Das: Communication Key To Samsung Holiday TV Success
Black Friday is now upon us, and as shoppers dash out to take advantage of the latest and greatest TV deals, HD Guru decided to celebrate the occasion by talking with Samsung TV marketing point man Dave Das to get a handle on what’s changed this year for Samsung TV sales and what the forecast might be for the year ahead.
Das, who is Samsung home entertainment marketing senior VP, spoke with us earlier this week, just after the company revealed that it set a new monthly record in October by selling more than $1 billion worth of TVs in North America. In 4K UHD TVs, Samsung said it accounted for more than half of all big screen TV sales in the third quarter of 2015, or 52.1 percent of sales in the U.S. and 54.4 percent in Canada.
In the statement, the company attributed some of the success to an expansion of “interactive experience marketing,” including the expansion of Samsung Entertainment Experience areas to about 600 Best Buy stores, offering dedicated brand stations where customers are encouraged to explore hands-on Samsung products, including SUHD 4K TVs and audio systems.
Similarly, the company said it installed a brand wall made of Samsung TV screens in about 2,600 Walmart stores.
Samsung also revealed that it has made advances in TV customer satisfaction, winning two consecutive customer satisfaction awards from J.D. Power in 2015. The survey of 3,750 consumers who purchased an HDTV in the past year showed Samsung as the top brand in customer satisfaction for TVs 50-inches and larger for the past two years.
Our question-and-answer interview with Das follows after the jump:
Q: How did the sales and merchandising experience this year compare to Black Friday’s of the recent past?
Das: We saw a greater composition of the 9- or 11-day Black Friday period, depending on how you want to look at it. We saw more business coming on the prior weekend than in the past, and I think that has a lot to do with general merchandisers trying to capitalize on the food traffic. With the earlier openings, more and more shifted Friday into Thursday, and of course the online component is driving Cyber Monday sales. So, we are seeing more of a spreading out of the sale period, but Friday itself still is the largest day for sales.
Q: Samsung recently revealed a record $1 billion month in October for North American TV sales, what does this say about the growth potential for the TV business in the future?
Das: We see tremendous sales growth opportunity in the future. We anticipate that Samsung will continue to grow its business in 2015, and we attribute that recent sales record to overall stronger holiday expectations and the plans that we’ve made with our retail partners. We anticipate growth during Black Friday. Our expectation for the industry is single-digit growth over the two-week [Black Friday] sale period, but Samsung’s goal is to continue to outpace that and build market share. According to NPD market research, our U.S. TV market share on an annual basis is about 35 percent in total TV, but when you look at any premium segment of the market, whether it’s 4K TV, large-screen TV, higher average selling price TV, and smart TV, Samsung has greater than 50 percent of the market. And last year, during the Black Friday period, we got close to 50 percent, at about 45 percent. We still see room for growth, and for our market share improvement, and on top of that we still see the industry enjoying growth around the Thanksgiving Holiday. So, positive opportunities abound.
Q: Samsung mentioned that its $1 billion one-month TV sales record was assisted in part by the use of Samsung Experience merchandising zones in Best Buy and Samsung merchandising walls in Walmart. Why was the outcome of these efforts so significant?
Das: It’s Samsung’s practice not to comment on what we do with specific retailers, but the use of tools like shop-in-shops, brand spaces and education zones, comes from our belief that it is always in the best interest of our customers to experience the breadth of our portfolio and to be educated on the technologies in such a setting. So, Samsung is working with our retail partners to create an opportunity for shoppers to learn more about the capabilities of our TVs, at a time when things are getting much more complex in the TV industry.
With the Samsung brand walls that we worked with retail partners to create, we started with a core objective to introduce consumers to the Samsung portfolio of TVs, explain the step-up benefits, and then introduce them to the broader ecosystem of Samsung products.
Seven years ago the customer walked in with a certain idea of what they were prepared to spend on a TV, looked to decide between technology and brand, purchased the TV, took it home, connected it to the cable or satellite TV service, and they were pretty much set up. These days, a customer not only walks into a retail store but has been conducting a lot of time researching and often purchasing online. People are living in an omni-channel world today. They are experiencing far more touchpoints in their research and purchase decision and when they get into a store they are confronted with a dizzying array of technology – differing resolutions, and differing capabilities of smart TVs, so the TV itself has become more complex, and the shopping journey includes many more decisions.
