Kelly Davis’s responsibilities as vice president of Digital Imaging at Sony puts her at the forefront of the company’s camera initiatives. With Sony’s recent announcement that imaging would be one of the three pillars of the company (along with gaming and mobile), Sony has ramped up their efforts across all imaging categories. I spoke with Kelly Davis about Sony’s new initiatives and about their commitment to the photo retail channel.
JG: You recently took on this new responsibility. What’s keeping you busy?
KD: My official title is vice president of Digital Imaging, so I’m responsible for all marketing and sales of Sony’s digital imaging products, including Alpha and NEX ILC (interchangeable-lens camera) models, Cyber-shot point-and shoot cameras, Handycam camcorders and related accessories and software.
There have been a lot of challenges on the point-and-shoot line, mostly due to the emergence of better cameras in smartphones. What are your feelings about that challenge and how Sony is approaching it?
It’s no secret that high ownership and use rates of smartphones are putting pressure on point and shoots. The reality is this has forced manufacturers to concentrate on offering more value and better features in their point-and-shoot cameras. This is particularly true for categories like high-zoom and premium compacts—cameras that deliver the image quality, capture speed and zoom that smartphones can’t. Ultimately, while customers might be taking casual pictures with their phones, they are still looking for good image quality and realizing that many times, smartphones cannot fill that need.
This has forced Sony to look at what we do best in digital imaging to differentiate ourselves. By combining our advanced image sensor, processor and lens technologies, we’re able to deliver high-performance compact cameras at a variety of price points. For example, consider our DSC-WX150 ultracompact zoom model, HX200V megazoom and especially the new, large-sensor RX100 premium compact that continues to receive rave reviews since its launch this summer.
On the bright side, even though people are using smartphones as part of their everyday life, they are taking more pictures than ever before—and that’s not a bad thing for imaging. As consumers take more pictures, they realize what a smartphone is “good enough” for, and they realize they need a better camera. When you look at the industry, average selling prices are increasing, which means customers are willing to step up for more valuable features (such as zoom) to attain the image they really want.
The whole notion of wireless: it feels like the industry is just starting to get it right. Do you think that’s a really important feature going forward, and will we see it not only in point and shoots but in higher end products as well?
Yes, people are starting to share in different ways, and in order for us to be relevant to all demographics, wireless is going to be important. When done well, it lets phones and cameras each perform at what they’re good at, but the customer experience is critical. As we’ve learned in the past, if connectivity is difficult, no one is going to use it, because everyone is used to the ease-of-transfer capability of phones. I think you’ll see overall that wireless will grow in the next 12-18 months, and you’ll see it grow across all categories, not only in DSLRs but also in “point of view” video cameras.
Let’s jump to the DSLR category. For years it’s been described as a two-horse race, but Sony has shown a strong commitment to growing their share with high-quality DSLRs at every price point. How is that going?
In the industry overall, there’s room for all ships to rise, and definitely room for more than two players. We aim to use our technology to reinvent what an ILC can do.
We believe that our DSLR-style cameras offer several features and benefits not found in those from conventional camera manufacturers. For example, our Translucent Mirror technology offers faster focus, better frame rates and a more useful HD movie shooting experience. That’s an example of Sony taking our expertise in technology and offering something different.
On the mirrorless camera front, we continue to push the limits of the category, utilizing a large APS-C sensor throughout our entire NEX line to deliver DSLR-quality results in a fraction of the size and weight.
This market continues to grow, as it appeals to a wide variety of customers, including both step-up point-and-shoot users and existing DSLR owners. As a leader in this emerging category, we’ll continue to bring innovative, exciting products to market with unique consumer benefits. We believe consumers don’t qualify themselves as DSLR or mirrorless customers; rather they simply want the best possible camera quality in the smallest possible camera body. In the past, this meant compromise; starting now Sony is changing the rules—no more compromises and the consumer gets it all with NEX.
From a business perspective, we look at the business by channel, and we have really stepped up our support and partnership with the photo specialty channel. Before we entered the DSLR category, it was an area we didn’t know a lot about, because we’ve traditionally been a CE manufacturer. We quickly learned more about photo specialty retailers—about their people and their customers—and we started investing to best represent our unique value to consumers. Our goal is to provide profitable growth for our retail partners; we do that with our brand, our technologies and even our pricing strategies. This helps to ensure that retailers can concentrate on serving our customers instead of only focusing on price competition and other market issues.
I also think independent retailers recognize you’re putting resources against this. Are you finding it easier to get more distribution in this channel now?
Yes, absolutely. Our overall channel strategy has evolved over the past few years, and if you look at the market share of retailers, you’ll see a lot of changes. We’re focusing our product in the right place. Our premium products perfectly match the photo channel where customers may need assisted sales, and we’ve learned a lot over the years on how to support these retailers in promoting the unique products we offer.
Another reality is the rapid growth of the online channel—from pure-play online-only retailers to brick-and-mortar retailers that are growing their online business. We want to make sure we have products that work in this channel as well. At Sony, we really try hard to look at products by channel, and to make sure we put the right products in the right channel. This way, we can tell a story with the full suite of Sony imaging products we have, so we don’t have to just compete on price.
