Sony using upscale stores to boost sales to women

Monday, June 21, 2004

Gucci. Versace. Armani.

Sony?

Indeed. Electronics and entertainment giant Sony Corp. has joined the ranks of top-tier brands opening signature boutiques at malls in an effort to boost sales and awareness, especially among women.

Instead of haute couture, SonyStyle stores sell gadgets as varied as $20 clock radios and $20,000 plasma-screen televisions.

The retail settings are about as far as you can get from the sprawling warehouse-style stores that move most of Sony's merchandise. Blond wood paneling and large mirrors adorn the walls. Tucked among displays of pocket-size cameras and poster-size TVs are minimalist couches, area rugs and simulated fireplaces.

"It's not an intimidating environment," said Mike Fasulo, who oversees the SonyStyle chain of stores, in Boston and Houston and in Los Angeles and Santa Ana, Calif.; one will open in Palo Alto, Calif., next month. "It doesn't feel like a boys' club."

To that end, there's a crucial SonyStyle rule: no sports on TV.

The stores are part of a continuing restructuring at the Tokyo-based company famous for the Walkman and the Trinitron. Recently, Sony's electronics division has stumbled, losing $315 million on worldwide sales of $43.7 billion in the fiscal year ended March 31.

So Sony is following the example of the fashion industry, which has long used boutiques to showcase products that might get lost among competitors in regular retail displays.

"They need to make a direct connection to the consumer to exhibit the entire package," said retail analyst Marshal Cohen of NPD Group. "Without that, they are just one of several brands at a retailer."

Cohen said traditional electronics retailers that carry Sony products have little reason to fear SonyStyle as a competitor.

"When Ralph Lauren opened his own stores, everyone said it would cut sales everywhere else," Cohen said. "Instead, it enhanced sales everywhere because it enhanced the brand."

Cohen said that if any consumer electronics manufacturer could succeed with a single-brand store, it would be Sony.

"They are maybe the only brand strong enough to be a one-stop home for consumers wanting to make their home-electronics life easier," Cohen said.

Plus, Sony is one of the most established electronics brands in the world, making it tough for retailers not to stock its products. "Most retailers in this field have to carry Sony," said research analyst Richard Doherty of Envisioneering Group.

Even so, Fasulo said, "we have not had retailers calling us and thanking us."

Representatives of Best Buy Co., Circuit City Stores Inc. and Good Guys Inc. declined to comment.

'All Sony, all the time'

Development of the SonyStyle concept began about two years ago. Sony at that time operated multilevel retail stores -- each with about 20,000 square feet of shopping space -- in New York, San Francisco and Chicago. They needed a huge amount of traffic to justify their operating cost.

The Chicago store was closed this year; the New York and San Francisco stores are still open. Fasulo said there were no plans to replace them.

The smaller SonyStyle outlets, at 5,000 square feet each, highlight how Sony products can be used. Vaio computers are shown working with Sony digital cameras and Sony music players. Sony DVD players are connected to the company's plasma screen televisions and sound systems.

"Their goal is all Sony, all the time," Doherty said.

Running in an incessant loop on some TVs at the Los Angeles store recently were promotional trailers for Sony Pictures' "Spider-Man 2." Others showed documentaries from high-definition cable channels. There were racks of DVDs, also from the movie division, including last year's flop, "Gigli."

"I think we actually sold two of them," said salesman Nick Gronow, 26.

Customers were a mix of families who wandered in and teenagers and young adults who came to to visit SonyStyle.

Staff members, who aren't paid commissions, were affable and knowledgeable. And capable of breaking the rules.

"One night we were bored and switched to the basketball playoffs" on the big-screen TV, said a salesman who didn't want his name used.

Suddenly the "boys' club" dreaded by Fasulo was born.

"You should have seen the crowd," the salesman said, "that suddenly gathered at the front window."

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