BrainTrust Query: Sony’s Retail Reinvention

Through a special arrangement, presented here for discussion is a summary of a current article from the newmarketbuilders blog.

Even as retailers and brands leverage social media and digital marketing to deepen connections with consumers, Sony Electronics is making organizational changes that shift resources away from buying office support and toward shop front activities. These include taking an active role in sales training, merchandising, and other consumer-focused engagement initiatives in both their owned retail and partnered environments.

In a one-on-one interview, Phil Molyneux, Sony Electronics’ president and COO, said that while working with buying offices at its retail partners for many years "has been extremely good" for the company, the need to understand the consumer on a deeper level became evident. For example, its new initiatives allow Sony to gain insight into why a consumer decided to buy one of its products or, more importantly, why they didn’t.

"Having our own resources to complement those of our retail partners, in terms of salespeople, allows us to better explain the value of our products to consumers, and to give them a more compelling reason to commit," said Mr. Molyneux. "At the same time, we further the education of our retail partners’ salespeople."

By directly gathering information beyond traditional POS data, Sony gains more-immediate feedback on features consumers may desire in the future, such as a higher zoom or faster shutter on a digital camera.

"Another benefit is that we get a real-time view of what’s happening in the market in terms of the competitive landscape and changes in dynamic pricing, which flows back at the press of a button or through a phone call," said Mr. Molyneux. "By aggregating that data, we’re able to move faster and react quicker in the market, ensuring that our momentum is kept up."

Mr. Molyneux said Sony has been communicating its new sales and merchandising initiatives with its third-party retailers over the last couple of months and the response has been positive.

"They get it and support it, and they’re embracing the value," said Mr. Molyneux. "It hasn’t come as a sudden shock to them, but as a predefined plan that we’ve built and considered them a part of, so it’s a very positive movement for both sides. We’re in a partnership and we have strong relationships with our retail partners. It’s very important to discuss and collaborate and fine tune things together."

BrainTrust

Discussion Questions

Discussion Questions: What do you think of Sony taking a more proactive role in store level activities and data gathering? Which activities will be most productive? How can vendor-initiated support best complement or enhance that provided by retailers?

Poll

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Adrian Weidmann
Adrian Weidmann
11 years ago

While it certainly makes sense for Sony to position their salespeople at a retailer’s location to enhance their position, it does open the door to tip the balance between product brand and retailer as brand. Even though Mr. Molyneux claims to be interested in understanding the shopper’s selection behaviors and insights it would be interesting to monitor his thoughts if sales of Sony products don’t increase when Sony employees are “complementing” the retailer’s sales associates. It is an interesting development; this could be another phase in retailers developing a bazaar environment of brand ‘shop-in-shops’.

Max Goldberg
Max Goldberg
11 years ago

It never hurts to know what consumers are thinking. Social media is one way. Seeing consumers shopping is another. Companies can use this data to better their products to meet consumer needs. This is part of the equation of being a successful brand.

The rubber meets the road when manufacturers take this information and change their products, or even product lines, and build a superior product.

Consumer electronics is a tricky area. Most consumers use a fraction of the features in most devices, and are frequently confused by the them. If consumer electronics brands can back their products with strong customer support, the combination can increase sales and build loyalty. Over the past few years, Sony has been slipping in both, their once stellar reputation has been tarnished.

It will be interesting to see what they do with the new feedback.

Bob Phibbs
Bob Phibbs
11 years ago

Retailers have cut training budgets and employees. Any way a major brand can bring something to the table to get the merch out the door is welcome as the days of deal, deal, deal are limited.

Ryan Mathews
Ryan Mathews
11 years ago

This may be an example of, “too little, too late.”

If Sony wants to know what its target shopper wants, it probably needs to visit an Apple store.

Sony had it right when it developed the tagline, “Sony style,” but it never followed through fully enough. The question now is, “What do you do when cameras are your strong suit and everyone is carrying one around on their phone?”

I wasn’t being cheeky about the Apple Store idea. The iPod isn’t close to being the best mp3 player available, but it sure is popular. Sony needs to figure out how to recreate excitement around its core lines and then find some way of leveraging things like social media to extend the relationship to — and with — the brand.

