SAN DIEGO –
Mike Fasulo, Sony Electronics’ executive VP who is head of its sales organization, took to the road recently for an extensive tour of the company’s retail partners and learned a lot about his brand and the state of CE retailing today.
TWICE found out about this tour, the bulk of which began in late May to late June and concluded with one visit a couple of weeks ago, when meeting with Fasulo at the Progressive Retailers Organization (PRO Group) meeting in early May.
Fasulo visited more than 20 retailers and 30 stores throughout the tour, which included Sony’s new head of sell-in sales, Brennan Mullin. The trip included “all channels and types of retailers, from national to direct, from club, mass, online to CE and specialty stores,” as well as Sony’s own stores.
In this exclusive TWICE interview on the trip, Fasulo detailed what he hoped to accomplish and what he learned along the way.
Why did you embark on this tour? Have you or Sony ever done a tour like this before?
CE retailers are now in the business of handling a lot of change and transition. Given the enterprise changes we’ve made in programming, UPP [universal pricing program] and organizational alignment, I felt a personal visit from me to each retailer was appropriate. This all follows on the heels of the one-on-one phone conversations I had with each retailer when we announced these changes.
I didn’t want our partners to learn of these changes from trade or consumer media. That said, this did set some precedents. I regularly visit with retailers and always visit the stores, but this is the first for me to go on the road for four consecutive weeks and meet with more than 20 retailers with 30 plus store visits. It gives you an appreciation of just how large the U.S. is.
What were the big surprises you learned on the road? What did you learn based on your trip that you have changed, or will change soon?
I was not as surprised on this tour as my views of the challenges our industry faces were affirmed, if that answers your question. There were a lot of common themes, a lot of shared ground. Profitability was a common discussion, as was the need for change leadership, which is precisely what Sony has initiated. Execution at retail was, at time and at points, more impaired than I had anticipated, which led me to speed up our focus and resources of sell-out or support to the selling floors.
What did you learn about the current condition of the Sony brand?
I learned that both our retail partners and consumers continue to have a strong affinity to Sony. With our retail partners, it was clear and consistent that they want Sony back in the No. 1 share position and would like to see [Sony] compete more aggressively.
They also acknowledged and understood that our goals were established to support both the retailer and Sony, making profit while providing the consumer with a great and delightful experience. To that point, while it is has come with some pain, they recognized why we’ve moved from a pay-for-participation to a pay-for-performance model, specifically as it relates to the retailfloor execution.
Additionally, we have committed to — and are demonstrating a desire to partner with them on — improvements and not simply penalizing them for violations. It is as tough for the retailers as for the vendor to keep pace with change and volatility but unfortunately the victim has become the consumer. We must excite the customer again about the possibilities of our industry’s products and not simply compete for dollars at the expense of value.
Several retailers have told
us that they like Sony’s UPP program –
what reaction did you get from retailers
on your program?
Overwhelming support. They have almost universally applauded our approach and have asked that we expand the assortment under SURE [Sony Unified Resale Execution].
Should we expect changes in the UPP program — more products covered for instance — by the fourth quarter?
Yes. We have already expanded from 140 SKUs on SURE to more than 160 and this will continue to expand. That said, not all products will be SURE and, at the appropriate endof- life cycles, we will remove them from SURE.
What was the retail reaction
to other UPP or similar type programs
put in place this year?
Again, there was general support for UPP across brands and categories from most retailers. The question they are struggling with is how disciplined vendors will be in sustaining UPP during tough and promotional periods and when market shares fall.
They appear confident with Sony’s approach and commitment, realize we are serious about profit and customer experience, and see that we’re not willing to focus on market share at any cost. They also acknowledge this does improve the customer experience and allows them to focus on their strengths and differentiation.
We are partnering with the retailer on the best way to provide a better customer experience rather than being irresponsible and leaving it to the retailer to figure it out alone.
In late July, what does the
holiday sales season look like?
I have mixed views on this holiday for three main reasons: The presidential campaign year will dominate the airwaves and make it difficult to break through with CE media. One option is to deploy alternative vehicles, such as digital, experiential, social and local, to name a few.
Second, if our industry continues to drive the TV “race to the bottom,” we will not only have a tough season from a revenue base but will also be selling our consumer short on some of the most advanced features and benefits they will not demo, never mind enjoy. In a period where we all know replacement sales are soft, we should be offering compelling featured products that excite and stimulate intent to buy.
And third, we have the opportunity to have a very strong season given the vast number of new and exciting products in market and coming to market across multiple categories. A few would be Vaio/PC with Windows 8, touchscreen technology, 4K for the home, premium audio, fashion and high-quality-sounding, applicationspecific headphones, great advancements in imaging, and, of course, Android- based OS products.