Sony At CES May Give ‘Glimpse’ of Next-Gen TV Technology, Molyneux Says

Sony may “give a glimpse of it at CES and we'll share it with you then, but more detail on that I can’t share with you today,” Molyneux said of the next-generation technology. Sony is “exploring several different types of base technology when it comes to the panel” that will comprise its next-gen TV, he said. “But I can’t give you a definitive answer today on which direction we're going."

Sony’s e-commerce sales Black Friday through Cyber Monday were 40 percent higher than last year, Molyneux said. Sales through the company’s Sony Stores were 21 percent higher, he said. “We're thrilled” with the results, he said. As for Sony products sold Black Friday weekend through national accounts, regional chains and independent retailers, Sony set pre-holiday sales targets by product category and account, Molyneux said, without disclosing the targets: “On the whole, we've blown most of those targets away against the target numbers that we put down.” He wouldn’t disclose specifics, but said Blu-ray, for example, was “phenomenally successful. … We pushed that fairly hard, we had some very good offers on the table there. In the majority of cases, we did not go down a doorbuster or discount route."

"I'm really pleased with what we've achieved in TV” over Black Friday weekend, as well as digital imaging, he said. Vaio and tablet sales were “on plan,” but not setting any records, he said. Tablets are a very “cluttered market,” and on Black Friday there were “significant offers out there from our competitors that we didn’t follow, so we maintained our price."

When Molyneux, who hails from Sony Europe, experienced his first Black Friday last year as chief of Sony Electronics in the U.S., “I couldn’t believe my eyes, quite frankly,” he said. “Coming from Europe, seeing the stores packed with people and some of the price offers of every product line you can imagine on the floor. I really took a deep look and I thought to myself -- who’s benefiting here? Certainly the consumer, I can see that. Great deals. Getting some great products at low prices. The retailer’s probably benefiting from an increase in traffic flow in the store. But for manufacturers on the whole, it must be very painful, and when I checked, I found out it was very painful for quite a few. So our approach this year was to use the touch points, the messaging correct around the value of the product, be at the right place in the stores, where necessary offer some reasonable offers, but not to drive our profitability down to the detriment of shareholder value. That’s the strategy we took and as I mentioned, it has paid off and I'm excited about the results that we have seen over the holiday weekend."

For years, Sony was guilty of putting too much focus on “sell in,” and not enough on “the art of sell out” to the consumer, Molyneux said. “We were an organization that made the effort to ship and forget.” In his 14 months on the job, “I had to drive cultural change” inside the company “to get the focus where it should be” on the consumer, he said. “The point here is that if we could deliver an excellent experience at every touch point we have with the consumer, and we do that in a way that exceeds the consumer’s expectation, then what we start to see is an enhanced brand value viewed from the consumer toward Sony. If we're successful in that endeavor, customer satisfaction levels start to go up, there’s an increased preference for the brand and what we offer as Sony, and subsequently, the conversion rates start to step up."

Molyneux conceded that Sony in the past grew “a little bit complacent. … We had wonderful technology that was leading the market, such as Trinitron, and we relied on that and we'd lost focus on the consumer. That’s something we had to take to heart. We had to really ingest and understand and redefine how do we go to market and what’s important and what’s not. The relationships with our retailers is incredibly important. But the focus on the consumer is paramount."

In Molyneux’s eye, the company’s 46 newly rebranded Sony Stores represent “the wonderful land of Sony,” he said. “This is where we can show the very best of Sony’s content, services, product, and we can walk the consumer through this journey with Sony. That’s why I think it’s the most powerful vehicle we have to engage and educate the consumers about all the wonderful products, content and services we have to offer."

The remodeled pilot Sony Stores that Sony has opened in Los Angeles and Houston and at the Roosevelt Field Mall on Long Island have begun bearing fruit, Molyneux said. Over the Black Friday weekend, sales at the Roosevelt Field store were 265 percent above Sony’s target, he said. “That’s a phenomenal result, way above our expectations,” he said. “It gives you some idea about the power of this new store and the way the consumer’s embracing it.” Sony Stores typically average about 6,500 square feet, including storage space, Molyneux said. “Going forward, we may look at other opportunities, more of a boutique-style store, 3,000 or 3,500 square feet, depending on the city and the volume of traffic,” he said. “We need to be more definitive about where are the right locations and the right size of stores we need to put down in the future."

Sony has taken some of the lessons learned from the Sony Stores and applied them with help of major retail accounts to create what it internally calls “golden stores,” Molyneux said. For example, Sony has worked with larger accounts on an experiment where the Sony TV is taken off the wall and put in a “standalone” floor display, he said. “We give the consumer the opportunity to choose the content that they would like to see and hear,” he said. “They sit on a bench and they can explore as they would in their own home. It’s a very different experience. We've put these kind of golden spaces down across various stores across the U.S."

Sony has had “a great collaboration” with Fry’s Electronics to install the golden spaces in the stores’ TV and home audio departments, Molyneux said. “That’s paid off enormously. We've seen dramatic increases in our TV business and our home audio business with Fry’s through these executions.” With Best Buy, Sony has worked on similar executions in TV, digital imaging and camcorder products, he said. At Walmart, select stores have installed racks of Sony headphones that steer users through different headphone applications, such as sports or noise cancellation, he said.

Sony also has contracted with “dedicated reps” and put them to work selling Sony products at peak hours at Best Buy, Brandsmart, hhgregg, P.C. Richard and Target stores, Molyneux said. “These guys have been trained to a very different level, and they're passionate about Sony because they have long-term contracts with Sony,” he said of the reps. “So they feel part of the family. Their secondary job is to work with the retailer’s salespeople to train them how to sell the Sony product.”