i3 - March/April 2017 - 47

By Steve Smith

Business

R E TA I L ST R AT EG I E S

them quickly went to a buying group
reception crosstown first. And it could
have been plausible because retail
buying groups, whose members are
specialty CE retailers and installers,
are key to Sony's retail strategy.
The issue of selling features versus
price eventually came up, particularly
for Ultra 4K TVs. One reporter asked
o matter how CES and the technologies introduced
there have changed over the years, one challenge remains about retailers selling the category based
on price and that established brands need
the same for the manufacturers unveiling products
to be more active to change the dynamic.
and retailers who try to sell them: making a profit.
Fasulo indicated the key for Sony has
Achieving sustainable growth and profitability has always been
been to partner with retailers and custom
elusive in this business, even for established brands.
installers who are willing, ready and
able to sell, explain and install upscale
products with margins in mind.
All the promotions in the world won't
help if a manufacturer doesn't position
its brand in the marketplace correctly
and picks the wrong retailers to sell its
wares. The threadbare strategy of selling
certain SKUs on price by suppliers and
retailers and hope they can "make it up in
volume" or via market share still happens.
For instance, one story making the rounds
at CES involved an up-and-coming TV
brand which was selling an excellent over
50-inch Ultra 4K TV at retail for at least
$300 less than comparably featured
TVs during the Holiday season.
The model sold out nationally before
Christmas, but now the unnamed supplier is in the unenviable position of
trying to introduce a new Ultra 4K TV
at the same size, and conHirai noted, "Some asked,
That issue became evident once again
vince its retail partners to
'Can Sony actually remain
during CES this year at Sony's press consell it for a higher price.
relevant?' Consumers that
ference. Kazuo Hirai, president and CEO
We are on
As for Sony, it seemingly
of Sony, commented on the progress of his are far more tech savvy than
a path of
has done the impossible.
ever before, probably know
company's strategic changes. "We are on
sustainable Unlike several other major
more about specific features
a path of sustainable growth," Hirai said.
Japanese CE brands that
and pricing of specific SKUs
Specifically Sony has slimmed down its
growth.
drove the industry for the
they are interested in, and have
expansive CE line and focused more on
past four or five decades,
premium products. For instance, Sony said more choices where to buy
- Kazuo Hirai, president
it has been able to get back
those products."
in its worldwide financial report for fiscal
and CEO of Sony
to its roots of introducing
With more CE sales volume
second quarter ended September 30, operinnovative CE products, and selling
ating income for its TV and audio products generated online, usually based on
them profitably. Sony has done it in
price, Fasulo has focused on regional
increased year-on-year "primarily due to
partnership with retailers and custom
CE retailers, independents and
an improvement in product mix reflecting
installers that aim for profit - not just
custom installers who can explain and
a shift to high value-added models."
volume - which has always been a rarity
demonstrate more upscale products.
In his remarks, Hirai saluted Mike
in this business. n
Fasulo, president and COO of Sony North That's why when both Hirai and
Fasulo were running late to their own
America, for the turnaround in the U.S.
reception, this reporter and a couple
The transition for Sony was not an easy
Steve Smith is editor at large of TWICE
one, especially in a changing marketplace. of others quipped that one or both of
and was its longtime editor in chief.

Sony Partners With
Retailers to Prioritize Profits

DAVID MCNEW/AFP/GETTY IMAGES

C TA . t e c h / i 3

MARCH/APRIL 2017

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i3 - March/April 2017

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