China Top US In Green Product Awareness

April 2, 2010

Consumers in emerging countries, including China, are more environmentally conscious than those in developed Western nations, a surprise observation that runs contrary to common wisdom.

The finding was the key takeaway in a recent Accenture survey of eight countries, including Germany, France, the United States and India. In all, the willingness to favor green products was greater in less developed economies.

Researchers said the difference appeared to be the result of the greater exposure to pollution and environmental degradation. In developing nations, such as India and China, the immediacy of air and water pollution is leading shoppers to select products with a smaller environmental impact.

“Consumers in difference places have a different perception of the harm to the environment that pollution can cause,” says Kumu Puri, managing director of the consultant’s consumer technology practice. “The numbers are so disparate.”

Overall, 84 percent of consumers in emerging countries said they would be willing to pay a premium for green consumer electronics – televisions, computers and cell phones. Only 34 percent of consumers in mature economies were willing to pay extra for electronic gear that uses less power or is easily recycled.

The highest level of environmental concern was found in China. Ninety-eight percent of consumers were willing to pay a premium. India was second with 84 percent, followed by Malaysia.

Only 43 percent of consumers were willing to shell out extra in the United States and 42 percent in Germany. Almost half of Japanese consumers (49 percent) said they would dig deeper into their wallets.

Puri said the findings uncovered a fundamental difference in green attitudes. What’s more, the difference in China may be a sign of a trend gaining steam. They survey was conducted online, meaning that only the most affluent consumers were able to take part. The rest of the nation may be getting ready to follow suit.

Accenture surveyed 16,000 consumers last fall for the research.


M&A Shoot Out Seen For The Datacenter

March 23, 2009

Three broad-shouldered tech titan have their sites on the datacenter.

They all have plenty of money in their pockets. And they all have plenty of desire to capitalize on the big changes coming to way corporations manage and store the tons of digital data they create.

Cisco, IBM and H-P have the datacenter in their sights

Cisco, IBM and H-P have the datacenter in their sights

So it is not hard to imagine a coming acquisitions binge as they try to out-position each other.

The heated battle went public last week when Cisco Systems announced its data center strategy and the introduced a blade server, taking it directly into the path of IBM and Hewlett-Packard.

Cisco, more so, raised $4 billion in February, which analysts believe it will use for mergers and buyouts to supplement the partnerships it is forging to strengthen its product portfolio.

It may not  be alone. IBM is said to be considering an acquisition of Sun Microsystems, with its tape storage and other datacenter businesses.

Meanwhile, H-P last year acquired integration and consulting firm EDS, dramatically increasing its capabilities in corporate technology services.

So, which companies are most likely on the block? According to UBS analyst Nikos Theodosopoulos, possible candidates include Juniper Networks, Brocade Communications Systems, Netapp,, Accenture, EMC, VMware and BMC Software.

Cisco could easily be the most aggressive.

However, “we view the convergence of storage and networking in the data center as at least two years away,” says Theodosopoulos, with the recession “the lack of confidence on unified standards pushing out this market.”


Older Americans Embrace Technology Faster Than Younger Ones

March 22, 2009

The assumption has been that younger American use technology more readily than their older, more technophobic peers. This seems to be changing.

Baby boomers (45 years and older) are rushing to catch up to generations X and Y at an accelerating pace. In doing so, they are bring the digital age to the broad swath of the American population like never before.

According to a survey from Accenture, baby boomers sharply accelerated their adoption of digital technologies over the past year while members of Gen Y (18 to 24) went into something of a holding pattern.

The study found boomers embraced new technologies 20 times faster than their younger country mates, with special cravings for social sites, podcasts and blogs.

For example, boomers showed a 59 percent increase in their willingness to connect on social networks, compared with only a 2 percent increase for Gen Y. They demonstrated a 67 percent jump in reading blogs and listening to podcasts compared with essentially no increase for Gen Y.

This same trend held true over the past year for posting online video, playing video games and listening to iPods.

In other words, the technology gap between the young and old is closing.

The finding from the November and December survey of 3,000 online consumers caught Accenture executives by surprise “The acceleration by baby boomers struck us,” says Kumu Puri, Accenture’s senior executive of its consumer technology practice. “It was the rate of growth I found surprising.”

So what is the explanation for the shift? Perhaps older consumers want to stay relevant to the workplace with the assumption they will have to work until later in life, says Puri. They also might want to stay up to date with the nation’s changing social fabric.

On the other hand, the features in some of these technologies might not be changing fast enough to keep the interest of the young, adds Puri. As if to prove this point, Gen Y’s interest in the rapidly changing arena of mobile data technologies was greater than that of the boomers.

As well, saturation likely played a role. Gen Y’s adoption of social networks has slowed, but then 82 percent of them already belong. Their interest in game consoles is down, but then 70 percent already own a console.

Perhaps the survey’s most important message is to technology companies. “We think it’s going to require them to think differently about their businesses,” says Puri.


Technology May Be More Recession Proof Than Other Industries

January 10, 2009

The economic downturn and slow consumer spending has been cruel to automakers and retailers. Even manufacturers of the latest, cool technology gadgets have suffered in the malaise.

What? Give up my satellite TV?

What? Give up my satellite TV?

But consumer technology may be more recession proof than other industries, according to a survey from Accenture.

