Sony's Déjà Vu

It was with some surprise, and a bit of déjà vu, that I heard about Sony's plan to open 10 upscale Sony Style stores into the top U.S. markets. (See TWICE, April 5, p. 1.) If you missed it, Sony, which is in the process of moving many of its CE operations from New Jersey to San Diego, said that the stores would be interested in showcasing and selling its branded products.

My question is this: Where's the outrage? If you remember the last time Sony announced it was going to open stores, more than a dozen years ago, its retailers were outraged. Faxes and phone calls flooded my office. (It was before e-mail.) Retailers were going to drop Sony or limit their lines in their stores. At the time the intense reaction to the plan seemed to be the equivalent of townspeople with torches marching on Dr. Frankenstein's castle in "Young Frankenstein."

Because of that, Sony quietly opened stores in the Sony Building in New York, a location in Chicago and one or two in California. That's it, until now.

What was the reaction this time? No phone calls, no e-mails, no faxes … no torches. The silence is deafening.

We tried to poll readers of www.TWICE.com to see what they thought. We asked retailers if they would cut back on Sony or drop the brand completely if the manufacturer opened a store in their hometown. The result as of this writing was a resounding "No," with 67 percent saying they would not drop or cut back on their Sony purchases.

That's good news for Sony, proving once again the strength of the brand. But the contrasting reaction also involves Sony's approach this time around, and how the industry has changed in the past decade or so.

This time, Sony says it will open small stores, about 4,000 square feet of selling space, that won't carry all of the company's CE line and will emphasize vignettes of products.

Possibly more important is that retailers are far more sophisticated nowadays. Retailers are now used to competing against manufacturers who sell against them with their own stores and their own Web sites. Apple, Bose, the soon-to-be-departed Gateway Retail Stores (but not on the Web), Dell and all those manufacturer Web sites are all competitors.

Yet today many retailers don't see manufacturers' retail operations as a serious threat. Some retailers take the high road, saying that such operations help educate consumers about new technologies, which helps the entire industry.

And electronics and electronics/appliance stores are too busy maintaining their Web sites and opening new locations to meet growing demand to be that concerned. A typical example is the list of store openings and proposed expansions of members of the NATM buying group. Eight of NATM's 12 members are in the expansion mode. And in this issue, TWICE is reporting that American TV & Appliance, a former NATM member, is opening stores in St. Louis, while Leon Temiz's Electronics Expo is expanding in New Jersey.

It all goes to show that while retailers are by nature still conspiracy theorists ("Everyone is out to get me!"), many are quietly confident about their business. That speaks well of them and the future of the industry in general.

And one final note: To see how the 100 largest consumer electronics retailers performed during calendar year 2003, make sure to take a look at our May 3 issue which features the TWICE CE Top 100 report.