By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Riding the wave of a revived economy and big-TV mania, the Nationwide Marketing Group (NMG) steamrolled into the Superdome here earlier this month to mount the largest convention in the buying organization's 33-year history.
In what executive VP/director Robert Weisner described as a tribute to late co-founder Lee Guttman, Nationwide filled the stadium's floor with 3,000 attendees and 175,000 square feet of exhibit space housing 140 appliance, electronics and furniture vendors — a far cry from the group's first 10,000-square-foot show in 1971.
Since then, Nationwide's ranks have swollen to some 2,400-member dealers operating 6,000 storefronts, which generated $8 billion in revenue last year. And, according to president/director Ed Kelly, the good times are just beginning to roll.
"This is the most exciting time I've seen in 40 years," he said. "We've got so many new products that are forcing price points higher, and so many ways to sell them, that you don't need to open more stores to grow."
Spearheading that growth is HDTV in all its guises. Kelly estimates that by 2007, U.S. households will have replaced at least half of their 300 million analog sets with higher-tech TVs retailing for $1,000 and up, recalling the changeover from black-and-white to color units in the 1970s. "As dealers, we made a lot of money back then," he said, "but we don't have any idea how big this can be. The speed of change is amazing."
To ensure that Nationwide's largely white goods membership catches the flat screen wave, Kelly has developed a retail fixturing program designed to ease their transition back into video by upgrading high-visibility store areas with a clean, uniform look. The group has also brought in former Thomson Consumer Electronics national accounts sales VP Mike Decker as chief electronics merchant. And, to ensure it gets its fair share of inventory, the group promises more accurate forecasting and possible direct sourcing initiatives in Asia.
On the appliance side, Kelly said the industry is enjoying solid 4 percent growth buoyed by rising housing starts and the post-9/11 shift in disposable dollars from travel to the home. Nevertheless, management wants more market share in majaps, and plans to accomplish that with a more aggressive promotional calendar to help counter competitors' no- or low-financing deals.
Also aiding the group's appliance efforts is the addition last fall of Electrolux veteran Adam Thomas as chief white goods merchant. Both Thomas and Decker have assumed many of the duties previously shouldered by Guttman, allowing Nationwide to consolidate its Pittsburgh buying offices into group headquarters in Winston-Salem, N.C.
Also joining Nationwide, albeit in a part-time capacity, is former NARDA president/CEO Elly Valas, who now organizes the group's PrimeTime! convention seminar program.
Elsewhere, executive VP/director Les Kirk said Nationwide is enjoying strong double-digit growth in its warranty business, which is benefiting from accelerating sales of high-price TVs, and continues to fortify its consumer Web site, BrandsDirect.com, which serves as an informational and dealer referral resource.
Nationwide has also established a media center in Atlanta under the auspices of team member Steve Bryant, from which the group produces TV and tabloid ads, publishes an in-house magazine, and shoots streaming video training sessions for its Intranet site.
The positive mood was also evident among member dealers. "We had a great year and we started off 2004 with a good January," said Bob Cremer of Aronson Furniture in Chicago, who credits his company's success to good service and selection, merchandising aplomb and "great brand names."
For Garey Alima of A-1 Appliance & Electronics in Harvey, La., the New Year is also off to a "great start," thanks to a "really strong white goods business," and "fantastic" momentum in big screen TVs. He attributes both to a growing local economy and "pretty good housing starts," although his video sales received an added boost from football's recent Sugar and Super Bowls. Alima said, however, that ultimately it all comes down to service. "If you treat the customer right, you will do well."
Bray & Scarff principal Dennis Scarff also reports that "business has been good," particularly in high-end appliances, within his Beltway trading area of 3 million consumers. "Our fortunes are tied to the Federal Government, and the government won't allow business to go down," he said.
And despite a particularly wicked rash of winter weather in the Northeast, the NECO Alliance "came out ahead and is still growing," reported Mel Hunger, executive director of the Nationwide affiliate. "CE is still tough due to product availability" — ostensibly in DLP — "but we're still picking up market share at both ends of the spectrum."
According to video vendors at the show, constraints on DLP supply are expected to ease by the beginning of the second quarter, when Toshiba also joins the fray. Meanwhile, JVC touted its proprietary digital image light amplification technology (D-ILA), which made its long-awaited rear projection debut at CES. According to VP/buying groups Keith Ido, two versions of the three-chip system will begin shipping this July: a 52-inch, $3,500 street price set, and a 61-inch, $4,500 unit. Both will be followed in late October, early November by integrated versions that will each retail for an additional $500.
"We look forward to this new product," Ido said of the new micro-display entry. "We have had a great response from dealers, and it should do very, very well."
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.