Carol Spieckerman: I’ll start by asking what was behind your decision to make organizational changes that shift resources away from buying office support and toward what you guys are calling shop front activities, such as in-store sales training, merchandising, and other consumer-focused engagement initiatives.

Phil Molyneux: The simplest answer to that is that I want our organization to get closer to the consumer, and to understand more about our consumers, in terms of their wants and needs. We need to participate at the shop front or retail point level, learning and growing and communicating more effectively. Working with the buying offices of our retail partners for many years has been extremely good for us, but our need to understand the consumer on a different level is evident. Our new initiatives allow us get information on why a consumer decided to buy one of our products or, more importantly, why they didn’t decide to. Having our own resources to complement those of our retail partners, in terms of salespeople, allows us to better explain the value of our products to consumers, and to give them a more compelling reason to commit. At the same time, we further the education of our retail partners’ salespeople. It’s a win for Sony, the retailer, and the consumer as they are more informed and confident in their purchases.

Spieckerman: You mention gathering information beyond traditional point-of-sale data, and finding out, perhaps even anecdotally, why a customer didn’t buy something. What types of store-level insights are you looking to get from your field teams and retail personnel?

Molyneux: There’s so much information out there, but I think one of the key feedback elements is the features of the product that the consumer would like to see in the future. For example, with a digital camera, is it a higher zoom that they’re looking for or a faster shutter? This kind of rich insight can be taken directly from the consumer. Another benefit is that we get a real-time view of what’s happening in the market, in terms of the competitive landscape and changes in dynamic pricing, which flows back at the press of a button or through a phone call. By aggregating that data, we’re able to move faster and react quicker in the market, ensuring that our momentum is kept up. Those are two clear examples, but there are many, many others.

Spieckerman: Localization has now moved to hyper-localization, where a lot of retailers and brands are using data insights to customize right down to the neighborhood or store level. Are you going down to that level?

Molyneux: I think it’s an inevitable direction and of course we need to do that in collaboration with our retail partners.  We’re all looking to optimize SKUs by store so that our philosophy is optimized to its best potential. That leads not only to feedback at the store level, but also to managing some fairly big data, and diving into the analytics and analysis in order to make sure you’ve got that right.

Spieckerman: Is part of the initiative to also layer on more robust analytical capabilities?

Molyneux: That’s the direction for sure, and it’s something that I think the industry is trying to push forward. We want to be there at the forefront and make sure that we’re leading practice from that perspective.

Spieckerman: Sony, like a lot of companies these days, is a hybrid operation, in that you have a wholesale business with your retail partners, and then of course you have your own stores. How do you see the shop front effort working between those two business models? Do you see it as complementary or are you looking at two separate approaches?

Molyneux: It’s complementary, and let me explain why. We have our own Sony stores and through them, we have the ability to demonstrate the very best of Sony and the complete picture of our company, including our music, pictures, and movie content, in a seamless manner. In third-party retail stores, you can’t necessarily collect the right product or content and services to demonstrate the complete power of the Sony position. We can do that in our own stores, and by working very closely with consumers we also learn what works in retailing, what engages the consumer, what messaging is working, and what value statements work around the products. We can then support our third-party retailers in taking that on board to accelerate their business with the Sony product set or content set.

Spieckerman: Even though we see them loosening quite a bit, retailers can be quite opinionated about their own environments in terms of what they let in and what they don’t. How have they responded to the plan so far?

Molyneux: With regard to the sales and merchandising resources that have been deployed to the shop front or retail point, we’ve been talking very closely with our retailers over many months now and explaining our direction, the rationale for our strategy, and the benefits for our retail partners. They get it and support it, and they’re embracing the value. It hasn’t come as a sudden shock to them, but as a predefined plan that we’ve built and considered them a part of, so it’s a very positive movement for both sides.  We’re in a partnership and we have strong relationships with our retail partners. It’s very important to discuss and collaborate and fine tune things together.

Spieckerman: How are you determining which tasks you hand over to third parties and which ones you keep in-house?

Molyneux: There’s science behind that. We’ve done a lot of work looking at the retail landscape across the U.S. and the different channels and then deciding which relevant in-house resources we need to support our priorities across that landscape. Our duties are very clear on the internal resources. From there, we can define the number of stores that we want to cover across the U.S., and the third-party merchandising resources that are required to make sure we’ve got the right level of coverage and engagement with consumers. There’s a great deal of work behind the plan.

Spieckerman: It sounds like it. Can you tell me a little bit about your golden spaces concept? I believe that it’s something that you originated at Fry’s. Is it something that you plan on rolling out to additional retail locations?

