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Graham

UK sales down by 27%!

Are folk voting with their feet?

yes to the unemployment queues and the mortgage adviser!

Not surprised tbh, although I would like to know how much sales increase during the boom and whether b&o invested wisely during this time?

I am not overly worried about the losses. I am worried about product launches.

It seems they got the BV10 right, I am hoping they fix BS5 with the encore

Worrying that is seems their financial core products are now the Auto stereos. Seems that is the only thing that keeps them alive... 

So B&O, new and more importantly FUNCTIONING products need to be a key interest in your future plans, otherwise, you will not survive for long.

/Ehlerz

What interests me is in the countries list, "other" at 1 million. Finland is apparently in this category + a bunch of "other" countries... So the sales of B&O in Finland must be very small, even at 1 million it would be extremely small.

The loss of over one quarter of the UK sales is astonishing. And that is with the introduction of the BV10 which I believe has been pretty successful. Worrying times.

Stores that rely on retail traffic will continue to have a bleak outlook. Stores that develop relationships within the architectural and design communities will continue to grow. There aren't enough iPod docks in the world that can save a shop that still relies on walk-in traffic. Whether those owners take down the brand, their market, or just themselves remains to be seen. 

Doctor:

The loss of over one quarter of the UK sales is astonishing.

As is the single sale to a single customer in the US that represents 38% of the 8.4% increase in North America!

Go Lotto!

I don't think the ipod dock is expected to drive store traffic. I would expect they expect to sell that through Apple to create brand awareness.

For the link to the design community that obviously make sense to target re-models and new construction

In my opinion they should focus much more on product placement deals with dwr.com, hight end european furniture retailers like ligne roset or B&B and lastly hotels. 

People who pay 3000$ on a piece of furniture to put their TV on, they will also pay 3000$ for a good looking TV.

Stores that develop relationships within the architectural and design communities will continue to grow. 

The death of the brand.

burantek:

Doctor:

The loss of over one quarter of the UK sales is astonishing.

As is the single sale to a single customer in the US that represents 38% of the 8.4% increase in North America!

Go Lotto!

I understand the math, but what is the single sale that enabled it?

soundproof:

Stores that develop relationships within the architectural and design communities will continue to grow. 

 

The death of the brand.

I sure hope that is way overstated, but I think you are right.  Brand is about awareness and keeping good company, not individual store turnover.  To me, the relationship with key auto manufacturers is brilliant.  Stepping up from Bose to Bang & Olufsen for your new motor is a powerful message.  

symmes:

burantek:

Doctor:

The loss of over one quarter of the UK sales is astonishing.

As is the single sale to a single customer in the US that represents 38% of the 8.4% increase in North America!

Go Lotto!

I understand the math, but what is the single sale that enabled it?

It is apparently a BIG market!

symmes:

soundproof:

Stores that develop relationships within the architectural and design communities will continue to grow. 

 

The death of the brand.

I sure hope that is way overstated, but I think you are right.  Brand is about awareness and keeping good company, not individual store turnover.  To me, the relationship with key auto manufacturers is brilliant.  Stepping up from Bose to Bang & Olufsen for your new motor is a powerful message.  

It's tragic. Short sighted and detrimental to the brand.

And it's the total revocation of the entire store strategy. If this is the "brand's" future, then they won't need stores. They can have warehouses, from which they supply A/V to companies such as the Toll Brothers and others. But B&O is only interesting if people know about it, not if it's an under the radar, behind the walls, turn-key installation.

But it's where it's going - hospitality (hotels), yachts, architects, developers. Someone's lost his mind to have approved this.

It's tragic. Short sighted and detrimental to the brand.

And it's the total revocation of the entire store strategy. If this is the "brand's" future, then they won't need stores. They can have warehouses, from which they supply A/V to companies such as the Toll Brothers and others. But B&O is only interesting if people know about it, not if it's an under the radar, behind the walls, turn-key installation.

But it's where it's going - hospitality (hotels), yachts, architects, developers. Someone's lost his mind to have approved this.

Pete Townshend said "Too much of anything is too much for me".  You make me envision a business sweet-spot where you have high revenue/high leverage projects every month, while still providing a strong street view for the product line.  That's why I do like the currently invisible BeoSound 8 so much.  Hope it looks good with a big old iPad between the cleavage.

>>s tragic. Short sighted and detrimental to the brand.<<

What is short sighed about that? For one, I doubt a Toll Brothers would sell much. In most metropolitan areas you will find small high end developers. That's one:

http://www.therenwick.com/site/

For the hotel deals, this is such a perfect way of introducing people to the products.  There is no pushy sales people, it just blends in. It's not that they put it into your average Marriott, the places I saw usually where incredible nice designed and it just makes sense to have B&O in there.

You know, every opinion here has a little bit of truth. But is just part of the truth and not the whole.

