Sony expands Shop-in-Shop

When Sony of Canada first launched its branded Shop-in-Shop cross-selling concept in one branch of The Brick three years ago, the marketing gurus on board had no idea just how successful it would be. Now Sony is set to roll out the program in The Bay and Eatons as the start of a major nationwide expansion plan.

When Sony of Canada first launched its branded Shop-in-Shop cross-selling concept in one branch of The Brick three years ago, the marketing gurus on board had no idea just how successful it would be. Now Sony is set to roll out the program in The Bay and Eatons as the start of a major nationwide expansion plan.

For some years now, we have been able to pick up a Sony TV set or stereo while browsing a furniture or hardware store. The electronics giant sells portable audio products in sports stores such as Sporting Life, while Playstations can be found in Toys ‘R Us. However, Shop-in-Shop is opening up a whole new way of marketing specialist electronics merchandise, and is set to become a key sales tool for Sony.

The concept, which currently exists only in Canada, is intended to make high-end electronics products accessible to a broader audience. It involves the creation of a mini-branded shop within a non-specialist store. Although Sony Corp. has not adopted the Shop-in-Shop concept on a global scale, a similar system of dedicated display areas is used in the U.S. and is currently under review as a potential sales tool in the U.K. The Shop-in-Shop concept in Canada takes the idea one step further by actually building an entire shop within the store.

Shop-in-Shop was the brainchild of Sony of Canada’s GM of national accounts, Tony Smith.

‘What we want to show is connectivity between our products,’ says Smith. ‘People want to see leading-edge technology in a dedicated environment, and that is why the concept has been so successful.’

Smith says that although sales are up considerably over last year, the expansion plan is not intended as a means of boosting sales in the short-term, but rather to enhance the long-term image of the brand. In the current competitive climate, electronics brands are vying for the best space on the shelves, so this concept ensures a prime spot for Sony goods, and enables the manufacturer to control how the products are displayed.

Since its initial launch in September 1998, the concept has been expanded to 12 Brick stores across the country, as well as four independent retailers, including Gibson Sound & Vision in Waterloo, Ont. By the end of the year, there will be 24 units in all, as Sony begins to launch the concept in The Bay and Eatons in Toronto. By late 2002, the concept should be found in many of these stores across the country.

‘We chose The Bay and Eatons to start our expansion program because these are new concept stores with a high level of emphasis on electronics,’ says Smith.

According to Maureen Atkinson, retail consultant with Toronto-based J.C. Williams Group, the idea of branded shops within a store has been used in the fashion and cosmetics industries for many years, but it is a fairly untouched market among electronics providers. ‘I think we will certainly be seeing a lot more of this from other electronics manufacturers as they become more brand conscious,’ she says. ‘It gives the manufacturer far more control and allows them to sell an overall brand rather than an individual product.’

Within the Shop-in-Shop unit, goods have their own dedicated area, which separates Sony from other brands. A full range of electronics products is displayed in a specially designed, interactive unit.

‘We are simply displaying the products in a way that is appealing to the consumers, and makes Sony goods stand out from the other brands,’ says Mitch Kavanagh, president of design company, Kavanagh Inc., which designs the units on behalf of Sony.

‘In some other stores you don’t even see the merchandise,’ he continues. ‘Every electronics product is just thrown onto a shelf together and the goods scream ‘low-price.’ We create a more inviting categorized environment that does the product justice.’

The shops have their own entrance to separate them from the rest of the store and are designed to have a clear and separate identity to the Sony Store, so as to avoid misrepresentation of the Sony Store brand.

‘The Shop-in-Shop unit is a different animal to the Sony Store altogether,’ explains Kavanagh. ‘The two are designed to be physically and cosmetically different because they are looking to fulfill different needs.’ While the Sony Store is visited by a consumer who is looking to purchase a specific product, Sony hopes that the Shop-in-Shop concept will lure the incidental customer to its range of high-end electronics products, thus reaching out to a broader demographic.

‘We are always looking for new ways to expand our distribution,’ says John McCarter, corporate communications director at Sony of Canada. ‘Sony has carved out a niche for itself by constantly seeking out ways of targeting the lifestyle needs of consumers.’

Following the success of the Shop-in-Shop units, The Brick has expanded the concept on a far broader scale with the creation of the warehouse store spin-off, the HomeShow, which opened in Toronto to a phenomenal 10,000 visitors on August 16. The new store showcases individual branded shops from the showrooms of 56 manufacturers, including Sony. Other manufacturers include Panasonic, Sealy, Palliser Home Office and The Bed and Bath Shop. Each manufacturer was able to design and set up its own unit and displays within the store.

Kim Yost, president of The Brick, says: ‘Branded shops within a store are the way of the future. We know that customers love to come to home shows, and manufacturers want to design their own venue to show their latest goods. We have taken the Sony Shop-in-Shop concept one step further by bringing all these manufacturers under one roof.’

John Torella, a retail analyst with J.C. Williams Group, agrees that more retail sectors are likely to turn towards the concept of branded shops within large stores in the future, and concepts such as the HomeShow will become more commonplace. The only cause for concern, he says, is when there is no consistency between the brand and the retailer.

He predicts that The Bay and Eatons will both make good retail partners for Sony. ‘There is a natural synergy between the brand essence and the distribution channels here, which is very important,’ he says.

Sony does not intend to advertise the new Shop-in-Shop units independently, but Smith anticipates that The Bay and Eatons will feature the units as part of their own advertising campaigns.