Then add to that the way that consumers are enjoying content and the way it is being distributed has changed dramatically with the advent of over-the-top streaming channels. So you put all of that together and it has become a much more complex world. So what Samsung has set out to do in partnership with its retail partners is simplify the process, educate consumers on all of these technologies, like 4K and HDR and the capabilities of our smart TVs and at the same time, show them how Samsung smart TVs interact with the whole ecosystem of Samsung products, whether they may be smart phones, tablets or smart appliances. In general, as a result of these efforts, we have seen a lift in our sales. In particular, we’ve seen that the mix has improved. So, as consumers become more educated they understand the benefits of the more premium products and the step-up features they provide. Customers are voting with their wallets, embracing the advanced designs and buying a higher tier of Samsung TV.
Q: What impact is this having in the way consumers are buying TVs in general this year? Are more customers returning to the brick-&-mortar showrooms for education and a demonstration before buying a set?
Das: The growth we see is omni-channel, really. Actually, we see that purchases online are growing along with sales in physical stores, but I make the caveat that that is what we are seeing from Samsung’s sales. The individual dealers will have to comment on how things may or may not be changing for in-store vs. online sales of other brands and products. In general, we still see that sales online are growing, sales for Samsung in brick-&-mortar are growing and sales of products through Samsung’s direct online website are growing. These multi-touchpoint efforts are complementing each channel and communicating more clearly the many features and benefits of Samsung products to consumers. We see growth in each segment. The number of touchpoints – consumers researching products online and coming into stores – has doubled over the past four years, and the percentage of those touchpoints that contribute to sales online has doubled as well.
Q: Do you see Samsung expanding these efforts to more dealers and websites in 2016 and beyond?
Das: At Samsung we take a very measured approach to things, so it may be too soon to comment on that. We always evaluate the benefit and make our decisions based on that.
Q: New this year has been the message of high dynamic range (HDR) and wide color gamut (WCG) coming to the 4K picture. How is that message impacting sales of Samsung TVs?
Das: It’s great to see how rapidly consumers have come to appreciate it since we first started talking about it at CES last January. All of Samsung’s flagship SUHD TVs have the ability to display which I will call the highest capability to display HDR content. I will also note that all of Samsung’s 4K UHD TVs are HDR compatible. Consumers are absolutely embracing HDR and are in turn embracing SUHD TV, because they see the benefit in terms of better contrast, better brightness and better color. So, when you combine the higher resolution of 4K with the additional information of HDR, it’s a stunning picture and consumers easily grasp the benefits.
Q: What impact is the lack of a finished standard for HDR having and how will that change when a standard is issued?
Das: The HDR standards are being incorporated in the Ultra HD Blu-ray content formats, and Ultra HD Blu-ray players will be transmitting the content for the standards that are being set. That means the consumers will have a very clear reason why they should be buying an Ultra HD Blu-ray player and 4K Blu-ray movie. Based on the demos that I’ve seen it is night and day. When you are playing an Ultra HD Blu-ray disc on an Ultra HD Blu-ray player connected to a Samsung SUHD TV the colors and brightness are so readily apparent. It is one of the most compelling side-by-side demos I’ve seen in many years.
Q: As 4K Ultra HDTV has evolved we’ve seen a decline in features and capabilities of large-screen Full HD 1080p TVs. Is 2015 the last year for Full HD TVs 60-inches and above from Samsung?
Das: That’s an interesting question. I think you might see an offer from Samsung in 2016. As always, Samsung will use feedback from its retail partners and monitor the input of consumers voting with their wallets. We will always make changes to meet consumers’ needs. You will probably see an offering and we will let consumers and retailers dictate how long certain technologies remain in the market.
Q: The price delta for 4K Ultra HDTVs between the 60-inch and 70-inch screen sizes is still quite high versus Full HD. Do you see that price delta coming down significantly for those very large screen size class models in 2016?
Das: For Samsung, we’ve traditionally had great success with 55-inch and 65-inch in large screen and in recent years in 75-inch and 78-inch. As always the panel manufacturers and factories are working to make those larger screens more affordable. I don’t have a handle on where panel prices will be next year, so I can’t say specifically what the price deltas will look like next year at this time.
Q: How does Samsung aim to continue to grow in 2016 and beyond?
Das: Regardless of the competitive climate next year, it is going to be on the same strength and foundation that we have employed for the last 9 years of leadership in the global TV industry, and that’s a focus on bringing the best new technology to market, to bring unparalleled design to market, and to bring innovations in smart TV to market. We will continue to work with our retail partners to educate consumers on the benefits of Samsung TV, offer a broad portfolio of products, and educated them on the quality and benefits of Samsung.
By Greg Tarr
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