Sony Moves To Expand Direct Sell & Cut Out Product Defects
Sony who recently moved to slash manufacturing costs in an effort to be more price competitive has admitted that their own online sales operation is a big focus going forward.
In Australia Sony is well known for their direct sell operations and this does not bode well for retail partners claim observers, with the Japanese Company also investing in data analytics in an effort to target consumer and B2b customers directly.
On their Australian site Sony are not only selling direct they are spruiking consumers that they will price match a retail price for their goods and offering free shipping.
In the middle of the front page of the Sony Australia Online Shop, is an banner prompting consumers to visit a Sony shop over a retailer such as Harvey Norman or JB Hi Fi. The above Sony Store is located in Castle Hill NSW.
Kimio Maki, head of Sony’s electronics businesses, said the acceleration of factory automation would be combined with a greater focus on online sales and data analysis while also slashing manufacturing costs. He added that the introduction of robotic manufacturing would also help reduce product defects.
He is predicting as we reported recently, robots will take over its manufacturing lines of televisions, smartphones and cameras as the entertainment conglomerate shifts its attention to services.
He claimed “I don’t think automation alone using robots will bring enough merits. The key is to use digitalisation to link both sales and manufacturing,” Maki said in an interview with the Financial Times.
He said that installing unmanned production lines was expected to cut costs 70 per cent at Sony’s mainstay TV factory in Malaysia by the fiscal year 2023, compared with 2018.
On the marketing front, sales data will be analysed using artificial intelligence to set manufacturing volume more effectively.
Recently Sony stemmed TV losses that spanned more than a decade and steadied its financial performance by shifting to smaller volume but higher-end products.
The only problem is that LG and Samsung in the premium TV market have captured the bulk of sales in Australia leaving Sony to struggle with pricing issues in the premium market.
Apart from just selling hardware such as Bravia TVs and PlayStations Sony is desperately trying to deal directly with a consumer with Maki tasked with developing “compelling services” that will keep consumers interested and coming back, generating recurring revenue directly for the Japanese Company.
Maki said that while company would continue selling hardware and services to consumers in the short term, a meaningful part of its growth target would come from products for professional use, such as crystal LED displays for virtual video production and ball tracking technology for the sports entertainment industry.
A big success for Sony Australia has been the move to appoint Melbourne based Audio Active to sell both their premium TV’s and top end projectors into the custom install market.
Sony is also looking to target the entertainment for cars a market they have done well in in the past with their car radio’s.
Critics have long pointed to Sony’s weakness in services and digital platforms as a big reason why the Walkman maker lost the battles against Apple’s iPod and Amazon’s Kindle, despite holding a rich entertainment portfolio that spans games, music, films and animation.
The Financial Times claimed that another challenge for the Company, has been Sony’s hierarchical and siloed structure, which has made it difficult for divisions of the conglomerate to co-operate on an ecosystem that integrates various products.
This is the same problem that Mitsubishi Electric is facing.
But that was changing, Maki argued, since Sony spun off its electronics businesses into a separate subsidiary and merged audio, TV, mobile phones, cameras and medical businesses into a single organisation in April.
“By being brought together under a single entity and governance structure, we are now able to co-operate organically to create something new. That applies not only to making products but also to purchasing, manufacturing, product development and sales,” he said.