Samsung Electronics who has quietly been expanding their own retail presence in Australia via their own branded retail stores or a store in a store concept is set to expand even further as the Company takes on Apple stores and potentally new stores from LG.
The Company who is currently expanding its retail presence in two of its largest markets-Europe and North America believes that consumers get better service at either a Company store or when served by a Samsung employee working in a Samsung store within a store.
I have just got back from Europe where Samsung now has 31 stores, they also plan to open 90 kiosks inside mass retailers similar to JB Hi Fi and Harvey Norman.
Recently Samsung teamed up with Best Buy to set up 1,400 prominently displayed “store-in-store” kiosks, complete with Samsung-trained staff. In December, Samsung hired Tim Gudgel away from Apple, where he played a key role in designing Apple’s retail stores.
Unlike Apple, Samsung doesn’t own the vast majority of its stores, instead, the company says it leaves management of its shops to outside companies, overseeing them to make sure the stores have a consistent feel. Apple, by contrast, is deeply involved in managing its stores-from interior design to on-site technical help.
The Wall Street Journal claims that Samsung’s retail push comes amid increasing pressure in the smartphone market from a wave of new handset makers that sell lower-priced phones based on Google’s Android operating system. In the fourth quarter, the company’s profit growth slowed sharply due to stiff competition in the mobile market, where it derives the majority of its profits.
In March Samsung Australia will kick off a major marketing campaign for their new range of tablets which includes a 12″ model that Company executives believe could replace the need for a notebook, currently Samsung retail staff are undergoing training as the Company is banking on tablets to replace lost notebook sales after the Company decided to exit the Australian PC market.
They are also looking to hold onto market share in the smartphone market and while Samsung doesn’t disclose smartphone shipments, analysts estimated the company sold anywhere between 85 million and 87 million smartphones in the fourth quarter, giving it almost a third of the global smartphone market share.
In the past, Samsung relied primarily on shelf space at mass retailers in Australia now the Company is pushing to achieve more sales via their own retail operations while also building their premium brand presence.
Executives know that Apple gained a reputation as a premium brand through its 420 global retail stores now the Australian operation of the Korean Company is trying to replicate Apple’s success at a time when Apple sales are starting to slow.
Apple’s stores drew total revenue of $7 billion in the fiscal first quarter ended Dec. 28 and generated average revenue of $16.7 million per store. It had 21,000 weekly visitors, on average, to each store.
In Seoul alone, there are more than 100 Samsung stores. Samsung brand shops are also found across mainland China, Taiwan and Hong Kong. After first experimenting with “store-in-store” kiosks within retail outlets, the company is now opening more stores with its own logo, where consumers can try out its smartphones, tablets and cameras.