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How has competition impacted GoPro’s Action Camera sales?

action cameras

Since GoPro’s launch in 2002, the Action Camera market has flourished, with pro-athletes and hobbyists alike. However, while GoPro remains particularly popular with extreme sports enthusiasts, it has struggled in recent years against cheaper competitors, such as Polaroid and Veho, in the mass market.

On 27 July, GoPro reported a loss of $91.8 million (USD) in its third consecutive quarter of losses. It also reported a 47.7 percent fall in revenues, from $420 million in Q2 2015, to $221 million in Q2 2016. Despite the losses, the reported revenue topped analysts’ expectations of $194 million (Thomson Reuters).

GoPro Chief Executive Nick Woodman confirmed that the Hero5 Action Camera and Karma Drone would be released before Christmas this year. He predicted these releases would make for “GoPro’s most exciting fourth quarter ever – a quarter where we expect to return to profitability.”

Action Camera range analysis

Brand View has reviewed the number of Action Camera listings in Argos, Currys, Park Cameras, Very and Wex Photographic, since 1 April 2016.

The total number of Action Camera listings, including GoPro Action Cameras, steadily increased from 1 April 2015 until the end of the year. The total number of Action Camera listings peaked on 1 January 2016, while GoPro listings peaked the month before.

total number of action camera listings uk retailers 2016

After 1 January 2016, the total number of Action Camera listings fell until 1 June 2016. The decline in listings can be partially attributed to GoPro’s delistings. In February 2016, CEO Nick Woodman announced that from April 2016, GoPro would be focusing on its Hero4 Black, Hero4 Silver and Hero4 Session products, while discontinuing the Hero, Hero+ and Hero+ LCD. The GoPro delistings can be clearly seen in April 2016 – the number of listings fell 24 percent from the previous month.

On 1 July 2016 there was a 44 percent decrease in GoPro listings compared to 1 December 2015. On 1 February 2016 and 1 March 2016, GoPro accounted for 22.9 percent of total Action Camera listings. This number then fell to 14.8 percent by 1 July 2016 – the lowest share throughout the time period analysed.

Action Cameras’ pricing

GoPro’s average shelf price fell from £252 on 1 April 2015, to £213 on 1 January 2016. The introduction of the Hero+ in three retailers, at a lower shelf price than most other GoPro listings, contributed to this average decrease.

However, the main reason for the reduction in average shelf price was price cuts, partly aided by shopping events such as Black Friday and the Christmas sales.

Following January 2016, GoPro’s average shelf price climbed, peaking on 1 July 2016 at £257. This rise was due to the aforementioned delistings of the Hero, Hero+ and Hero+ LCD which left the higher priced Hero4 range of Action Cameras. GoPro’s average shelf price increase further distanced the brand from competitor Sony’s pricing.

average shelf price action cameras uk retailers 2016

At the start of the analysis iON had the third highest average shelf price at just under £200. However, following significant price reductions on its Action Cameras, its average shelf price fell to £131, below that of Veho and much closer to Polaroid. Despite this price cut, it was not able to significantly boost sales and filed for bankruptcy in June 2016.

Shopper reviews

Given its premium price tag, GoPro will need to maintain its reputation for manufacturing high quality products to keep this competitive edge. The brand should carefully monitor shoppers’ online reviews and ratings, which are extremely important in determining shopper purchase decisions, intent and sentiment, especially for premium Consumer Electronics products. Any poor reviews could deter shoppers and possibly lead them to purchase rivals’ cheaper product.

Using Brand View Reviews and Ratings we have analysed the average review percentage of seven brands in Argos, Currys, Park Cameras and Very.

Wex Photographic is excluded from this analysis, as GoPro was the only brand of the seven to receive any reviews in this retailer. In the remaining four retailers GoPro had the greatest average review percentage of the brands listed. On the Argos and Currys website Veho had the second greatest average review percentage and given its lower average shelf price it was likely GoPro’s main rival in these retailers.

Meanwhile, Polaroid struggled with the third lowest review percentage in Argos and no reviews in Currys or Very.

average review percentage action cameras 2016
*We have included Park Cameras’ shopper reviews as they appeared on the website. However, its overall review score calculation was significantly different to that of the other retailers.

 

Argos, Currys and Very all had review systems that calculated the overall review score as an average of all the product reviews, placing equal weight on each review.

The reviews on the Park Cameras website were powered by the company TestFreaks and the overall review score is called the FreakScore. The methodology is more complex than the other retailers, as it takes into account trusted reviewers, expert reviews and the product’s age as described below.

average shelf price action cameras uk retailers 2016TestFreaks website 28 July 2016

 

The GoPro Hero4 Black benefited from this methodology, as it received a perfect 5 out of 5 stars, despite a significant number of reviews that were not 5 star reviews.
testfreaks 5 star score action cameras 2016

Park Cameras website 28 July 2016

 

However, other brands did not benefit from this calculation, as it included factors such as the product age and age of reviews. The Panasonic Lumix DMC-GH3 received an overall score of 4.0 on the Park Cameras website. If the overall rating was calculated using the methodology employed by Argos, Currys and Very then this camera’s rating would be approximately 4.5.

This product had reviews from four years ago, which likely impacted on the product rating. As some retailer methodologies differ from the norm, it is important that brands and manufacturers monitor their products’ reviews and ratings carefully.

What’s next for GoPro?

GoPro Chief Executive, Nick Woodman has placed his faith in the upcoming release of the Hero5 Action Camera and Karma Drone and believes these products will bring the company back to profitability. He described the Hero5 as the “most connected and convenient” Action Camera that GoPro has ever released. Rumours are rife regarding the specifications and price of the Hero5, but many sources report that it will cost between $450 and $550 (£340 and £420 as per the exchange rate 28 July 2016).

If the GoPro was released at that price point it would competing against 360fly 360⁰ Action Camera. While the 360fly 360⁰ product can film in 360⁰, it only films at 720p, while it is likely that the Hero5 will film at a minimum of 4K (which is the same spec as the Hero4) although some suggest the Hero5 will record up to an 8K resolution. A 4K version of the 360fly is available for £599 on the Park Cameras and Wex Photographic websites.

shelf pricing piano of action cameras 2016

One problem GoPro may face with the Hero5 is convincing existing customers to upgrade to this model. Initial reports indicate that the Hero5 will be aimed at athletes, runners and cyclists, as it is likely to be smaller and lighter than the Hero4. It will also likely have a greater appeal to divers as it is expected to be waterproof to 60-meters, some 20-meters more than the Hero4 Black.

It appears that GoPro is trying to boost sales by targeting a wider demographic in the market rather than just extreme sports enthusiasts. Broadening the appeal of its products may help GoPro return to profit while maintaining its reputation as a quality, premium-end brand.

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