Sony Shifts Retail Operations Structure
By Greg Tarr -- TWICE, 6/24/2005 9:26:00 AM
New York â€” Responding to strong growth in its direct-to-consumer sales operations, Sony has realigned management responsibilities, shifting the online consumer electronics and Sony-branded retail stores to the consumer electronics group, Sony Electronicsâ€™ COO Hideki â€œDickâ€ Komiyama announced at roundtable conference with the press, here.
The e-commerce and retail store businesses, which were previously managed under Sonyâ€™s e-Solutions Company, have now been moved into the consumer electronics sales operation headed by Stan Glasgow, Sonyâ€™s U.S. consumer sales president.
Glasgow said Sony will continue to use its direct-marketing e-commerce and flagship Sony Style boutique stores as a vehicle for building Sonyâ€™s sales across all of its channels of distribution.
â€œWeâ€™re giving consumers a choice to shop anywhere [they] want,â€ Glasgow said. â€œWeâ€™re going to try to have a very open environment to allow consumers to shop, and weâ€™re going to try to make sure thereâ€™s synergy between our online sales and our retail partners and between our stores and our retail partners.â€
Glasgow, who said Sony will double the number of its stores to 30 this year, said the company has been successful at balancing its direct sales and its consumer electronics retail distribution, adding that he has not had one complaint from a retail partner about Sonyâ€™s stores.
â€œThey donâ€™t see them as a threat,â€ Glasgow said. â€œNumber one, theyâ€™re too small. We donâ€™t stock everything in the stores. Weâ€™re trying to sell a select range of products and inform the customer and demonstrate things.â€
The shift was made in tandem with the realignment and expansion of Sonyâ€™s business-to-business sales into one company, which will bring together sales and product development teams to address the needs of various markets, Komiyama said.
â€œPreviously, our other segment of the business was more or less fragmented and it functionally separated sales and marketing,â€ he said. In response Sony has established â€œa completely new platformâ€ for business-to-business, focusing more directly on key product areas â€œwhile segmenting different markets such as education and government,â€ said Komiyama.
Also as part of the change, direct sales of Sony Vaio PCs to business-to-business clients, which was formerly handled through the e-Solutions Company, has moved to the new business-to-business operation, Komiyama said.
Komiyama said Sony Electronics North American sales operation â€œhad another banner year,â€ in 2004, and is continuing to see growth as Howard Stringer, Sonyâ€™s newly approved worldwide chairman, leads a â€œturnaroundâ€ for the global organization.
Komiyama said Sony is following closely its three-year rejuvenation plan, called â€œTransformation 60,â€ which included last yearâ€™s relocation of its CE sales and marketing headquarters from Park Ridge, N.J., to San Diego. The goal is to complete the transformation around Sonyâ€™s 60th anniversary next year.
The move, Komiyama said, has helped solidify communication between engineering, sales, marketing and manufacturing, while speeding the time to market for innovative new technologies.
Komiyama acknowledged â€œconcernâ€ over certain market trends, including the rapid price compression in flat-panel televisions, and all digital technologies which have been exposed to the rapid commoditization of key components.
â€œHowever, I believe we have strong strategies for meeting these challenges,â€ Komiyama said.
Glasgow mapped out Sonyâ€™s display products strategy for 2005, showing the currently available 70W-inch Qualia 006 ($13,000) SXRD rear-projection microdisplay HDTV â€œat the very high end of the line.â€
Below Qualia, Sony is extending the XBR sub-brand â€” which was once used to mark top of the line CRT TVs â€” to include flat-panel LCD and SXRD.
Glasgow said Sony will introduce in the fall 50W-inch and 60W-inch SXRD-based microdisplay rear-projection HDTV sets under the XBR line â€œat considerably lower pricingâ€ than the current Qualia 006 model.
Below SXRD, by display type, are Sonyâ€™s 3LCD-based Grand Wega microdisplay rear-projection HDTV sets. Glasgow said Sonyâ€™s Grand Wega line is currently its largest consumer display segment. Kamiyama pointed to Grand Wega as one of Sonyâ€™s â€œvertically integratedâ€ products that use Sony-manufactured key components such as high-temperature LCD panels.
â€œWe are going to be highly competitive in microdisplay with our Grand Wega 3LCD line 42W-, 50W-, 55W- and 60W-inch models,â€ noted Glasgow. â€œWeâ€™ll be competitive against all the other rear-projection products.â€
In flat-panel TV, Glasgow said Sony has scaled back its plasma TV offerings, but he added â€œweâ€™re not out of it officially at this time.â€
Glasgow noted that production has started at the new Sony Samsung LCD-panel joint venture factory, giving the company a core competency in flat-panel production. Sony will market three major flat-panel LCD lines including the entry S Series, which â€œwill be highly competitive, even against the 50 to 60 brands now showing up in the United States,â€ Glasgow vowed, noting that Sony â€œwonâ€™t be the cheapest. Thatâ€™s not our goal. But we will be competitive in terms of base LCD models.â€
â€œWhere we are really excelling is in stepping it up to higher performanceâ€ LCDs, Glasgow said.
Sonyâ€™s step-up V Series LCD TVs are positioned â€œfor the more discerning XBR type of customer,â€ he said. The series will use enhanced CCFL backlighting to expand the color gamut, while using â€œa wider looking panelâ€ with a faster response time.
At the high end, Sony will also deliver this yearâ€™s models using LED backlighting, which outperforms even CCFL, Glasgow said.