Independent Retailers Get No Respect
March 13, 2009
So J.D. Power and Associates issued a report the other day saying that “big box” retailers like Best Buy, hhgregg and others provide shoppers with more brand-specific recommendations for big screen TVs than mass merchants like Wal-mart, Target, etc.
The Feedback from our story seemed to indicate that this was a slight against specialty or independent retailers.
We get surveys of various types every week. In reading the details of this report I assumed that this was a straight-up survey between the so-called “big box” retailers and mass merchants.
Of course a reporter should never assume, so I called J.D. Power and Associates today and spoke with Lawrence Wu, senior director of technology practice who helped author the report. He confirmed that the study was indeed a comparison of those two retail channels.
Wu and J.D. Power are well aware of independent retailers. He said that when his company does a consumer satisfaction study on CE purchases it would show how independent retailers are perceived by the public.
The study does not imply that there are only two retail channels to buy big-screen TVs.
But the reaction to this story, inflamed by the recession no doubt, is almost more important than the story itself. It brings back the age-old lament from specialty retailers in the words of Rodney Dangerfield: “We don’t get no respect!”
Some general business analysts don’t consider the role CE specialists or independent electronics/appliance dealers. For instance BIGresearch issued a study that Best Buy and Wal-mart are taking more control of CE sales. What is implied there is that they are the big winners in the departure of Circuit City and Tweeter.
That may be true. But plenty of independents will garner more than their share of sales from the departures of those two chains.
For consumers, unless there is an aggressive local dealer in their area, independents are under the radar and that’s the independents’ fault for not promoting their products and services effectively. Plenty of surveys have shown that in the past few years. They need help in that regard, from buying groups, distributors, manufacturers, as well as CEA and CEDIA. It is in the industry’s best interest.
At TWICE we highlight the successes and challenges specialty retailers face in this industry on a regular basis. Independents, the good ones, continue to introduce and demonstrate new technology to consumers. In turn they provide consumers with better service than competing retail channels and, when successful, better margins.
CE needs and demands a wide variety of retail channels to survive and thrive. But if independent retailers are taken for granted by manufacturers and consumers, the long-term financial health of this industry will erode.
Posted by Steve Smith on March 13, 2009 |
Comments (3)
March 14, 2009
In response to:
Independent Retailers Get No RespectJohn Rice, The Komedia Group commented:
My take RE: Large CE Retailers Give More TV Brand Info Than Mass
Chains Your article reported on the study released by JD Powers
Associates and Market Force offering the analysis that consumer
electronics retailers (aka big box stores) offered customers more
brand recommendations than mass retailers (such as Wal-Mart and
Target). While I understand that the study was exclusive to these
two types of retailers, it begs the question of what role specialty
retailers and smaller, regional consumer electronics chains are
currently playing in today’s television market – and
what their role may be in the near- and long-term home
entertainment environment. By inference, if not a stated analysis,
the JD Powers/Market Force report seemed to conclude that customers
were benefited by the recommendations received at the big box
stores as opposed to the mass retailers. The report pointed to
services such as installation, financing and delivery from the box
stores, as opposed to low price and return policies from the mass
retailers. Were one to base an opinion solely on this study, it
could be easily concluded that the best place to shop is a big box
store. I fully understand that this study was exclusive to these
two categories of retailers and did not exclude the small specialty
stores and chains. But I fear that a study such as this, and
reporting on the study without any commentary dismisses the core
businesses that built the business from which the box and mass
merchants are now profiting and excelling. The landscape of home
entertainment sales has changed dramatically in the last year.
Circuit City is gone as is the regional specialty chain, Tweeter.
Others are suffering and may well be on the brink of bankruptcy or
shutting down. It is a situation created by myriad influences
including questions of management, shrinking profit margins, lower
customer overall sales and the fundamental fact that HDTVs are no
longer luxury items, but commodities. I have been a part of the
consumer electronics business for a long time – as a
customer, as a journalist and as a retail salesperson. I’ll
date myself by admitting that my first BetaMax cost me something in
the order of $1,200 in the mid-1970s. In the early ‘80s I
interviewed a consumer electronics executive who had been a leading
force in the introduction of VHS decks when he unexpectedly
announced his retirement. He essentially said he was leaving the
business because it was no longer exciting and interesting. To him,
the VCR was no longer a technological innovation. It had become a
commodity. “Like a toaster,” he said. “And I
don’t want to sell toasters.” There have been a number
of technologies that have become toasters over the years:
camcorders, CD players, digital cameras, flat screen tube TVs, DVD
players, recorders and more. It is the nature of the consumer
electronics business that new products arrive, excite the
marketplace and ultimately become toasters – or become toast.
