Unlike most of my pieces, this one was triggered not by the business news, but rather by pure affinity towards the Bang & Olufsen (B&O) brand. As I often caveat my musings – it’s easy to produce ideas in the comfort of one’s home, sipping Lapsang to Chopin’s nocturnes, unburdened by market dynamics. It is, however, also true that, as a consumer, I’m allowed to share a few hopes in the spirit of extended feedback. With that in mind…
- Tiered product subscription to grow revenue without eroding brand value
- Second life product subscription – more affordable and greener
- Partnership with iconic cultural landmarks for cheaper, yet singular, flagship stores
- Bring digital natives into high earning households in exchange for unique content to complement B&O hardware
Affordable & flexible
B&O could move from product retail to product subscription, offering customers access to tiered packages ranging from a pair of headphones, to complete resolution of all family media hardware needs.
For a monthly fee, customers would have access to products (e.g. headphones), exchanging them for new models as those become available. It could increase new model adoption as well as B&O revenue, due to both – increased product affordability as well as consumers not waiting for the perfect product (e.g. wireless earbuds with 12 hour battery), but accepting something that’s good enough (7 hour battery), knowing they can upgrade when the better option is available.
Increased affordability and faster adoption could, in turn, generate more customer feedback and word of mouth promotion – as consumers demonstrate their new gadgets on social media.
Product upgrades could be organised in physical stores (for additional benefits) or within a remote service ritual. Items returned could be prepared for second life or recycled.
- Continuous & deeper relationship with consumers, ongoing opportunity for engagement
- Ongoing & more predictable revenue
- Increased product affordability without price reduction or brand erosion
- Faster new product adoption and feedback / word of mouth promotion
- Automated product recycling, good for the environment and B&O green credentials
Used products – cleaned, checked and approved for second life, could be offered for a lower monthly fee within the same general subscription experience.
Consumers could move between tiers, up- and downgrading upon cycle end or be automatically charged a lower monthly fee after subscribing to a new product for a set period of time.
The more inclusive, second life offering could drastically expand the customer base without eroding brand value. It could be positioned as an (even) eco friendlier alternative – a way to extend the lives of existing products.
Needless to say, B&O could follow the wealthy consumers’ interest in sustainability, overtly shifting towards green production – both in packaging and product design (e.g. use green steel). A bold green shift would require transparency (e.g. product carbon footprint on boxes) and industry-leading sustainability goals.
A Modern flagship
Flagship stores, done well, offer rich consumer experience, but typically require substantial investment, beginning with renting and maintaining a large site in a premium location. While the functional touchpoints like service counters and stockrooms may not call for much space, the low-yielding ‘experience’ – does, and may be too heavy a lifting for a niche brand.
B&O could leverage its brand capital to partner with iconic cultural landmarks that would trade space in exchange for novel, artistic consumer experiences.
For example, B&O could rent a transactional space at Tate Modern, using the gallery as experiential playground – inviting B&O customers to wander the maze of rooms for audio discoveries, testing B&O products along the way. In return, Tate would offer its visitors unique B&O acoustic adventures as part of the gallery experience.
B&O may be an interesting partner to digitally native services, looking for a way to get physical with high earning households. In the post-COVID world, Airbnb may become the preferred hospitality option of the wealthy – as requiring less contact, while offering a higher degree of local flavour.
A partnership where top Airbnb properties would be outfitted with B&O hardware would make a good brand introduction. On top of that, renters could be lent B&O headphones to run special guided city experiences.
Loyal Airbnb users, who’d subscribe to B&O speakers and headphones, could receive exclusive digital content outside of holiday trips – e.g. unusual discovery safaris in their hometowns.
Something blatantly obvious, but impossible to omit – a physical anchor in high earning households could also be of interest to Spotify. While Apple is, for a variety of reasons, the default supplier to the wealthy, B&O subscription may offer rare leverage to approach the otherwise iOS locked base.
If B&O invested in green credentials, a partnership with Spotify may also take an ideological shade as their CEO and co-founder recently backed what’s expected to become the world’s largest green steel plant.
As wealthy consumers follow the rest of the world into brand disloyalty and Apple continues to expand across categories, further locking high-net-worth audience, attracted by the relative privacy of iOS, B&O may have little choice, but to shock the market with bold moves (ideally, before Apple buys Sonos). On the positive note, the ingredients for the B&O strength serum are there: brand reputation, growing consumer disdain for throw-away products and zeitgeist where a Porsche subscription is the norm.
Can life get any better?