By Lisa Johnston
New products on display at the American International Toy Fair, held in N
DALLAS – CE sales for the Nationwide Marketing Group have been “robust” as executive VP Dave Bilas put it, with new display technologies and add-on sales leading the way.
At the group’s PrimeTime! convention earlier this month, Bilas and Nationwide’s sales and merchandising execs noted that CE sales have begun to rebound.
Robert Weisner, CEO of Nationwide, said that CE sales, which are around 20 percent of the group’s annual sales of around $14 billion or so, “stopped in 2007 and 2008” due to the Great Recession, but now consumers are “coming back to the marketplace.”
And they are returning due to big-screen deals, which include new Ultra High-Definition and OLED TVs, according to Tom Hickman, electronics senior VP.
Nationwide sees opportunity with these two technologies this fall. “We encourage our members to be first [with these technologies] and be a leader. UPP is helping stabilize profits for our guys and they are embracing it. “
Hickman said Nationwide members have been able to sell “soundbars and components with TVs,” with the latter in a “revival” providing “customers with the best experience.”
He thinks that the industry should sell more than Consumer Electronics Association unit sales estimates this year in Ultra HD TV. “We think demonstrably better pictures will result in incremental increases in sales and profits.”
Hickman said Nationwide members have to “pound the technology [message] and communicate that we are the first to bring more new technology to the market. Our goal is not only to close but to get younger and more affluent customers in your stores.”
He added that Ultra HD and OLED TVs provide a “demonstrable picture improvement … a monster step forward … that will see instrumental sales and profits.”
Doug Schatz, electronics merchandising VP, said that with upscale displays arriving in the marketplace many consumers “demand an [upscale] audio solution … and our members can take them to the next level with soundbar solutions and one button solutions.”
Schatz suggested Wi-Fi and Bluetooth audio systems for some portable devices which can provide single-room and multi-room solutions.
He expects Nationwide’s Info-Pad program, as it rolls out to members who sell CE to be a success as a sales aid and to convince more independents to sell tablets in their stores.
“We see [tablets] as attracting a younger demographic and creating more [consumer] engagement on our sales floors,” Schatz said.
As for smartphones, Schatz said that it is “on our radar” and that Nationwide has “a high standard to launch a turnkey, multi-carrier” program for its members but “it is not quite ready yet.”
He did say that Nationwide is launching a new custom installation program for retailers who are not in that business with “installation rebates” compared with product rebates so members can “go to the customer’s home, open the boxes, install systems with the Internet, Facebook, 3D, etc. and provide customer satisfaction.”
For these types of Nationwide retailers that have little custom installation experience, this market is vital for growth and profitability, said Bilas.
“You just can’t sell flat panels. You have to sell add-ons – speakers and accessories. It is challenging [for some members] but it is working,” he noted.
Custom install is the bread and butter of the group’s Specialty Electronics Nationwide (SEN) division, led by Jeannette Howe, its executive director.
2013 has been “a pretty promising year” for SEN. “Those dealers who can get [Ultra HD] can sell it,” Howe said. “These sets are designed to the higher end, so [SEN members] can sell speakers and systems.”
Howe said the confusion of the new display technologies and the housing turnaround has helped the custom installation business.
“Some consumers are perplexed with new technology and they are going with better dealers,” she noted. “And the housing turnaround is making a difference. People are selling their homes for a profit and buying new ones. That helps us increase sales.”
New key vendors in CE for Nationwide this year include Onkyo, Polk, Voco, Screen Innovations, Munitio and AudioSource, which have all helped increase sales and profitability, Howe said.
She suggested that when it comes to all types of new technology, “early adopters are always early adopting. As 4K content is developed it will be provided on Blu-ray, and that will help [add on] sales.”
“Retailers and installers should go after those customers who originally bought the first plasmas when HDTV came around,” she suggested. “Those sets are ready to be replaced. The people who bought 50-inch plasmas several years ago are prime candidates” for Ultra HD or OLED TVs.
About the latter, Howe thinks “there won’t be enough OLED TVs, there will be supply problems.” But while the sets are “expensive … it will be a compelling technology” like Ultra HD.
She is confident “these displays will sell because bigger sets with demonstrably better pictures usually sell. You have to win the demo, and our guys are winning the demos.”
Regarding profitability, Howe said that unilateral pricing policies “are turning out great,” but, as always, “we can always use more margin.”
Howe also reported that the previously announced Energy Smart by Nationwide program for CE has become a winner with SEN members and Nationwide’s appliance retailers.
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.