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Sony Style Builds Retail Presence

28 Mar, 2005 By: David Ward

Sony has been slowly building out its own Sony Style retail chain that focuses as much on consumer education and branding as it does on sales.

But look for the company to more than double the store count in the next year. In addition to two flagships stores in New York and San Francisco and its own Web site (sonystyle.com), Sony currently has 12 smaller Sony Style outlets in high-end suburban malls across the county.

Dennis Syracuse, SVP for retail stores, said the company will open three more mall stores by the end of March and add an additional 15 locations in the next 12 months.

“It's focused on the top 50 metropolitan markets,” he explains of the rollout. “It's a very limited program to attract as many people as possible and help them bridge from the analog to the digital world.”

The development of the Sony Style stores has been relatively slow up until now, with the first flagship store opening in New York in 1993, followed by the second in San Francisco in 1999. The mall-based stores have moved a little more quickly, with the first opening in Costa Mesa, Calif., in 2003.

While the two flagship stores offer virtually the entire Sony hardware and software lineup in a 15,000-square-foot to 20,000- square-foot setting, the mall-based operations are much smaller — in the 5,500-square-foot range — and thus offer an edited selection of Sony TVs, DVD players, cameras and computers. “Most of the focus is on new products and we switch out SKUs on a regular basis,” Syracuse said.

But the mall stores do also offer Sony first party CDs and DVDs. “It's a pretty small number of DVDs because we have only one fixture for music and one for DVDS,” Syracuse said. “But we also take titles and display them throughout the stores so if you're looking at a new home entertainment system, underneath there may be the three or four of the DVDs that are being shown on the TV.”

Most of the music and movies — as well as a limited selection of video games — are priced at MSRP. “There's no discounting or loss leaders, though if the corporation is doing a discount or offering a coupon you can go to the concierge desk and get that printed out,” he said.

Syracuse insists the brick-and-mortar stores are evaluated for profit and loss and sales-per-square-foot just like any other retailer and even have to compete with other chains for allocation on new company products such as the new PSP handheld game player.

But it's clear the goal here is not just to provide another avenue to move product. “It's all about letting people know that Columbia Pictures is a Sony label and Epic is a Sony music label and ‘Wheel of Fortune' and ‘Jeopardy' are Sony properties,” he said. “And it's getting people to understand how it all works together and how Sony can benefit a consumer's life.”

As part of that education effort, the stores offer consumer seminars on a wide range of topics. “It's everything from how do I use my memory stick, to HDTV 101 to how do you integrate your PC and TV,” Syracuse said. “We also enable people to make an appointment with the concierge to come in and sit down and go through the products.”

The stores also serve as a destination for consumers looking for the latest information on upcoming technologies such as Blu-ray Disc.

Syracuse said the stores have thus far been a huge success from a branding and marketing perspective, adding sales are coming along as well. “We attract hundreds of thousands of consumers annually mostly through word of mouth,” he said “The only advertising we partake in is mall-required and there's very little of that.”

The Sony Style retail expansion hasn't seemed to ruffle the feathers of other retailers, primarily because of the store locations and limited product selection. “There's very little electronics being sold in malls, because there isn't enough gross margins,” Syracuse noted. He adds stores have such an edited selection of the Sony lineup, sales associates often end up educating and even training consumers on company products that result in purchases elsewhere.

“Consumer electronics can be very intimidating, especially when you walk into some stores and don't even know where to start,” Syracuse said. “So we want to provide a great experience for customers who come in learn about Sony and ask questions and get some real service.”

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