CES 2009: PRO Urges Vendors To Simplify Biz Practices

By Alan Wolf -- TWICE, January 8, 2009

LAS VEGAS — The Progressive Retailers Organization (PRO Group) will sharpen its focus on core competencies in 2009, while banding with other buying groups to urge vendors to simplify their business practices for the independent channel.

“We can’t be everything to everybody,” PRO Group executive director Dave Workman told member dealers and vendors during the group’s annual International CES cocktail party Wednesday night at Bally’s. “We have to do the best job we can in a slow-growth environment.”

To that end, 2009 will be “a year of focus” for the specialty A/V organization, as it rides out an expected wave

From left, PRO Group’s Dave Workman, Panasonic’s Kate Beck, and Jim Ristow of HES at PRO’s annual CES cocktail party, held Wednesday night at Bally’s .

of dealer consolidation in what Workman described as “retail Darwinism.” Those who withstand the recessionary rigors will come out the other side as stronger, more profitable businesses, he said.

To help independents through this “fluid and dynamic market,” PRO has banded together with the four other major CE buying groups – NATM, Nationwide, Brand Source and its A/V specialty division Home Entertainment Source (HES) – to urge key vendors to simplify their policies within the channel.

“It can’t be business as usual,” Workman said. “Things have to simplify.”

A key point of contention, cited in an open letter to vendors from the heads of the five buying organizations, is the inventory mark-down process, which puts the burden of consumer rebates on the retailer, and which change too often to allow merchants to advertise the latest deals.

“We need these scan-down policies addressed and streamlined,” Workman said. “Somebody has to step forward and lead on this.”

Meanwhile, PRO’s merchandising and distribution alliance with HES continues to deepen. The two groups will hold their first joint vendor summit in February, and will conduct an education forum with the Mobile Enhancement Retailers Association (MERA) in March. PRO will also be on hand during the Brand Source/HES spring meeting in Dallas this March, and the partners are aligning line commitments and reviewing “a suite of services” for members, Workman said.

PRO will also ramp up its recruitment efforts this year, targeting CE/majaps dealers with “upscale aspirations” in an effort to replace the volume lost with the shuttering of Tweeter.

Workman said PRO safeguarded its programs in anticipation of the loss of Tweeter, while members spent the last six months lowering their cost structures to prepare for tougher times. Indeed, business remained solid through September with year-to-date sales up 7 percent for the group. But revenue was down 1 percent to 2 percent for all of 2008 as a result of the financial market meltdown in the fall, with smaller average basket size offsetting an increase in transactions.

“Every member to a man has said they’ve never seen anything like this,” Workman noted. And while a pick-up in post-holiday sales has carried into January, “We’re still measuring trends in days,” he said.