Sony Will Embrace Internet Sales, Aoki Announces

Where Sony goes, the electronics industry follows. And Sony is going on the Internet—not merely with product information and links to dealers, but with sales direct to consumers. The announcement was made late in January by Sony Electronics president Teruaki Aoki. "We cannot neglect the customers' viewpoint," Aoki said, acknowledging that serving consumers is a higher priority for the electronics giant than protecting dealers.

Sony is the most widely recognized brand name in the world. The company has long been selling its personal computers and a few hard-to-find products on the Internet, but Aoki's announcement is the first step by a major manufacturer into what will undoubtedly become one of the dominant modes of commerce in the new century: direct sales. The move will have an enormous and permanent effect on retailers of all kinds.

Aoki said at a news conference that his company has been discussing the subject with dealers for months. Late in 1999, Sony authorized six of them for Internet sales, in effect letting the dealers take the risk. Now Sony executives have decided the time is right for the company itself to go online—even if that means alienating some dealers. "Retailers don't like us to sell our products over the Net," Aoki said. "But from the customers' viewpoint, if they want information about Sony products, it's very natural for them to come to our website."

Sony will gradually phase in Internet sales of consumer goods over the coming months, including audio and video equipment, but will continue to include links to its dealers on its site, Aoki said. Professional gear will probably be offered later. The company's strategy is to support dealers as much as possible, while taking advantage of the truly global reach offered by the Internet. Sony's new Internet services division is developing a program to help smaller retailers build their own websites.

Forrester Research predicts that online sales of consumer electronics goods will reach $11.7 billion in the US alone by 2004—a significant percentage of the Consumer Electronics Association's official estimate of $80 billion for 1999.