In the mirrorless segment, your NEX line is very impressive, but the category is getting a little bit more crowded. How do you maintain leadership in that subcategory?
The rapid growth in mirrorless demonstrates customers’ demand for DSLR performance in a smaller, lighter form factor. While some manufacturers seem reluctant to develop models that might replace the DSLR, we see it as evolving the technology to meet customers’ needs. From a product point of view, we have the combination of three essential ingredients—the lens, the sensor and the processor—and that allows us to develop products across categories that a lot of our competitors can’t.
Our power is combining these three elements and have them work together well, because Sony creates the parts and sensors in-house. As we expand the lineup in the second half of the year, we’ll be adding things like Wi-Fi capability and apps, which will allow customers to add value to their cameras and personalize them after purchase. We are working on these apps now and will launch them around October/November. By offering exciting, innovative mirrorless models, our retailers can enjoy the sales generated by a camera system that appeals to consumer demands not met by conventional DSLRs.
The younger demographic (15-25 year olds) are so dependent on smartphones that they will be tough to convert. Will you try to capture them with a different kind of product?
We constantly try to market to all of our key customer segments, and we’re looking at introducing products that might relate more to Gen Y and an overall younger demographic. For example, we’ve been closely watching the POV (point of view) video category, which is growing, especially among skateboarders, bikers and outdoor enthusiasts who are using cameras to record videos and are uploading them to share with friends, family and the world. Customers are out there showing action, and we’ll be announcing a POV line that will ship in October.
We’ll be launching two SKUs. Where Sony differentiates is in design and technology. These POV cameras are designed to be super compact and lightweight, very wearable. From a technology point of view, we have added our Sony equity, like our CMOS sensor and SteadyShot image stabilization that’s famous in our camcorders, to provide stunning, steady video. Finally, we’re adding Wi-Fi capability for direct upload to the web, providing consumers the ability to instantly share what could be a once-in-a-lifetime shot. So far, we’ve had a great reaction from consumers, retailers and press, and we look forward to a successful launch.
What’s the channel strategy?
When you look at the industry, you see a lot of activity online, and in the outdoor retail channel. One of the things we’re working on is to partner with select outdoor retailers, but we will also look at expanding to other channels. We think it will do really well in photo specialty; this channel does well with competitive products today, and we plan to have really strong distribution there.
It feels like your overall strategy is to take your capabilities and marry them across the different categories and be the best of breed, because of your technical capabilities.
Yes, the ability to take the core technologies that are our competitive edge and make our products better image-capture devices throughout many different categories is what sets Sony apart. So, you’ll see quite a bit of evolution and quite a bit of revolution from Sony over the next 18 months—taking what we do best and expanding it into different areas where we see customer growth segments and a desire for premium products.
How does this marry into the TV business, the screen business? Does Sony look at it from a macro level, where you can deliver the screens?
We’re always looking cross-category to see what our other groups are doing. We share technologies on the Tokyo side, by moving talent cross-category and cross-platform. People working on TVs last week might be working on cameras next week—bringing that best-in-class talent and know-how to a new category. No one can tell the convergence story like Sony; it’s an advantage we have, and one that we will continue to focus on going forward.
So what’s your biggest challenge ahead?
There are a couple of things. Within the DSLR world, the challenge is to get past the customers’ “legacy mentality” of there being only two major players out there, and to accept Sony as a true player in this space, not just as an entertainment company but as a true imaging company. We’re making progress here; our products are helping us get validation in this space—certainly with products like the NEX-7 and SLT-A77. We see retailer confidence growing, which is critical to our success.
On the point-and-shoot side, we need to keep innovating to keep people invested in the quality of the image. We want to focus on the premium segment, where products, like the RX100, are judged more on performance than on price. The industry has to head in that direction as well.
We’re seeing ASPs are higher, that people are moving to better cameras. It feels like it’s not just about price; rather they’re looking at who’s got the best camera. Are you seeing this as well?
We’re seeing customers educating themselves and seeing the value in better cameras, and they’re willing to step up and pay a premium for better technology-packed products. The consumer is well informed by researching online, and that’s helping drive higher ASPs. That’s one of the great values of photo specialty retailers; they play a crucial role in helping the consumer understand and benefit from the rapidly advancing technology. There will always be price competition at the low end, but that’s not Sony’s main focus or part of our overall strategy.
So with all of this going on at Sony, what really keeps you up at night?
Mostly thinking about what’s next. Sony has always been about innovation; it’s what we built our history on, and it’s what our future relies upon—faster, easier, better and more fun. People are taking more pictures and videos than ever, and we have to bring all of this together. We have an important job—to help people capture memories that last forever—and I take that very seriously.
As this industry is constantly evolving, speed to market is important, and having the agility to make moves quickly is critical. I’ve been in digital imaging for a long time, but everything is changing, and we’re all learning how do to things differently. Whether it’s distribution strategies, pricing strategies or new features, we’re constantly trying to do things better.
We continue to learn, listen and we make moves. We’re focused on staying an important player and, most important, a leader in the imaging category. sony.com
