’ of the product wallet. Now, comes the most important aspect of this proposition, How does Product Wallet creates value?
1. Introduces Product Co-creation in Consumer Durable:
This Model will help OEMs(Original Equipment Manufacturers) to understand and analyze consumer behavior during the whole product life-cycle. The collected data can eventually help to realize product co-creation in consumer durable.
2. Increases Product’s Lifetime:
This intelligent platform will increase the product’s lifetime by providing automatic notifications about product’s maintenance needs.
3. More Leads for Service Experts:
Service experts get to bid on their service charges, which gives them a chance to make use of their geographical position and resources to charge less and attract more customers. The option of resale and accessories also helps them to create more revenues on a single order.
4. Puts Power In the Hands of consumer:
Consumers get the best prices for their product repairs and maintenance with a pool of options to choose from. Also, the consumer behavioral trends can be used to recommend accessories and products of their liking.
These are business terms and parameters, but dreams are not made of economics, dreams are made of beliefs.
We believe in the emotional bonds between people and their possessions. We see the value of time and effort that people put in for their product’s maintenance. From our first pitch to a cab driver to the several other conversations that we have had, one thing that we learned was – Products are not just chunks of metal, they are extensions to our individual identities.
At its core, Product Wallet is combining the basic blocks of Ecommerce, Services and Recommerce companies. The whole idea is built upon the notion – ‘what if these were one entity’. A product which can do lot more than just repairing my laptop like getting suggestions for the latest laptop bags, an option to try that second hand phone for 2 days, before finally buying it.
Imagine the impact, if trusted market leaders join hands to make this happen. What if this became a reality.
Editor’s Note: This article was written along with Manikanth Devarakonda, IIT-Delhi alum, presently leading projects in After Sales Marketing at Hero Motocorp. Article was originally published here.