Molyneux: What we call the golden space is really premium execution that demonstrates the beauty of our TVs and the high quality of our surround systems. It allows the consumers to actually use an LCD panel that’s built into the execution to decide which content they want to show, what configuration of surround sound, or what picture type they want to choose. It gives them a real feel of what the impact and value of a Sony TV and surround system could be in their own home. The concept actually came from Sony in Europe. When I was in Europe prior to my assignment over here, I saw that it worked very well, and so I picked up the idea and worked with my team here to come up with our own version of it to deploy within the U.S. market.

We’ve worked very closely with Fry’s Electronics on the golden space, as well as many other executions, and we have multiple locations with Fry’s where the golden space is executed. It’s proving immensely beneficial in terms of stepping up the model chosen by the consumers. We’re not going for the base model but aiming towards premium models with higher performance, which is good for Sony, good for the consumer base, and good for Fry’s Electronics. As we move forward, we’re looking at different ways to modify the execution, making it a lighter investment but a bigger return, and we’ll be expanding that across the U.S. to relevant places.

Spieckerman: It sounds like a great way to keep customers in-brand, especially when cobbling brands together to create a solution is such a common consumer electronics dynamic.

Molyneux: Yes, and I think it’s really about the experience that Sony can deliver. In the golden space, we’re delivering trailers of our Sony movies or music videos from Sony Music, so you’ve got that total picture of Sony that the consumer can play with, and they get that great experience with the combination of our audio and visual products.

Spieckerman: I’ll have to go check one of those out.

Molyneux: Please do. You’ll enjoy it.

Spieckerman: What role does omni-channel play in your retail strategy? Like a lot of retailers, you’re moving toward some smaller formats, which allows for the creation of broader assortments online and the facilitation of interaction between the two. Is that part of your plan?

Molyneux: As a route to market and channel, we’re very engaged with third-party e-tailers. We have solid relationships and are pushing the envelope in terms of how we explain our products and services and content in that dimension. We are also very aware that many of our larger partners are pursuing a fairly aggressive multi-channel direction, and we’re collaborating, in terms of looking at our long tail line of products that won’t necessarily be appropriate to put in third parties’ stores because of the number or the breadth of products. What we can do is work with them on that long tail on their online platform, and connect a link via our systems that allows them to make a direct delivery to the consumer’s home. That gives you some idea of the level of collaboration and partnership we have, and, again, it’s a mutual win because we take cost out of the chain and that’s a good thing all around.

Spieckerman: I know that driving those types of efficiencies is a big focus for you. You mentioned that the golden spaces philosophy was borrowed from your years of experience in the European market. Are there any other inspirations brought over from Europe that you’re excited about?

Molyneux: I think I brought some learning over from Europe, but conversely I’ve been able to transfer some of the great knowledge from the U.S. back to Europe and to other parts of the world. Sony is an immensely capable and strong company with a great brand and a great history. We’re sharing best practice information around the globe to make sure that we all step forward and continue to focus to a greater degree on the consumer. I think the advantage that I had coming into the U.S. as head of SEL was that I was completely fresh and could look at the market in a very fresh manner. I spent the first 60 days of my time here travelling around the U.S., meeting our teams and, more importantly, meeting our partners, and visiting roughly 250 stores, so as to understand the retail landscape and the competitors, how people were operating, and who was engaged with whom. That gave me a very good basis for planning what my team and our retail partners needed to do together in the U.S. I built a fairly comprehensive strategy around the consumer that talked about excelling at all of the nine touch points that we have, and making sure that we had consistent quality and high value messages around our product and service sets. We’ve been building that out ever since and making, I would say, very strong progress.

Spieckerman: It sounds like you did a lot of what one retail executive called “management by walking around”.

Molyneux: Exactly. I’m a great believer in that.

what's NXT?

Spieckerman: I’ll wrap things up by asking you what you see as the next big evolution in retail. What’s top of mind for you?

Molyneux: I think that the convergence of technology and the seamless movement of content is a direction that’s coming. From a consumer electronics point of view, our challenge is to explain the value, usability, and great experience the consumers can have with that kind of configuration of products, services, and content. I think that we have a leadership role to play there as well. On the other side, over the longer term, we have some very clear directions that we’re pursuing, but if I shared that with you, I’d be telling the whole world so I have to get back to you on that. We’re exploring new ways to create a more engaging and informed experience for all consumers, so that they can choose the right product to meet their needs.

Spieckerman: Well that’s going to be fun to watch.  Thank you for your insights, Phil.

Molyneux: My pleasure, Carol.

check out more retailNXT interviews


search our site

SIGN UP. CONNECT THE DOTS.
Subscribe to The Right Brain of Retail and join over 3,000 passionate retailers, suppliers, agencies and retail geeks who receive our newsletter and regular email insights. Each one packed with our between-the-lines take on how the ginormous world of retail is connected across categories, business models, touch points and borders.

Enter your email address here.