Multi-mode devices could be next consumer tech boom, says Ashok Nair, Lenovo

Ashok Nair, Director – Home and Small Business, Lenovo India, talks to us on the innovations in consumer hardware; disagrees PC is dead; and has a suggestion for channel partners and store owners in the consumer space.

What is your take on the commoditization of consumer and SMB hardware?

I wonder whether or not commoditization is happening in the first place. The level of innovation that’s been happening in the consumer space is amazing – the product innovation, especially. Look at the innovation that’s happened in the smartphone, tablet, and PC segments. With such innovation that is driving the industry, am not sure if we can call the entire segment as commoditized.

As far as innovation is concerned, Lenovo has always been in the forefront. A couple of years ago, when there was talk of the PC dying, and competitors were talking of possibly exiting the market, even at that time Lenovo was investing heavily into R&D, and it is showing in the kind of products we are coming out with. The level of innovation that Lenovo has brought in is amazing.

How would you react to the ‘the PC is dead’ statement ?

It is a continuum (of products and usage) that is happening. We can’t just say there are different devices in different categories (use cases). Everyone uses multiple devices for fairly similar activities. With a smartphone, I would surf the Internet consuming entertainment and also use it for a little bit of creation. With a PC – large screen – the sort of entertainment I would be consuming would be slightly different, and I would be doing a large amount of creation there. So, it is a continuum of products that you will be seeing in the consumer space, and the advantage that Lenovo has as an organization is that we are into it across all product devices.

How has the role of channel partners changed with the coming of e-commerce and direct selling?

Am not sure of direct selling happening much in the consumer space; ecommerce is the new animal in the marketplace. There is a lot of concern around it that the traditional channel has. However, even in mature markets, the share of ecommerce players is 20-25%. So, it’s not as if they have completely wiped out the traditional channel. A traditional channel would always have a very strong play.

Even today, with all the noise that is created (around ecommerce), many peoplestill prefer to go to a traditional channel and fulfill their requirements. They might surf online, they might do their research online, but may still prefer to go to a traditional outlet and fulfill their requirements.

We are expecting to see the emergence of what is termed ‘omni-channel’ – an online to offline model. A customer could search for a product online and get excited about a product, but it would be easier for him to fulfill it in an offline place. We could create excitement for a product in the online space, and fulfill it though the offline space.

Instead of viewing the entire ecommerce and online space as a competitor, or as something that would disrupt the entire business, we need to figure out how we can leverage it in a manner that could continue to provide excitement to the partners, to the customers, and service the customer requirements faster.

What do you think will drive the next boom ?

My sense is that it would be the multi-mode product innovation that would drive it. Here, the customer can actually have a two-in-one device – a device that could serve as a laptop and as a tablet. The further innovations that will come here is what will drive the business, and that’s precisely the reason we are focusing so much on the product front.

Channel strategy for SMB and consumer markets

We have created a separate team that that will focus on the medium-business and large enterprise. These will have orders that are back to back, which will be front-ended by the channel partners. We have created a team that will engage with the partners, and support them for them to go to the customers and fulfill their requirements. Now, with the addition of servers and other hardware, the partners have a larger portfolio to talk to these customers.

There is a different team that looks at the SOHO and the small business. This market will be catered to by our distribution segment. The team works with the regional distributors in ensuring that their coverage maximizes.  The strategy that we have adopted in separating these two and having different teams working on it has worked well.

On the consumer side, we have had a very clear and strong channel policy for the last many years. We have a very strong distribution network. Few years back, we started setting up an exclusive retail format, and both these strategies have worked pretty well.

Across all these businesses, our fundamental philosophy is what we call a ‘core channel philosophy’. Simply put, a core channel philosophy means, we would identify a set of partners who are core to our business, and we would grow with them. We won’t look at it with the philosophy of de-risking from relying on one (or few) major partners. We believe that if we go deeper with the partner, the partner would also benefit, and we would grow together. We provide the support that each requires from the other. This allows us to take great advantage when the going is good, and provide the buffer when things are bad.

What can channel partners to do cater to today’s informed customers?

One of the biggest changes over the last many years is the amount of information that a customer has when he / she walks in to a store. About 10 years back, a PC would have been bought with a customer walking into a store with a configuration written on a piece of paper that possibly would have been given to him by a friend who has some knowledge about PCs.  Today, the customer walks in armed with knowledge. He would be standing at the store looking for reviews of the product on his smartphone.

The channel partners would need to be really strong in their product knowledge, as to what makes one product different from another product. The channel partner should be able to add value beyond the information that the customer would possess through the Internet. The value that the partner can add is by suggesting the right type of product for a particular kind of user. Today, partners are not trying to find out who in the customer’s family might be using the product. Ideally, on the basis of who is going to use the product, they should be able to suggest the right product, along with reasons. This transition is what I think many of our partners might need to make.