Facing stiffer competition from upstarts that have stolen its thunder in the consumer electronics business and a brand that is declining in monetary value, Sony Corp. has begun a makeover of its SonyStyle.com web site as part of a corporatewide effort to reenergize a sagging brand.
Key to the strategy is to more closely integrate SonyStyle.com with the company`s other business units, in particular Sony Pictures Entertainment, Sony Computer Entertainment of America, which produces PlayStation, and Sony DADC, which markets CDs and DVDs. The aim is to create a branding tool that fully leverages the resources of the company to more effectively and consistently showcase Sony products and ultimately make Sony the consumer electronics brand of choice.
The key to Sony`s approach, says Jack Halperin, senior vice president, Consumer Direct Business for Sony Electronics Inc., which oversees SonyStyle.com, is a return to simpler, more basic branding. If successful, the strategy will bolster direct sales by creating a richer, more dynamic online sales environment that helps consumers answer the age old question "Why should I make this purchase?" It will also enable SonyStyle.com and its sister sites to deliver the after-purchase support that engenders deeper brand loyalty and fosters repeat sales across Sony`s entire product line.
From interest to intent
"Our intent is to use the infrastructure and knowledge of SonyStyle.com to create an integrated strategy that takes business-to-consumer sales to the next level," Halperin says. "The focus is on moving consumers from interest in Sony products to intent to buy."
On paper, the strategy sounds simple. In reality it is anything but, concedes Halperin. Achieving the company`s goal means knocking down the silos within Sony`s many business units that create operational redundancies, inflate costs, and in some cases, hinder business development opportunities by making it difficult to share resources between divisions or with retail partners.
"It`s a massive proposition," acknowledges Halperin, who guided the early evolution of SonyStyle.com as senior general manager of business development for Sony Electronics eSolutions Co. from 2001-2003, before moving on to spearhead Sony`s CRM platform initiatives. "But there is a lot to be gained not only on the direct sales side, but in other areas of operation throughout the company."
Operating efficiencies are a measure in the monetary value of a brand, as well as an essential element in competing on a global basis. Companies that waste money to organizational and manufacturing inefficiencies lose market share to more efficient, innovative competitors.
That has certainly been the case for Sony in the exploding market for MP3 players. Sony, which once owned the market for portable music players with its Walkman, has lost its leadership in that market to Apple Computer Inc.`s hugely popular and iconic iPod. In recent years, Apple has revolutionized the downloading and organization of digital music on MP3 players, and capitalized on promotional tie-ins, such as its tie-in with the band U2 in 2004.
"A few years ago, Apple was just another company manufacturing an MP3 player, today it dominates the electronic digital music space," says Michael Gartenberg, vice president of research for Jupiter Research. "Sony is facing competitive challenges it has never faced."
A big decline
Other competitors, such as Samsung, which has eliminated sub brands in favor of positioning its flagship brand as a premium consumer electronics brand, have gained ground with the introduction of mobile phones and digital televisions that showcase technical innovations, once a shining trait of Sony that has dimmed in recent years. Samsung`s gamble has paid off big. The company`s brand is valued at $14.9 billion, up 19% from the previous year, and ranks 20th on Interbrand Corp.`s list of the Top 100 global brands. Sony`s brand, which ranks 28th, dropped 16% in value in 2005 to $10.7 billion, the largest decline for any brand in Interbrand`s Top 100.
"Sony hasn`t had a lot of breakthrough products lately and it can be argued that individual divisions have underperformed," says Jim Okamura, senior partner with retail consultants J.C. Williams Group. "Their strategy of more tightly integrating e-commerce into the main business lines can be seen as getting back to basics and having SonyStyle.com do what it did so well years ago."
An online library
Innovation was a hallmark of SonyStyle.com during Halperin`s first turn at the helm. Among the services introduced to consumers by SonyStyle.com was the Home Entertainment Configurator, which presented customers with a selection of Sony televisions based on the size of the room in which it would be placed, accompanied by a surround-sound system based on the customer`s stated preferences.
Although the packages offered were linked to available inventory, customers desiring alternative configurations not immediately available through SonyStyle.com could access a dealer locator to check availability on other Sony surround-sound components. The feature, which was dropped long before Halperin`s return to SonyStyle.com in May, was considered a potent cross-sell and upsell tool, according to Halperin, who adds SonyStyle.com may resurrect an enhanced version of the Home Entertainment Configurator.
In a nod to such innovations as the Home Entertainment Configurator, SonyStyle.com has recently begun launching information tools to position the site as a library where consumers can learn how to maximize usage of Sony products, such as the company`s audio and visual hardware and software. The move was made in deference to the evolution of consumers into multi-channel shoppers who view the web as one of many touch points.
The approach is also recognition by Sony that the web is a crucial component in delivering content to consumers--so crucial, in fact, that the library probably wouldn`t exist without the web. "The web provides access to a user community into which ideas about how to use a product can be pushed which allows Sony to then create an outbound marketing loop that includes e-mail follow-up to sales," says Kent Allen, principal of The Research Trust, a San Francisco-based e-commerce consulting firm. "By going beyond the basic features and functionality of the web, Sony can create a never-ending learning process."
Influencing the influencers