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Sony E-tail Site Raises B-to-C Stakes

New York - Sony plans to begin selling a wide assortment of competitively priced CE products directly to consumers this week via SonyStyle.com, the company's new b-to-c e-commerce site.

Sony said the website will initially offer about 600 of its A/V and computer products at street price and will ultimately expand the selection to include all 2,000 SKUs within its line.

The site, which is being beta tested through early fall, also features music downloads, editorial content including product information, tutorials and news, and will eventually offer financing plans, Sony-branded ISP service and, possibly, extended service contracts.

The intention, said Sony, is to build an e-commerce platform where customers can be reached through direct sales, interactive content and services. The company called it "a first step on Sony's journey to become a major Internet player in the broadband era."

Visitors can reach the beta site - expected to be up and running this week after a technical glitch delayed its scheduled July 17 launch - at www.sonystyle.com, or through the electronics home page of Sony's corporate site at www.sel.sony.com. The site is being launched with little fanfare outside the trade, but a heavily promoted public debut is slated for September or October.

Sony dealers, who were apprised of their supplier's general plans through meetings, letters and phone calls, appear to be taking a wait-and-see approach to Sony's direct-sell solution.

Robert Ashcroft, president/CEO of SonyStyle.com LLC, an independent subsidiary of Sony Electronics, acknowledged at a press conference, here, that channel conflict with authorized dealers would be a major challenge for the manufacturer. "We sought to find a win-win with our retail partners, and we hope they will see it as we do," he said. "It's not just about purchases, it's also about information transfer. We're responding to consumers' desire to understand more about our products."

Educating consumers, he noted, "will prime them for a sale."

So far, Ashcroft said, "nobody's dropped Sony, and we've had no negative feedback at all." Retailers were alerted to the company's e-commerce initiative as early as last year in addresses by then Sony Electronics president Teruaki Aoki and Sony Corporation of America chairman Howard Stringer, he said. More recently, letters went out to retailers on July 5 that provided password-protected access to the beta site.

Moreover, Sony has made no bones about its direct-sell ambitions by operating brick & mortar showcase stores in key markets here and abroad, and by selling its Vaio products and accessories online. The company has also telegraphed its e-commerce intentions in public pronouncements and ballyhooed the February launch of SonyStyle.com in Japan.

Nonetheless, authorized Sony dealers contacted by TWICE were still unclear about key aspects of the site and were taken aback by its sharp pricing and the breadth of its assortment. Indeed, while other manufacturers, including Philips, Samsung and Thomson, also hawk their wares over the Internet, the selections tend to be limited and pricing is at or above MAP levels.

Sony's policies set a new precedent in suppliers' direct-sell efforts and could have a profound impact on the way goods and services are distributed in the future.

Retailers were also concerned that SonyStyle might receive preferential treatment in the company's allocation of hard-to-come-by inventory like Wega, although Sony has reportedly assured dealers that they would get first dibs on orders.

The hackles that SonyStyle has raised within the retail community beg the question: Why do it? According to Ashcroft, who joined Sony last year to develop its electronic cinema business, the goal is to leverage the brand online and build a digital marketplace that will provide a platform for connected devices. "We have so many things going on, we need a place where you can go to get it," he said. "It's a destination for everything Sony "

Ultimately, he explained, consumers will be able to link their Sony Wegas, Vaios, set-top boxes and personal entertainment assistants to the site to download Sony music and movies, instruction manuals specific to each product and model, and, beginning with Vaio, to receive online diagnoses and repairs.

"Consumers prefer familiar brands to pure-plays, and it is up to established companies to take the reins," added Ashcroft. "We have an opportunity as a well-known brand to lead the way. Content, connectivity and technology - this is where the potential of the Internet is going to be realized."

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