If you’re dying to try out Samsung’s new Galaxy 3 smartphone, you might want to make a trip to Metrotown in Burnaby this month.
The Korean electronics maker is opening its first Canadian retail store in mid-July. The new 1,600-square-foot store will focus on Samsung’s mobile products – smartphones, tablets, laptops – and TVs, although the televisions will be for display only, not for sale.
“It really is conducive to more of a cash-and-carry style product,” James Politeski, president of Samsung Canada, told Business in Vancouver.
While it might seem that Samsung is following Apple’s (Nasdaq:APPL) lead in opening its own retail store, the Korean electronics giant has had showcase centres in key cities for years, said retail analyst David Gray, who owns DIG360 Consulting Ltd.
“In fairness to Samsung, they’re not copycatting Apple,” he said. “They were doing an experience showroom for quite a number of years.”
Rogers Communications Inc. (TSX:RCI) recently opened new Apple-style retail outlets in Vancouver and North Vancouver, and Hewlett-Packard Development Co. (NYSE:HPQ) opened a computer retail outlet in 2010 on Alberni Street in Vancouver.
Gray said retail stores featuring a single brand allow for better control over the customer experience. “It’s not about the dollars, but you do eliminate a middleman. It’s also brand control. You can create how customers interact with your brand if you own the store. If you’re one product on a shelf, alongside every one of your competitors, you don’t control your brand the same way.”
It’s a trend that does not bode well for electronics stores like Best Buy Co. Inc. (NYSE:BBY) and Future Shop, whose sales are already being eroded by increased online buying.
“Samsung’s not the nail in the coffin, but there is a bigger trend afoot where the technology brands themselves are seeing that big box channel as less relevant and seeing an opportunity to sell direct,” Gray said.
“But they’re not going to do that in every market. There is a huge cost to doing it. I don’t necessarily see Best Buy, Future Shop and the like going to zero.”
Politeski said the decision to open a Samsung retail outlet in the Vancouver area was largely a response to the reaction the company got from its demonstration pavilions at the 2010 Winter Olympic Games.
Having control over its own retail store gives Samsung important metrics on its products.
Consumer feedback is an key part of how companies like Samsung design their products. •