(Somewhere in my basement is a Laser Disc player and a box of
discs, and a CED player, a VHS two-piece camcorder and a few more
dinosaurs of our technological-driven desires.) Today’s
toaster is HDTV. The fact that JD Powers and Market Force would
study HDTV sales exclusively in big box/mass market retailers
attests to that fact. And the exclusion of the retailers that paved
the road for today’s marketplace further defines HDTV as a
commodity. But what does this mean to the specialty retailer? Are
they also dinosaurs? Are they – those that remain –
destined for the fate of the Tweeters and Circuit City’s? Do
they serve a role in today’s consumer electronics market? Can
they profit? Can they survive? Is there a place in the consumer
electronics marketplace for the retailers that developed and
established it? Perhaps. The high-end retailers have traditionally
served the early adopters, and outside of a few, questionable
examples, there is no latest-greatest technology or product on the
horizon (with apologies to OLED and 3D-Stereoscopic HDTV). At the
same time, the better of these retailers have also succeeded and
excelled by adding value to their sales thru customer service, and
building a trust and relationship with customers far beyond the
Powers/Market Force categories of price matching, installation,
delivery and return policies and their like. The challenge facing
the specialty retailer is to find a way to redefine what it does,
and what it sells. The profit margins they once enjoyed are gone,
but the customers they serve are still there. If a specialty
retailer looks at Wal-Mart, Target or even Best Buy as their
competition, I believe they are destined to fail. The answer is not
in the competition. It is in each individual business model and
plan – and toss in a touch of bravado and a dash of
inspiration. Success, or even survival, will not be easy –
especially in today’s economic climate. But those who wish to
dismiss this small, but incredibly influential component of
today’s consumer electronics industry do a disservice to what
they have accomplished, and – I suspect – will redefine
this industry. If you want to sell toasters, sell toasters. There
are still enough (of us) who will still sell dreams.
March 14, 2009
In response to:
Independent Retailers Get No RespectJohn Rice, The Komedia Group commented:
My take RE: Large CE Retailers Give More TV Brand Info Than Mass
Chains Your article reported on the study released by JD Powers
Associates and Market Force offering the analysis that consumer
electronics retailers (aka big box stores) offered customers more
brand recommendations than mass retailers (such as Wal-Mart and
Target). While I understand that the study was exclusive to these
two types of retailers, it begs the question of what role specialty
retailers and smaller, regional consumer electronics chains are
currently playing in today’s television market – and
what their role may be in the near- and long-term home
entertainment environment. By inference, if not a stated analysis,
the JD Powers/Market Force report seemed to conclude that customers
were benefited by the recommendations received at the big box
stores as opposed to the mass retailers. The report pointed to
services such as installation, financing and delivery from the box
stores, as opposed to low price and return policies from the mass
retailers. Were one to base an opinion solely on this study, it
could be easily concluded that the best place to shop is a big box
store. I fully understand that this study was exclusive to these
two categories of retailers and did not exclude the small specialty
stores and chains. But I fear that a study such as this, and
reporting on the study without any commentary dismisses the core
businesses that built the business from which the box and mass
merchants are now profiting and excelling. The landscape of home
entertainment sales has changed dramatically in the last year.
Circuit City is gone as is the regional specialty chain, Tweeter.
Others are suffering and may well be on the brink of bankruptcy or
shutting down. It is a situation created by myriad influences
including questions of management, shrinking profit margins, lower
customer overall sales and the fundamental fact that HDTVs are no
longer luxury items, but commodities. I have been a part of the
consumer electronics business for a long time – as a
customer, as a journalist and as a retail salesperson. I’ll
date myself by admitting that my first BetaMax cost me something in
the order of $1,200 in the mid-1970s. In the early ‘80s I
interviewed a consumer electronics executive who had been a leading
force in the introduction of VHS decks when he unexpectedly
announced his retirement. He essentially said he was leaving the
business because it was no longer exciting and interesting. To him,
the VCR was no longer a technological innovation. It had become a
commodity. “Like a toaster,” he said. “And I
don’t want to sell toasters.” There have been a number
of technologies that have become toasters over the years:
camcorders, CD players, digital cameras, flat screen tube TVs, DVD
players, recorders and more. It is the nature of the consumer
electronics business that new products arrive, excite the
marketplace and ultimately become toasters – or become toast.
(Somewhere in my basement is a Laser Disc player and a box of
discs, and a CED player, a VHS two-piece camcorder and a few more
dinosaurs of our technological-driven desires.) Today’s
toaster is HDTV. The fact that JD Powers and Market Force would
study HDTV sales exclusively in big box/mass market retailers
attests to that fact. And the exclusion of the retailers that paved
the road for today’s marketplace further defines HDTV as a
commodity. But what does this mean to the specialty retailer? Are
they also dinosaurs? Are they – those that remain –
destined for the fate of the Tweeters and Circuit City’s? Do
they serve a role in today’s consumer electronics market? Can
they profit? Can they survive? Is there a place in the consumer
electronics marketplace for the retailers that developed and
established it? Perhaps. The high-end retailers have traditionally
served the early adopters, and outside of a few, questionable
examples, there is no latest-greatest technology or product on the
horizon (with apologies to OLED and 3D-Stereoscopic HDTV). At the
same time, the better of these retailers have also succeeded and
excelled by adding value to their sales thru customer service, and
building a trust and relationship with customers far beyond the
Powers/Market Force categories of price matching, installation,
delivery and return policies and their like. The challenge facing
the specialty retailer is to find a way to redefine what it does,
and what it sells. The profit margins they once enjoyed are gone,
but the customers they serve are still there. If a specialty
retailer looks at Wal-Mart, Target or even Best Buy as their
competition, I believe they are destined to fail. The answer is not
in the competition. It is in each individual business model and
plan – and toss in a touch of bravado and a dash of
inspiration. Success, or even survival, will not be easy –
especially in today’s economic climate. But those who wish to
dismiss this small, but incredibly influential component of
today’s consumer electronics industry do a disservice to what
they have accomplished, and – I suspect – will redefine
this industry. If you want to sell toasters, sell toasters. There
are still enough (of us) who will still sell dreams.
March 14, 2009
In response to:
Independent Retailers Get No RespectJohn Rice, The Komedia Group commented:
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