The brand is far from dead. I would say depending what market It is exactly the oposite. You don't get a fifth place of the coolest brands in UK without people knowing about the brand and even better thinking that is "cool", even in a market where the sales went down 27%. The problem is the recession really hit very hard the middle class and aspirational market that apparently UK depends very heavily on.

What I really think is dead is B&O as we know it, at least if B&O wants to survive. 

They really need to focus in two strategies: SURVIVAL and GROWTH. Every business in order to survive they need to generate cash and in order to grow they need to generate brand awareness, great products and cash.

The report was very clear, they get their major cashflow influx from the new products. And in my humble opinion that is the key to survival AND success.

CASH GENERATION ACTIVITIES

SPEAKERS

B&O is specially well known for speakers and there is no doubt they do great in that area. Probably adding another subwoofer in between the BL11 and BL2. Also another great addition would be an speaker between the BL 9 and the BL 3 with ALT.

TV/VIDEO

TVs is a market which is very profitable for B&O and the fact that the BV10 is a great success is due in my opinion to two main factors: great desing and "affordability"(for B&O standars). And that is the key for this segment. TVs lately are more and more a commodity and they can't charge as much as they did in the past for a commodity. But there is still a lot of room for good design, features and customization, all of them very strong selling points for B&O the key here is they need to review their pricing strategy and make sure that the big aspirational market as in UK still can change their TV in a 3 to 5 years time frame without even looking at other brands like LOEWE.

In terms of new products the posibilities are endless but it comes one to mind that could be a big mid term success: a beocenter with bluray AND internet downloading capabilities (or a new product equivalent). I say mid term success because eventually downloading movies probably will become the standard. And that is a feature that they want to include in the upcoming TVs.

TELEPHONES

The truth is this market will eventually disappear. More and more people tend to use just their cellphones and even Skype is a huge competition for the land lines.

AUDIO

The line of products is key and they seem that in the digital era they lost their compass. They are very off here and they quickly need to react. The BS5 is beautiful but is a very expensive Apple TV / Ipod with even more limitations. Here is where they need to work harder and really nail it with a succesful product. The BS5 encore I say that is getting really close but still with some issues (based on the little know information about), like no apple lossless, no affordable enough (yes it needs to be more affordable in order to get a critical mass-the minimum amount required to maintain a venturepoint-).

As for new products I would look at Sonos and make it beautiful, design oriented, reliable and with some B&O "magical touch". Another product that could be a success would be turntables, yes they are alive, kicking and coming back and many companies are taking advantage of this trend why not b&O who was very successful in this area.

One more thing APPLE is here to stay and they are no going anywhere but up. So join them, yes make the products more APPLE friendly after all they are the owners of a huge portion of the digital market and B&O will not keep ignoring this ( late but here is the fact of the new dock, which is late to the party but a strong sign about the realization from B&O that they need to join the party).

CAR AUDIO

Like it or not this strategy is brillant. The fact that they are compiting with a huge marketing engine like bose and beating them to the punch speaks very well about the strong will and fight capabilities of this division. I hope it is contagious and spreads to the whole company.

It creates brand awareness, cashflow and possitive asociation (bmw is good quality and reliable>b&O too; Aston is exclusive and elegant>b&o too; etc).

HOSPITALITY and R.E. DEVELOPMENT

New hotel and r.e. developments are still suffering of the huge financial crisis well known by everybody. No signs of growth here for the short and mid-term.

AUTOMATION INDUSTRY

More alianzes and integration with key players in this field is very important. Little by little home automation is less of a luxury reserved for the extremely rich and more and more upper middle class and middle class are having access to it. Personally I don't like their product but I think Control 4 is a good example of this.

BRAND AWARENESS ACTIVITIES

PRODUCT PLACEMENT

Let's face it B&O is a small company and advertising and PR costs can skyrocket. Based on this budget limitation I still think that their strategy of product placement in movies (ex. Batman) and tv shows (ex. Entourage) is brillant. They just need to duplicate or triplicate the efforts. I know nothing about the cost of this type of campaigns but my guess is they are way much more affordable than any type of graphic(magazines) or tv campaingn.

EVENTS SPONSORIGN

It is another great way to obtain affordable publicity. Probably not the type of events that are the most expensive la Formula 1 but a Rolex type of event like: Polo matches, skiing, yachting even tennis.

Another great option is sponsoring or organizing events for fundraising and charity which generate cheap publicity, buzz and good karma

PRODUCT EDUCATION AND AWARENESS

This area is key. Not everybody really knows that if they want surround sound with a B&O tv they just need the tv and the speakers without an AV receiver like in every other tv out there. This feature is key and not everybody knows about it, specially in the US market which by the way is a completely different animal.

Not everybody knows that the Beo5 correctly programmed is the best universal remote control, compatible with a huge among of products like lutron and a big list of other third party products. In the other hand compared with other remote controls is still "affordable".

