There is nothing like kicking someone when they are down, but that is exactly what US sound Company Sonos has done, to their retailer network partners, with an offer made directly to customers who purchased their original Sonos product at a retail store to now buy direct a move seen as a deliberate marketing strategy to take business away from their retail partners.
After capturing the names and addresses of people who have purchased Sono’s products from retailers such as JB Hi or Harvey Norman as well as specialist Ci dealers, Sonos whose share value is down 6% this month, is now spruiking consumers with a 40% discount off deal, if they buy direct from Sonos.
This is equivalent to the margin that they would have to pay retailers who sell their products.
In addition Sonos is offering a 30% discount run of site outside of their promotion offer for customers who buy direct from their online site.
Sonos’ revenue didn’t grow at all in the last year, In fact, it fell 7.6%.
The stock price has also languished lately, falling 22% in a year.
also falling are their margins which is why the business is looking to sell direct.
In their latest email sent to owners of Sonos products purchased at retail partners stores the US Company claims “Enjoy easier control, and access to the latest features, and more powerful acoustics when you bring your system up to date. As a longtime Sonos listener, you’re invited to save 40% on any new speaker, component, or set. *
The *Relates to a single use code for people who purchase direct, with the offer stating *Single-use code applies to one order at sonos.com.
The conditions then go on to state that the offer “Cannot be combined with any other offer or promotional pricing. Valid from today through 31 Oct 2023 at 12:00 AM PST. Terms of Sale apply”.
Among the products that the 40% discount applies to are speakers, accessories, Sets, sound bars many of the products that are sold in Australia by specialist audio dealers and retailers who have been strong supports of the US audio Company in the past.
One of their largest resellers is JB Hi Fi.
As one dealer who sells Sono’s product said “The market is down, and retailers are facing significant falls in audio sales. What Sonos are doing comes at a really bad time. It’s a case of kicking someone when they are down”.
Another Melbourne based retailer of Sonos products said, “This is a really low act especially as the market is under pressure”.
Sonos who are well known for what one dealer described as “low act” marketing, has in the past moved to nobble their own customers who were original purchasers of their networked speakers, in an effort to force them to upgrade to a new speaker.
In the past the wireless speaker company who are coming under pressure from the likes of the Harman owned JBL who recently launched a new Authentic speaker competitor as well as the likes of Denon has in the past been forced to apologise for their marketing practises which have been described as “acts of desperate” to get people to buy their products.
Just before COVID the business was forced to apologise for announcing a plan that would force customers to throw away older speakers or be blocked from receiving software updates for new hardware, after a wave of criticism from existing customers.
Ironically the move was designed to also drive sales directly to the Sonon direct sell web site.
“We heard you. We did not get this right from the start. My apologies for that and I wanted to personally assure you of the path forward,” the Sonos chief executive, Patrick Spence, wrote in an open letter at the time.
In their latest aggressive move to take business away from retailers the business is banking on improving their bottom-line profits by cutting out the margins they pay to retailers.
For fiscal 2023, Sonos claims that revenues will be down 5-6% year over year and in the range of US$1.64-$1.66 billion.
The plan to basically block Sonos’s “legacy” products, was seen as an attempt to force upgrades on to customers who might otherwise be happy to use their old speakers indefinitely.
In recent months, Sonos has become more aggressive about trying to maintain profitability in the face of competition from rival technology platforms, such as Apple, Google and Amazon as well as the likes of JBL and Denon.
Currently the business is still in a fight with Google, claiming the big tech Company stole Sonos’s intellectual property and used it to launch its own smart speaker, Google Home.
