#AsiaeCommerceAwards highlight: Behind Razer's product innovation

 Razer is the world’s leading lifestyle brand for gamers. Despite having successfully listed on Hong Kong stock exchange in 2017, the company’s culture and spirit is that of a start-up. With a few business re-engineering processes that improved the fulfilment turnaround and returns management speed for its customers, Razer improved its Net Promoter Score by 30% between 2019 and 2020.

With a dedicated team and colleagues who placed their heart and soul in making Razer the best products and platform that it can be, coupled with its agility to respond to the ever-changing consumer behaviour and trends in the industry, it won the silver for Best in eCommerce (Brands) – Electronics & Gadgets at MARKETING-INTERACTIVE’s Asia eCommerce Awards 2020. 

Challenge

Without a doubt, the COVID-19 pandemic has significantly impacted numerous industries and the gaming industry is no exception. Whilst the gaming industry suffered the least from the pandemic as compared to other industry, the industry witnessed growth in the first half of 2020.

Despite the growth in the gaming industry, Razer, which predominantly sold its gaming hardware and software through retailers, faced challenges in growing their business such as:

• Closing down of retail stores;
• Competitors’ products were being sold at a much lower pricing;
• Lower output from certain factories.

Undeterred by the challenges, Razer saw this as an opportunity to grow their Direct-to-Consumer (D2C) business through its very own website.

Strategy

To kickstart the journey towards the growth in its D2C business, the team devised four creative approaches to their product offering – new products in existing categories, new products in new categories, Razer.com product exclusives and new service/digital products.

1. New products in existing categories: To grow Razer fanbase and leadership in the gaming sector, it is key to keep the existing range of products up to date with refreshes, new innovative products that customers are looking for.
2. New products in new categories: Calculated bets and investment were made to ensure that Razer stayed relevant in the evolving life of gamers, and thereby increasing relevancy and sales through the launch of products in very new and fresh categories.
3. Razer.com product exclusives: Building onto the concept of exclusivity, Razer created products and variants that are exclusive to its very own online store.
4. New service/digital products: Razer made the decision to expand into the realm of digital goods and services which gave consumers a peace of mind as it enhances customer satisfaction.

 Execution

In order to allow inventories to be bought where the customers were shifting to buy during the Covid-19 pandemic, Razer rerouted its products to move products that were originally set for sale in retailers, to be sold on Razer.com instead. The robust global inventory planning boosted its D2C business during the pandemic. To support its four creative approaches, Razer produced several innovative products that were well-received by its consumers. 

1. New products in existing categories
   Kraken Kitty Quartz series was created to cater to the emerging female customer segment and it became an anchor in colorway in Razer’s product offerings. Razer also created a series of Licensed and Collab Products where character inspired variants were created for some of the most popular peripherals as it gained popularity among gamers. While it started with gaming characters (e.g. Gears of War, Overwatch), it has also evolved to featuring more mainstream collaborations with the likes of Disney, Pokémon and Doraemon as gamers feel a sense of affinity with the in-game characters they play.

2. New products in new categories
   Razer ventured into the production of mobile game controller, powered drink mix and surgical masks. While Razer started serving customers in the PC gaming sector, the brand have slowly expanded their offers to console and mobile gaming. Kishi, the mobile game controller created by Razer, has helped the brand bagged the “Best of CES Award” for the eighth time. Launched in 2019, the powered drink mix – Respawn, signals Razer’s first foray into the Food & Beverage sector, as well as their participation in the US$60 billion energy drinks market. Additionally, as the COVID-19 pandemic hits the world which resulted in shortages of personal protection equipment products, Razer ventured into the production of surgical masks.

3. Razer.com product exclusives
   With the introduction of left-handed gaming mice 10 years ago, Razer worked with a small but spirited community of left-handed Razer fans to create a refreshed version of Left Hand Naga that the left-handed community approved of. The other product that Razer was proud of were their gift cards. Through targeting the loved ones and friends of gamers, Razer was able to increase customer acquisition of people around the gamer thereby increasing sales.

4. New service/digital products
   Although these new service/digital products were low cost and high margin items, it added value to customer experience as it allowed consumers to enjoy the products made by Razer. On top of regular warranty, Razer allows its customers to purchase extended warranty (RazerCare) directly from the brand to extend the life of their products. Not only did it gave consumers a peace of mind, it also help the brand build its reputation for quality products.

Subsequently, Razer also started selling premium audio software (THX Spatial) that allows consumers to improve their audio experiences no matter what devices they are using. Through the sales of THX Spatial, it helped Razer to reach out to customers who may not have been a Razer hardware customer, but may enjoy the software technology the brand deploy.

Results

Razer’s four creative approaches proved to be successful as it delivered spectacular business performance for Razer through three main metrics.

With the creative approaches, Razer increased its year-over-year conversation rate by 44.9% from the same period last year. This was made possible through the implementation of a structured roadmap for onsite optimisation and testing that allowed the brand to gain both quantitative and qualitative data to optimise its website. Not forgetting that, with significant improvements made in the checkout process, it decrease the overall time spent by consumers at the checkout process, thereby contributing to the improvement in conversion rates.

The creative approaches also enabled Razer to decrease its total channel cost over 70% over the course of last year. The marketing of Razer’s unique value proposition in quality and gaming performance, created alternative ways of offering value to customers to not only choose Razer over its competitors, but also shop on Razer.com over other etailers. In addition, with the opening of a regional warehouse for fulfilment, Razer was able to lower its operational cost by improving their order acceptance rates at a lower cost.

Lastly, as a brand that is traditionally reliant on distributors and retailers, the creative approaches enabled Razer to achieve overall sales growth, and increase the percentage of overall sales from its D2C business by over 30%. This was made possible with Razer taking on direct presence on selected etailers, Razer being aligned with global market spending to drive traffic to its website as well as its product innovations.