Even in a prolonged economic retrenchment only 9.7 percent of consumers would give up their cell phone service. Even less – 9.3 percent – would cancel pay-per-view or on-demand television services.

Other technologies fare even better: only 3.2 percent of people would cut off home Internet access and 2 percent would turn off satellite radio.

“There are bright spots in the (consumer electronics) market,” says Kumu Puri, senior executive in the firm’s communications and high-tech practice. “Consumers value what the industry provides to them.”

Accenture surveyed 3,000 people in the U.S. in December. Here are several other product categories and the percentage of respondents who said they would cancel services:

*Cable or satellite TV: 8.5 percent;
*Local phone services: 8.2 percent
*Long distance phone service: 6.9 percent;
*High-definition cable or satellite: 3.7 percent
*VoIP service: 0.9 percent.


Consumer Electronics Returns Are A $13.8 Billion Problem In The U.S. Likely To Get Worse

December 16, 2008

They are the six little words that can spoil an electronic vendor’s holiday.

After months of design meetings, weeks of in-store discounting and last-ditch advertising blitzes, million of crystal-clear flat-panel TVs, GPS locators and feature-stuffed smart phones have found their ways under American Christmas trees

Returns can be 5% to 6% of a vendors sales

Returns can be 5% to 6% of a vendor's sales

Now comes the verdict merchants fear most: “I want to take them back.”

Each year, $13.8 billion of electronics goods is returned to manufacturers, retailers and communications companies in the U.S. With the global downturn wearing on consumer spending, the total may be down slightly this year.

But on a percentage-of-sales basis, it could rise, with devastating consequences for companies already living on razor-thin margins.

“I believe the industry realizes this is a significant problem,” says Brian Sprague, senior executive at Accenture, who calculates the annual returns number.

Sprague says returns can account for 2 to 3 percent of a retailer’s sales and 5 to 6 percent of a manufacturer’s sales.

Among the products most likely brought back are mobile phones (especially smart phones), GPS gear and wireless networking equipment. High-definition televisions and computers also make the roundtrip to stores are a fairly brisk rate.

About one-quarter of consumers return because a product doesn’t work or because they perceived it doesn’t work. Only 5 percent of products actually have defects, says Sprague.

Nearly half of returns come because items don’t meet buyer expectation while the remaining consumers developed some sort of remorse for purchasing what they did – a feeling more buyers could have this year with money increasingly tight.

Sprague offers a list of best practices for companies experiencing returns. Many firms are doing some of them and top companies are doing many of them, he says. But “some companies are saying our margins are so thin we can’t put (new procedures) in there,” he says.

On his list are: 1) use graphical information and illustrations on a Web site to educate buyers about the use of a product; 2) put more product experts on consumer call-in lines; 3) put educated staff in stores to help with installations, data transfers and the like; 4) add to the packaging a request to call with problems or questions; and 5) provide displays at the point of purchase on how a product is used.


Online Video Advertising Budgets Appear To Be Holding Steady, But Market Consolidation Could Be On The Way

November 13, 2008
One or two aggregators will emerge, says Greg Douglass

One or two aggregators will emerge, says Greg Douglass

The online television and movie market appears ripe for consolidation.

In the next year, one or two big aggregators of streaming Internet content will emerge, said Greg Douglass, global managing director of media and entertainment at Accenture. “At most, there will be three or four at the end of the day.”

Examples aggregators are Comcast’s Fancast and Hulu. But these sites could see competition.

At the same time, online video advertising will increase, despite the downturn, and new forms of advertising could become successful online.

“Ad supported video will continue to grow and will be largest part of the market,” Reed Hasting, CEO of Netflix, said at the NewTeeVee conference in San Francisco. As ad prices rise, broadcasters will need to show fewer ads per episode.

Executives said that so far ad budgets for online video appear to be holding steady. Budgets are being cut for traditional television advertising, but not for digital initiatives, said Douglass.

And traffic appears to continue to grow. In the past six weeks, the online audience for streaming content at Fox Broadcasting has rocketed ahead, said Hardie Tankersley, vice president of online content and strategy.

Douglass said broadcasters might benefit by placing retail ads – such as ad for a boxed set of a program’s first season – at the bottom of the display screen. Use the current video content to drive sales, he suggested.


Software Discounting Expected To Worsen In The Fourth Quarter; Accenture Looks At Ways To Ease This Pricing Practice

November 2, 2008
dont give away too many software add-ons

Fight discounting: don't give away too many software add-ons

It is no surprise that enterprise software sells for 80 percent or so off list price. With end-of-quarter deadlines looming, vendors do most anything to close business.

What may surprise some is the extent to which discounting occurs this quarter as demand slows and software makers scramble to keep sales from plummeting like the Dow Jones Industrial Average.

With two months remaining in the year, industry executives believe that cautious customers will bargain harder for lower prices, according to sources close to the business. “They are anticipating downward pressure on deals already in the pipeline,” agrees John Hanson, senior executive at Accenture.

Hanson says sales made at 60 percent or 70 percent off list price are not uncommon in the industry. The business has had a difficult time weaning itself off these discounts.

But vendors don’t necessarily have to put up with the price cuts, says Hanson, who co-authored a study outlining how companies can shore up pricing at a time of slower growth. Often a developer will seal a deal on a product upgrade by throwing in a couple of its latest applications for free.

Instead of giving away these new and frequently valuable applications, developers should begin holding the line on pricing where it makes sense, he said.


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