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EXCLUSIVE: Samsung Direct Sell Store Upsets Local Retailers

The emergence of another Samsung pop-up store at Westfield Parramatta, a major shopping location in NSW, has key CE retailers asking why?

Some are angry at the emergence of the store that is primarily designed to sell Samsung mobile phones and have expressed concerns to ChannelNews.

Several major International brands have admitted they are “selling more product direct” than ever before following the outbreak of COVID and several months of shopping restrictions, with several brands admitting they are exploring the concept of their own stores in Australia.

Samsung call their stores ‘Experience’ Stores, despite the big South Korean retailer selling product direct to customers.

Retailers we have spoken to believe that several brands, including Samsung, are being pushed by their parent Company to experiment with their own retail concepts in the Country, due to the success of Apple stores.

Oran Weldrick, Head of Retail Experience & Operations, Samsung Mobile, said, “We are thrilled to be expanding our retail presence in Sydney, allowing more customers to experience our mobile products.”

He claims the new Samsung Experience Store will offer a safe, fun and inspiring environment where customers can speak to product specialists and try our latest products.”

He has not explained why this same process cannot be achieved partnering with a Harvey Norman, JB Hi-Fi or Good Guys, or the many carrier stores that sell Samsung mobile phones.

One retailer described the move as “A grab for more margin”, with the Co-Op dollars normally spent with mass retailers being put into rent and staff costs.

18 months ago, Huawei moved to open several experience stores that sold direct. Six months after the stores were opened the stores were closed.

Overseas, Lenovo and Oppo both operate their own stores where consumers can buy products direct.

“Apple got away with this, now Samsung is looking to follow Apple during the peak buying period of the year. One has to question why peak periods and not during the quiet months,” said a Harvey Norman store manager.

The Samsung Paramatta Experience Store is 150 square metres dedicated to everything from smart phones to smart watches. There is also a dedicated Customer Service area, where customers can get one-on-one assistance with their devices.

Close to the Samsung Experience store is a JB Hi-Fi and David Jones store, where Samsung products are being sold in direct competition with Samsung.

Samsung has also run extensive promotions to get traffic to their own store.

Prior to the opening, visitors were invited to scan QR codes to find out more about Samsung and for a chance to win an array of Samsung prizes, including Galaxy S21 Ultra, Galaxy Watch4 Classic, and Galaxy Buds2.

Close to 10,000 customers signed up to the Samsung promotion, with local Paramatta retailers who sell Samsung product claiming this is traffic that Samsung should have been driving to local retailers instead of their own store.

The Company has admitted that the full range of Samsung mobile products are available to purchase at the Parramatta store, including the newest Galaxy Z Fold3 and Galaxy Z Flip3 models.

Visitors can also experience some of Samsung’s best apps and services, including Samsung Pay, Samsung DeX, and Samsung Health.

A Samsung press statement claims their physical stores are where our customers can get hands-on with their products, talk to Samsung personnel and see our new features come to life.”

At this stage it’s not known how much business Samsung is taking away from retail partners or how many new stores they plan to roll out next year in Australia. Samsung Australia is partnering with a local Company Retail Prodigy Group to role out their direct sell retail operation.

Retail Prodigy Group holds the master Retail Franchise for Nike Stores across Australia and New Zealand, together with the distribution rights for US Brand TOMS.

The business describes themselves as a Samsung Retail Operations partner, who since 2011 has driven the rapid expansion of 46 Nike Branded Stores, including Flagships in George St, Sydney and Melbourne Central Shopping Centre. Nike used to be a major clothing brand sold by retail partners.

Stephen Younane, co-founder and CEO of RPG said, “We are proud to be launching another Samsung Experience Store in partnership with Samsung Electronics, bringing the ultimate in experience to Samsung’s customers in Parramatta.”

The Company admits that during the past 12 months, they have “worked in lock step with Samsung” to solidify their partnership and knowledge of the local retail landscape.

Talking about Samsung’s retail plans, Younane said, “We are looking forward to what will be an exciting next chapter in 2022 as we look to more milestones next year.”

The statement does not bode well for retailers, who admit that business could slow down in 2022 due to stock issues and a general slowdown in availability of new products due to COVID.

 



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