Sony Execs Face Challenging Holiday Climate

Sony Electronics’ president and COO, Stan Glasgow, projected Thursday that the CE holiday sales season, although “extremely challenging,” would be buoyed somewhat by sales in certain product categories, including digital SLR cameras, TV and Blu-ray players.  At the same time, in comments at Sony’s semi-annual Executive Roundtable, he expressed doubt that the CEA’s 3.5 percent overall industry sales growth projection could be realized.

The Blu-ray category, Glasgow said, “while doing well, is not meeting all our sales expectations. But we expect good sales through the holidays.”  Although he said foresaw low-priced third-party entries on the market during the holidays, Sony, he added, would continue with a $299 entry-level price for its Blu-ray line through the season.   

Glasgow said he believes that an elongation of the holiday-TV sales season would occur, and that any uptick in industrywide TV sales would be the result of a combination of stimuli including the need to make holiday purchases coupled with the impending early-February DTV transition.  “Consumers shop later and later every year,” he added. Those trends could extend the TV sales surge well into 2009.  “There is room for HDTV growth,” Glasgow said.

Jay Vandenbree, president of Sony Consumer Sales Co., cited two other retail trend lines – brisk sales of DTV converter boxes and consumer use of gift cards – as factors that would likely also contribute to deferred holiday TV purchases – but not to any deferred interest in CE. He added that consumers were still heavily researching electronics on the Internet. “They have not disengaged from the category; it’s just a matter of time before [some] are re-engaged in the market,” he said.

Vandenbree observed that consumers, in down times, “tend to move up in quality of purchase – a ‘flight to quality’ ” – all the more reason for Sony to continue stressing education as a centerpiece of its Web site, which recently added a consumer reviews element, and merchandising. “Sometimes, we tend to undervalue what the consumer will pay for something.”

For now, only select Sony premium products, said Vandenbree, would continue to be sold under the Sony SURE (Sony Unified Resale Execution) premium-product pricing program, which rolled out in June and applies to certain SKUs in Sony’s digital SLR, XBR 7 and 8 Bravia TV, ES receiver and 1080p front projector lines. It is a program, he said, which “focuses around what a retailer needs to survive and what a consumer needs to know when he goes shopping.”  Under the plan, Sony can set the advertised and purchase price for a product and the retailer must operate under that agreement or face penalties.