Not everybody knows that the products come with such a good warranty.

U.S. MARKET

The potential for this market is very big but first they need to realize that the american way is completely different than the european market. Somehow educate that bigger is not better and sometimes less is more is key. An idea, agresivelly ridiculize showing some other products, like a HUMMER (Huge and very ineficient) and an AUDI (elegant, efficient, sexy).

For the US market customer service is key. A large amount of product launches and maintain certain affordability in the products is really important. The american market is use to throw away and buy new fairly often, take advantage of it.

BENCHMARKING

The obvious candidate is Apple, but there are also many companies to study for inspiration and knowledge: Loewe (product customization/design more affordable), Sonos (bullet proof wireless integration), Audi (stylish, avant garde design, less is more, "affordable" luxury). And the list can go on forever.

Anyway I just hope that things improve for B&O in terms of their figures and somehow put together all the great things they have, and find thier way to success.

B&O has had a strategy in the US of working with large developers, doing huge installations in housing areas. That's not good if what you want to do is create a feeling of exclusivity for the brand. "All the units in this building/this residential development area, are equipped with B&O, Carrier Air Conditioning and Rockwool insulation."

http://www.bang-olufsen.com/property-developer

Ever wondered why a Mercedes looks like this now? They became so popular with Taxi-fleets that it became detrimental to the brand - people wanted something other than what they could see at the taxi stand, when they wanted to celebrate their success. So Mercedes made it look as if there was less room in the back for passengers, compared to the boxy look they had when the brand became strong.

B&O sales down 27% in the UK, whilst at the same time B&O is perceived as the 5th coolest brand (4th if you wrap the Apple products together).

Discuss.

Graham

Please understand that I'm not applying a value judgement to this move upscale, but I'm also not a wish-thinker. The material reality is such that developing local relationships with architects and designers and cultivating a strong referral network in these trades is a 100% necessity to staying profitable on a store by store basis. I am not saying that there's no such thing as a retail customer, but even as things start to loosen up after the recession of a few years ago, the retail consumer is just not looking to make an investment at our level in numbers sufficient to keep the store, the market, and the brand afloat. Just as restaurants realize that they can go from "just squeaking by" to "making a healthy profit" by introducing catering by leveraging existing assets, so to must the B&O shop-owner realize that they must expand beyond the end user to a wider variety of outlets. 

TripEnglish:

Please understand that I'm not applying a value judgement to this move upscale, but I'm also not a wish-thinker. The material reality is such that developing local relationships with architects and designers and cultivating a strong referral network in these trades is a 100% necessity to staying profitable on a store by store basis. I am not saying that there's no such thing as a retail customer, but even as things start to loosen up after the recession of a few years ago, the retail consumer is just not looking to make an investment at our level in numbers sufficient to keep the store, the market, and the brand afloat. Just as restaurants realize that they can go from "just squeaking by" to "making a healthy profit" by introducing catering by leveraging existing assets, so to must the B&O shop-owner realize that they must expand beyond the end user to a wider variety of outlets. 

I can see the argument for pushing a B&O 'System' approach and that retail units who can provide a good whole house/ hotel system service will be more likely to survive. But I'm not sure that the recession 'of a few years ago' is not still with us though, and maybe about to get a lot worse!

B&O may have survived the late 20's early 30's recession with a unique product (mains transformer replacing battery driven radio) whilst at the same time diversifying into film recording and having extremely expensive/ desirable gramophone systems with few competitors at the top end of the market. (Assumptions from  'Spark to Icon'). Do we really have equivalent products/ strategies to survive the current recession? Surely there are very competitive whole house systems on the market...... and major producer technology continues to advance and drive costs down. Off topic, but I've just bought a 12 mega pixel camera with GPS and very sophisticated anti shake technology for 12X zoom for just over £200 (Lumix/Panasonic/Leica)! The reasons for going for Hasselblad diminish by the day. Doesn't B&O face the same problem?

Graham

Their products are too expensive and not technologically advanced enough for the money, bno's r&d team work at a glacial pace and things have just passed them by. They really have got to react a lot quicker to have any chance in the future.

I was considering trading my old avant in for a nice new bno tv , the 7/40 looked perfect until I found out it was £6k without a speaker or stand , yes six thousand pounds for basically a screen and a few connections on the back. 

Sorry , but that's just plain ridiculous , especially when Sony etc are bringing out some superb looking sets with everything but the kitchen sink thrown in ( google tv etc , 3d ) for less thana third.

Speakers included.

Flappo,

I agree with you, the TV sets are left behind a bit, but also because of the quick advancements in technology for the last 5 years or so.

I think that the B&O audio products (except Beosound 5) are great value for money. Why shouldn't the TV sets be the same?

Nevertheless  I'm hopefully buying a new Beovision 10, soon...