If things were looking grim for Consumer Electronics retailers, the situation could get worse as big brands like Sony, Microsoft and Hollywood movie houses start selling direct to Australian consumers via their own company web sites or subscription services linked to gaming consoles and TVs.
The retailers who are already up in arms about the lack of a 10 percent GST on goods purchased from overseas web sites are now having to compete against the vendors whose products they are selling.
A visit to the Sony web site reveals that the Japanese company has prioritised their Sony Style store ahead of mass market retailers.
The store allows consumers to buy Sony Bravia TVs; PlayStation consoles accessories, digital cameras, notebooks and accessories.
When a consumer processes to the store Sony prompts visitors to establish a Sony Style Membership.
The prompt tells consumers that as a Sony Style member they are entitled to free shipping & further discounts on a purchase.
SmartHouse has been told that consumers who buy a Sony product in a retail store like Harvey Norman and JB Hi Fi, Myer and fill in a warranty claim form or Sony incentive to get a free gift such as a Sony PlayStation or Blu ray player are then contacted by Sony and offered the opportunity to buy direct.
Australian consumers are also being prompted to buy games that play on a Sony PSP Go or gaming console. Also setting up to sell direct to consumers is Microsoft who is using their Microsoft Live service to prompt users to buy games and video’s direct.
At the recent CES Show in Las Vegas two large vendors said that they were considering giving consumers the option of purchasing goods directly from a company web site.
A Panasonic executive said “retailers are coming under pressure. Sony is selling direct and this will hurt them”.
Scott Browning, the Marketing Director of JB Hi Fi, said that brands such as Sony who have gone online are not discounting and that this is a plus. “We are a discounter and this is an advantage to us” said Browning.
He said that it was “inevitable” in the current environment that big brands like Sony would sell direct.
“I believe that the consumer today expects big brands to sell direct. There is a lot of competition out there for retailers and this is just one more element. At this stage all these big brands are restrictive in what they can do”.
When it was pointed out to Browning that US retailers were collecting personal consumer data when consumers shopped and that JB Hi Fi and Harvey Norman were not doing this, he said “It comes down to cost. We are a discounter and we have a good model, we will do this if it does not add additional costs to our operation,” he said.
He also admitted that JB Hi Fi is a stronger position than Harvey Norman as they have an existing web site and that they are already giving consumers the choice of shopping online in Australia.