A Diverse PRO Group Expects Sales Growth

By Steve Smith -- TWICE, 5/5/2010

Scottsdale, Ariz. - A more diverse Progressive Retailers Organization (PRO Group) is holding its annual meeting here this week, with suppliers prepared for growth as the economy has begun to turn.

George Manlove of Vann's (from left), PRO Group executive director Dave Workman and Walt Stinson of ListenUP

The buying group of mostly specialty A/V retailers has undergone a transition since its meeting last May, now with 17 members - one less than a year ago - and expected annual sales of $2 billion, $200 million more than last year, due to a slowly improving market and expansion by such members as Sixth Avenue Electronics, Paul's TV and others.

Dave Workman, executive director of PRO, still described business as "choppy" -- a favorite adjective used by the industry this year. "Business has been up and down. Trying to match last year's [sales in dollars] for flat screen in the first quarter has been tough because you have to sell more units. But home audio has been a bright spot."

And its membership has changed in 12 months. Anderson's, MyerEmco and Abt are gone, along with Flanner's, which ceased operations earlier this week.

But new members have come on board in the interim, namely Paul's TV, World Wide Stereo and Bill Smith Inc., which is more of an appliance/electronics operation.

For more on the PRO Group check out Steve Smith's Blog.

When asked what the new members bring to PRO, Workman said, "They are varied companies ... but there are commonalities in their businesses with us. World Wide Stereo is very respected in the business. Bill Smith joined us because it wanted to improve its electronics business. They do more appliances than electronics."

He added, "The new members bring something a little different. You can't have 17 members that all have the same [business] model and all act the same. Buying groups work if there is a common interest and there is some diversity. You don't want one mindset."

One common mindset, at least of Workman, Vann's George Manlove, and ListenUp's Walt Stinson, who also sat down with TWICE Tuesday evening, is not getting the chance to introduce 3D TV.

"We believe that specialty retailers have always been best suited to introduce new technology," Manlove said, "and some manufacturers are questioning the long-term decision of having big boxes introduce it. If they had to do it over again, they'd probably ask for a mulligan because the experience on the sales floors has been unacceptable since they can't explain the technology."

Stinson pointed out, "Manufacturers knew [specialists] could introduce this type of technology, but they lost that knowledge. With all the changes and turmoil in their companies, their institutional memory isn't what it used to be."

The good news for PRO is that its members are "starting to get some decent supplies, from Samsung and Panasonic."

Workman stressed that 3D TV is "a marathon that has to be focused on for the long haul, for next year and the years after. It isn't about immediate numbers. [At retail] you have to do your blocking and tackling."

He noted that while consumers know 3D from the movie theater, "They don't understand the nuances of the home experience, about audio quality, using HDMI 1.4, the types of glasses to be used, why the image may be blurry at times ... there are so many questions -- questions that cater to a specialist's expertise."

Workman added, "The worst thing for everyone would be a bad buzz in the market based on a bad retail experience."

The issue of being bypassed in 3D TV led to the Workman to the key issue of support -- or lack of same -- of specialty retailers by major brands.

Workman said it was "premature to discuss brand realignments" by PRO but there have been discussions about the "pecking order of support. We have been vocal about channel strategies with our suppliers and want to hear more than just words."

He noted, "There has been movement by a number of manufacturers, sincere and positive movement with plans and not just words [to support specialists]. This is a departure."

Workman said his group realizes that when shortages occur, which has happened in the first quarter, "The biggest retailers will get preference in this business. What we are looking for is manufacturers to create more balance is distributing product."

(For more on the PRO Group meeting, visit www.TWICE.com.)