Accessories are a crucial money spinner in the mobile industry – in the UK market where subsidies on handsets are significant, the margins that exist on accessories are crucial. The profit that comes from an iPhone is spread over two years while the money made on a hands-free kit is instant.
The GfK Retail Reports frequently find that accessories make more money for UK mobile retailers in the slower months of the year. The category has also become more valuable as the popularity of high-end headphones, such as Beats, has grown. Factor in that the developing categories of wearables and connected home products fall loosely within this bracket and the importance of accessories becomes even more fundamental.
More features, more value
There has always been a strong market for ‘essential’ accessories, products such as chargers or headphones, which usually come at a reasonably low price and can be manufactured by a large number of brands. In the accessories space consumers tend to be less brand conscious, opening up the market to a range of manufacturers that extend beyond the traditional hierarchy.
However, as the category has continued to develop, it's no longer enough to only sell cheap, colourful accessories, you need a range that reaches into the mid to high tiers. One company in the process of broadening its range is the Santok-owned company STK Accessories. Its business development director Henri Salameh (pictured) explains: ‘We’ve developed strategically over the past few years, when we first launched STK we had two objectives – to be a premium product to compete with the likes of Nokia and Motorola, but also to be affordable. This is why we categorised ourselves as “premium affordable”.
'We’ve kept that for 23 years, but now we believe there is an opportunity in the mid to high tier, particularly the middle segment. It’s a space that we believe still has room to play in. There’s more that you can do with the technology. We can explore products we’ve never explored before. It’s particularly important for the consumer. In the entry-level space there is only so much that you can do.'
The right label
Whenever a company enters a new segment of the market, it always has to assess whether its current branding is appropriate for the new sector it is entering. In the case of STK it decided that the mid to high section of the market would need to carry different brand identity.
'We’ve undergone a full brand refresh – today we’ve introduced a new category; the mid to high tier. This is a specially developed and designed range of products with a distinct colour scheme based on the work of Andy Warhol.
'One of the new categories is the active range; a new trend is using smartphones to improve health. We’ve looked at it differently, our users are active – they like running, camping and going to festivals – so we’ve created a number of products with this in mind.
'This new category of products is more targeted than our range of essential accessories. These focus on the technology side and aesthetics of the products. We’ve kept some essential accessories but 80% of the range is innovation based. We recently took on a new director of innovations and we have started an innovation lab in Israel.
‘What you see now is phase one; we’ll be announcing phase 2 shortly, but it will feature some game-changing products that we expect consumers to be really excited by. Although we’ve made this shift, we’re renaming the essential accessories range STK 360, which comprises thousands of essential accessories. In the developing markets STK 360 is still a large part of the business, however, we’ve noticed that these types of products have reached saturation point in these markets.
'Everything is in mass production and will be stocked this month. Globally we are working with our distribution partners, as well as working directly, to get our products to retail. In the UK we’re working with Amazon and we have another high street partner that will be announced later in the year.'