Brand Source Launches Car Buying Group At International CES

LAS VEGAS — Brand Source officially launched the new car stereo division of its buying group at International CES in conjunction with the Mobile Enhancement Retailers Association (MERA), and it announced the first five suppliers to join the group are JL Audio, Alpine, Eclipse, Mitek and HushMat.

The new Mobile Entertainment Source (MES) division of Brand Source is the second car stereo buying group to emerge in the past 18 months, as car specialists struggle to compete in an increasingly difficult car stereo aftermarket.

"The manufacturers have finally realized that buying groups are an important factor. For 20 years it's been a 'no no' in car electronics — we were all growing. But now we've been in decline and this gives us the opportunity to buck that trend," said Rick Mathies, executive director of MERA, which allied with Brand Source to create MES just prior to CES.

MERA, with 350 car stereo specialist members, hopes the new MES group will attract 1,000 to 1,200 members. Jim Ristow, executive VP of Brand Source' Home Entertainment Source (HES) division, said he hopes MES will follow the path of HES, which has grown from a volume of $250 million in 2001 to more than $1 billion.

The aim is to create "top notch retailers where consumers feel comfortable bringing their cars to be worked on," said Barry Vogel, VP of MERA and president of The Ultimate Edge in Oswego, N.Y.

Retailers will receive unified signage, point-of-purchase materials, business and health insurance, business financing and, eventually, national advertising and merchandising.

Vogel asked, "How many times have you found that the hot new products came out only to be snapped up by the big-box retailers?" He added, "We don't have to be the little guys anymore. Together we're a big guy and we're going to get bigger."

MES will benefit from Brand Source's three warehouses which supply one- to three-day shipping to 75 percent of the country. Vogel said retailers can save 2 percent to 5 percent on freight cost on merchandise orders, so if you buy $100,000 in merchandise a year, you could save about $3,000.

Ristow said Brand Source has 300,000 square feet of warehouse space. The warehouse acts as a national account where the vendor need only worry about a check from one account. Some vendors, such as JL Audio, will ship direct to stores while Alpine will ship to the warehouse. Details of the vendor programs will be finalized by the MERA KnowledgeFest, to be held March 15-18.

MERA retailers may elect to join MES, but MES membership is not mandatory.

For its part, In Car Experts (ICE), the first car stereo buying group, which launched in May 2006, announced at CES that Kenwood will join its buying group, adding its name to a roster of suppliers including Rockford Fosgate, Pioneer, JL Audio, Boston Acoustics, Auto Page, Peripheral Electronics and Metra Electronics.

The group also announced a unique partnership with Enterprise car-rental company. If a member wants to supply a customer with a rental car while his car is in the installation bay, Enterprise will supply a discounted rate to be announced.

ICE said it differs from Brand Source's MES in that it is selective in its membership and claimed it has turned down more members than it has accepted. Retail members include 138 storefronts, and the group plans to grow to approximately 600 storefronts.

Executive director Rob Elliott said ICE will focus this year on the emerging categories of car tracking and OEM integration as these areas suited to specialists.

In yet another effort to organize and improve the car stereo market, Pioneer at CES announced it is inviting industry members to participate in a 12-volt summit to be held this summer with the aim of re-invigorating the car electronics market. The summit is expected to be held over a two- or three-day period at a location to be announced.