Surveying your existing customer base is fine — if you’re happy with your sales. But, there’s a danger of doing a better and better job for fewer and fewer people until you put yourself out of business.

As Peter Drucker noted, the greatest opportunity always exists beyond your current customer base.

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
11 years ago

Why is it either/or? Back store and front store activities are both important and interdependent. Focusing on customers and who buys what is where appropriate in-store experiences can be created. Without customer information, in-store strategies are hit or miss guesses. Without tracking the result of new approaches and ensuring an efficient system to create and deliver what customers want, where and when they want it, improvement will be nonexistent.

Sony has ignored this approach for far too long, and so has a significant challenge in changing their work practices and integrating the new activities with traditional supply chain departments.

Ed Rosenbaum
Ed Rosenbaum
11 years ago

Nothing beats the knowledge and true feedback a brand receives than actual in- store experience. If a brand has people on their direct payroll telling them what buyers are asking and reasons for their selection, what better feedback and direction can they have? If I as a buyer tell a store employee why I am purchasing Brand A vs Brand B, why does that store employe care? He is making a sale and that is his sole purpose for being on the sales floor. But, if I am employed by the brand not chosen, the information I can gather and send back to those in the decision making position is invaluable.

Lee Kent
Lee Kent
11 years ago

I believe this is a great and much needed move for vendors. In a world of product savvy customers and social interaction, having contact with the actual brand is key. I would also suggest that more retail leadership get out in the stores more often, too. For the same reason!

Mike Osorio
Mike Osorio
11 years ago

I applaud the move. Anything that brings this once “coolest of cool” CE brands closer to the customer is a positive. Sony has made many missteps over the years, losing ground they once owned to Apple and others. Better consumer insights is a great place to start to regain their positioning.

Lee Peterson
Lee Peterson
11 years ago

Further proof that the best way to find out what’s happening at retail is to be — at retail. To me though, this is an indicator of the direction most manufacturers will take: their own stores. I’d wager that once Sony finds enough out, they’ll do a better job with their own mundane retail experience (the Sony stores) and proliferate.

Mark Price
Mark Price
11 years ago

Sony’s initiative to engage with their retail partners and their customers directly at the store level will provide the company with valuable insight on merchandising, associate training and commitment, and consumer feedback that they may not be able to obtain in any other way. Not only will Sony be able to have a higher confidence level about retail customer experience in stores they do not own, but they will be able to role model and support store associates at the same time.

Christopher Krywulak
Christopher Krywulak
11 years ago

Any effort by a manufacturer or retailer (in this case, Sony is both) to use metrics to improve their product or service delivery should be commended. In the consumer electronics space, the devices and their design will determine their success in the marketplace, so it’s crucial for Sony store staff and partner retailers to get as much of the customer product feedback (and as mentioned, especially the negative feedback) they can back to Sony headquarters. And at the retail level, it shows the customer that the retailer/Sony is listening, which is obviously good for building loyalty.

Lee Kent
Lee Kent
10 years ago

This one is right in my sweet spot! I have been on my soap box about how to rethink retail, especially in the electronics arena where so many will shop in a store only to buy online.

The bottom line is that it really doesn’t matter to the manufacturer where the consumer buys. With that being the case, my thinking is that the manufacturer should have some skin in the game.

If Best Buy, for example, is going to be a showroom for Sony, for example, then Best Buy should be getting Sony’s support to sell the products and offset some of the expense of the in-store experience. Otherwise, online can often undercut prices to skew the decision of where to buy.

In addition we had a great experience because of Sony’s in-store presence just a week ago. We needed to buy a new DVD player and liked a certain Sony product. The problem was that our TV is old and we don’t plan on upgrading it right away but would like a DVD player that will stream etc. Can we do it?

My husband went to Best Buy and sought out the Sony guy. He said, “yes it will work but you will need to buy an adapter. You can get it on Amazon” and he gave my husband the requirements. Three days later we were in business.

Win-Win, otherwise Costco (we love Costco too, but not when we are not sure how something works) would have gotten the sale and we would have had to return it when it didn’t work. Just sayin’….