Retail Leverage Tribe Has Spoken – Our Ideas For Garmin

By Ben Smith

Last week we asked “How Can Retail Leverage Help Garmin?” We didn’t pretend to have the answer, but we did share lots of background on their current situation.  We asked our readers to share any ideas/thoughts they had regarding Garmin’s dilemma and we were ecstatic with the response.  Combine that with some “new” news from Garmin in the last couple of weeks, and it begs an update.

READER FEEDBACK:

1) @retailxpert, our favorite “Retail Expert”, aptly handled on twitter ,had this suggestion regarding Garmin’s nuvifones:

“Garmin should license out core technology & pursue licensees to expand their line-up.”  She also noted that they are probably already doing this.

2) @susanschaffer A marketing consultant with 15+ years of experience in the digital camera industry, @slschaeffer , sees parallels to Garmin’s PND’s and mobile phones to another industry near and dear to our hearts:

“Reminiscent of what camera companies are going through re. mobile phones!”

3) @drtvguru, the founder & CEO of a DRTV agency, and is an expert on innovative uses of DRTV to build brand and drive sales, sees a positioning opportunity for the entire brand/portfolio, but with words of caution:

You can see his full comments on the original post, but I’m summarizing here: Embrace the single purpose nature, with an “anti-tech” positioning.  Garmin has already carved out very nice target markets, in part due to their single purpose nature (outdoor, fitness, marine, aviation) embrace the single purpose.  Caution – tech press tends to crucify anti-tech because they’re not “sexy” enough.  It would require a very clear understanding of what the target consumer needs and how to find those people. And, it probably requires a very aggressive campaign to get the tech press to grudgingly accept that anti-tech provides important solutions to human problems.

4) @rdsolimeno, the President of a consulting firm, says that “Open Innovation” could be the answer.

“I see the challenge before Garmin and their nuviphone line and think there is opportunity in giving end users more choice than iPhone or blackberry.  There is both risk and reward available for those companies willing to dip their toes into “open innovation.” By opening part of the product architecture up to innovators around the world with challenges to develop both ideas for new features and to develop them – goes in a direction that neither Apple nor RIM dare to go. They key word is “daring.” The innovation comes from the market itself.”

RETAIL LEVERAGE WEIGHS IN: With the luxury of seeing these great ideas roll in from our community, @retailleverage has the benefit and privilege of building on the ideas that were shared.

Licensing: the genie isn’t going back in the bottle regarding smart phones and GPS, so licensing is a way to exploit it.  I agree with @retailxpert that they are probably already doing it.  It could be an advantage for a vendor, multiple vendors, or mobile network(s) that their GPS is powered by Garmin.  On a related front, I have heard lots about Tom Tom’s app for the iPhone, but haven’t heard a peep about Garmin doing this.  I think they should have their own GPS app for smart phones, without worrying about the impact of their yet to gain traction nuvifone line.

What you can learn from mobile phones integrating cameras: yet another genie that got out of the bottle, yet the digital camera market has still sold approx. 70 million units in the last 2 years.  The camera functionality in phones is one of convenience, and IS becoming increasingly useful, when paired with a smart phone where the photos can easily be shared.  Camera phones are taking an increasingly larger share of casual snapshots.  In turn, the digital camera market is moving towards specialization and advanced features.  Camera phones will not replace DSLR’s, but the picture is blurring when it comes to point and shoots.  The manufacturers that win in point & shoot will have to offer convenience and specialized functionality that smart phones will not be able to provide.

Embrace single purpose positioning: What a great segue from the previous parallel with digital cameras/mobile phones.  For their traditional PND business to remain viable, they should look to their outdoor/fitness, marine and aviation businesses.  These are highly profitable, dominant in their categories that have succeeded with a relentless focus on the end user’s need.  I don’t think (or hope) that there are pilots or boaters out there navigating their vessels with an i-phone.  If so, get me a life-preserver.  I also believe that their mainstream success was driven by PND’s as an alternative to the more expensive in-dash screen in autos.  There has to be a combination of consumer cost/benefit and learning curve to where in-dash screens in autos are standard in every car.  Garmin has the technology to license to ensure that it can power a majority of these manufacturers vehicles.

Open Innovation: News flash – location-based services are going to be huge 🙂  Garmin has the technology and a trusted name that could provide the tools/kits to application developers to build countless valuable apps to leverage location data.  There could be multiple viable iPhone applications based on Garmin technology & know-how, but Garmin would have to be willing to let this occur while they are growing their own smart phone lines.  Whether on their own, or in the hands of others, Garmin could be the company that puts the “mobile” into smart phones.

KEY TAKEAWAYS: Just as we had the opportunity to listen to the ideas our readers shared, Garmin has the luxury and opportunity to listen to its customers.  Millions of people count on Garmin products every day, and with the exception of Michael Scott in the office, rarely are they pointed in the wrong direction.  I believe Garmin can find its own right direction by listening to its customers.  I’m sure they are already doing it at a consumer engagement level via social media.  Whether those ideas have an impact in the board room or lab is anybody’s guess.  With that in mind, I’m going to send a link to our articles to @jakesjournal , the most visible member of Garmin’s corporate blog team, to share what our community has to say and hopefully we’ll help in a meaningful, non-billable way.

As for our own businesses, this experiment has only reinforced the importance of listening to consumers.  Reviews, social media, surveys, focus groups – the challenge is finding ways to harness the power of the information you gather, or that is shared freely for you to take or leave.

UPDATED NEWS/RESOURCES ON GARMIN / PND MARKET:

• Garmin 2009 Q4 & Full Year Earnings Release (PND down big, outdoor/fitness growing, 1st gen nuvifones disappointed, but 2 new ones launching this year, aviation & marine down but margins still strong).
• This review by cnet gives hope that one of the new nuvifone models can succeed.
• From the CE Outlook blog, Tom Tom admitting that industry-wide U.S.  sales could start to decline by mid-2011.
• Nokia’s Free GPS Is Already Shaking Up PND Market
• See for yourself about Nokia’s Free Forever GPS for their customers