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Sony Slash SKU’s, Reduce Retailers, Outsource High Res Audio, In Move To Get Profits Rolling Again

Sony Slash SKU

The move is a global initiative that will see Sony invest more in training and in store merchandising. In the US Sony has cut their SKU count from 2000 to 800. 

In Australia Sony has already started to cut their product range with the Japanese Company also cutting out several product categories altogether, 

They have also handed their High Res Sound business and their top end home projectors to Melbourne based distributor Audio Active. 

Sony executives said that the Company is concentrating on better goods that deliver higher value and greater overall customer satisfaction.

In addition to boosting the bottom line, Sony hopes the effort will help restore its lost brand cache from years ago. 

Sony Electronics U.S. president Mike Fasulo said that the move has already started to have an effect with the Company delivering profits in November a key month in US consumer sales.

Fasulo said that instead of stressing price, Sony has implemented a new strategy designed around the customer experience to win the point of sale for key categories, including TV (particularly 4K Ultra HD), high-performance audio (including high-end sound bars and Hi-Res audio), digital imaging (particularly mirrorless and action cams), and mobile electronics, he added. 

“Because we are in a conversion model right now – I’ve been very clear that this is a turnaround, and it is turning around very nicely and very quickly, which is good,” said Fasulo.

Speaking about their push into the 4K TV market he said that there was still some industry issues around 4K marketing “We can’t forget that this is market creation, and consumers are still confused. The more demonstration and more explanation we can do, the better [it will be] for everybody. Then, you can charge after market share. There’s a crossroad, a shift, where we should all be working as an industry to get excitement about what this new technology is all about.” 
Fasulo said that Sony was implementing a “Gemba” strategy which is designed to deliver excitement surrounding Sony’s new products and technologies to areas where consumers can engage with the technology and the brand. 

Sony is taking money out of advertising instead the Company is spending on “experience selling” at retail, Fasulo said, adding that the goal is “conversion” of customers. 

“It’s about selling through products as opposed to load ’em and leave ’em. Those days are over,” Fasulo explained.  

Despite recent downwardly revised sales estimates for the corporation, Fasulo said Sony Electronics has been making significant progress developing and growing businesses around the key categories on which it has decided to focus. 

Fasulo said since revising its strategy last year, Sony has taken a different approach than most consumer electronics manufacturers by not focusing on overall market share from a SKU sales perspective, as it winnowed down the company’s product mix to focus on those models that can generate the best value performance for the customer and the highest profit margins for Sony and its dealer partners.

In Australia Sony is using resources in Singapore to handle back office logistics.

Sony Australia has also moved to shift the servicing of speciality audio and vision dealers via Audio Active. 

“Our job is to get Sony back to a sustainable, profitable entity for the corporation, and we are going to do that by providing the best customer experience,” Fasulo said.