Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
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One such information tool is Sony 101, a series of online classes in which consumers can learn, among other things, how to create a digital library of music, video, and other entertainment media on a home computer, how to improve their digital photography skills, or learn about the technology behind 3LCD projection for high-definition televisions, and the benefits of Sony`s multiple television formats.
As buying habits change, consumers are turning to new sources of product information, such as their friends, and not just to learn about which brand is best. "Education takes Sony into an interesting space, because it is largely geared to tech heads, and while this segment represents a sliver of the consumer population, they are still influencers," explains Jeff Swystun, global director for Interbrand. "Sony knows it needs to improve its communications and that it can`t necessarily communicate with everyone, so segmenting its customer communications to target influencers is a smart move."
Halperin envisions SonyStyle.com`s information solutions as a way to move customers of one Sony product, such as hardware, into related products, such as its Media Editor software application, and into content, such as DVDs and CDs. "By providing tips and tricks on how to use Sony products, we can give customers more reason to come back and move sales into other divisions," explains Halperin, who notes that buyers of consumer electronics typically renew their purchase every three to four years.
Cross-selling and up selling are just one component of SonyStyle.com`s information strategy. The division plans to syndicate the look and feel of its web environment to retailers to create consistency in how Sony products and information about those products are presented to consumers visiting a retail partner`s site. Halperin says SonyStyle.com has been approached by consumer electronics retailer Crutchfield to integrate the look and feel of SonyStyle.com`s pages detailing Sony`s line of XBR high-definition televisions on the Crutchfield web site.
The idea is to present these Sony products in a manner consistent with Sony`s marketing strategy, but without making the consumer feel as though he has been transported from Crutchfield`s retail environment when clicking on Sony product descriptions. "It`s a way to create a sub-brand showcase for us," adds Halperin.
Sharing resources externally with retail partners is expected to help Sony ease competitive concerns retailers may have about its direct sales ambitions, a concern which has always been a balancing act for Sony. "By working with its retail partners, Sony can highlight the brand and help grease the online sales funnel," Allen says. "This is not necessarily a huge leap, but a way to weave together the different threads of the customer service fabric."
The technology behind these efforts will be developed jointly by Sony business units and even channel partners, rather than SonyStyle.com, to create greater operating efficiencies for all parties and maintain a consistent presentation for Sony products and customer service.
Inconsistency in brand presentation on the web has been a problem for Sony in recent years. Consumers visiting Sony web sites often entered different environments that were inconsistent with the overarching presentation of the brand by the parent company. Part of the problem, according to Interbrand`s Swystun, was that Sony`s business units took on a profit-and-loss mentality that created a fragmented presentation of the brand, especially on the web. Ultimately, that approach led to operating inefficiencies that began to devalue the brand.
"It was a less consumer friendly focus," says Swystun. "Consumers don`t care about internal profit and loss issues, they want brands that have an intuitive understanding about what they want in everyday use of a product."
To correct the problem, Halperin is having web technicians from different business units work side-by-side in creating web content for each division and links that move consumers seamlessly between Sony`s different web sites without having the customer feel as though he is entering a new environment, even when contacting customer service.
"The goal is to align the divisions so they are effective cogs regardless of the value proposition offered, whether it be pre-purchase influence or post-sale support, so we can create comprehensive, end-to-end customer solutions," says Halperin.
By syncing the resources of each division, Halperin expects Sony Corp. will more readily identify business development opportunities and fully understand the cost to provide customer support for those initiatives. "It`s a more comprehensive view," he adds.
Heading into the holiday selling season, SonyStyle.com will for the first time offer gift cards that can be purchased and used interchangeably at SonyStyle.com and Sony retailers. A new customer loyalty program that rewards consumers packing the company`s cobranded credit card in their wallets with bonus points on purchases made at SonyStyle.com is also on tap.
Further out, SonyStyle.com plans to offer refurbished product, a process that is more efficient on the web than in any other format because it consolidates demand in one channel. Halperin estimates the tactic will reduce the cost of remarketing those SKUs by 20% to 25%. "Every manufacturer has to deal with returned items and offering them direct rather than through the retail channel is more efficient, although we plan to limit our emphasis on these sales so as not to undermine sales of new product," says Halperin.
Near-term, the primary challenge facing Halperin is becoming an advocate within the corporation of what consumers want from Sony products and transforming SonyStyle.com into a destination site that offers consumers a dynamic sales and communications proposition.
A tall order
"Sony is certainly capable of having its brand bounce back, but it needs to improve its communications with consumers, because people expect more out of Sony due to the company`s heritage as an innovator, a first-to-market company and a purveyor of quality," says Swystun.
That`s a tall order, but industry experts agree that as an e-commerce veteran with a proven track record for innovative leadership, Halperin possesses the expertise and understanding about the changing dynamics of the direct sales channel to reinvigorate SonyStyle.com, as well as the company`s overall web strategy, and ultimately pump up the value of the Sony brand.