Steve Smith On May 6 2013 - 12:00am

Never Underestimate Independent Retailers

 

I read a blog online the other day about Best Buy’s turnaround in recent months, but halfway through, its author began to go down the road of gloom and doom.

I didn’t keep the link so pardon me if I don’t give the proper credit (or blame) to the author, but one line in the piece went something like this: “If Best Buy’s revival doesn’t succeed, consumer electronics will no longer have a national retail presence.”

I also recently heard this old line: “There are only three or four retailers suppliers really care about.”

My answer to both premises is this: Never underestimate independent retailers and the organizations that support them — buying groups.

Concerning Best Buy, it is true that under a worst case scenario its demise would hurt the industry. Even independents admit that. Still, the rollout of its Samsung Experience departments and other efforts by CEO Hubert Joly and his team are steps in the right direction.

But even if you take the somewhat unlikely position that the pessimists turn out to be correct, the industry will still have independents, along with national retailers, to pick up the slack.

As for the old line about suppliers only caring about “three or four retailers,” recent history is rife with manufacturers — both large and small — that went out of business by just relying on national chains to drive sales.

Manufacturers that thought they could just sell exclusively to the largest chains in the market and gain volume found out profits began to disappear. At the end, they no longer controlled their brands and some saw their companies exit the marketplace, or worse.

Now don’t get me wrong: Top-tier and secondtier manufacturers in this business need to sell national chains — for volume and exposure.

I also agree that there are fewer independent retailers in this business than a generation or two ago. But today’s independents of all stripes — electronic specialty stores, electronic/appliance dealers, custom installers — are, as a group, better financed and better prepared to explain and sell new technologies, and upscale brands, profitably.

The words “innovation” and “entrepreneurship” have been mentioned a lot around the electronics and major appliance business in the past few years. What is usually forgotten, probably because they are local businesses and are not publicly held companies, is that the best independent CE or electronics/appliance retailers are by definition entrepreneurs and have to be innovative every day.

That is reflected in the buying group organizations the overwhelming majority of these retailers and installers belong to, as you can see in our Special Report on buying groups, which begins on p. 16.

To underestimate independents of all stripes, and their buying groups, is to ignore one of the best resources manufacturers have in establishing their brands and products in the marketplace.

Alert to All Users of the Disqus commenting system:

Because of a recent global security issue, the Disqus website recommends that all users change their Disqus passwords. Heres a URL about the issue:

http://engineering.disqus.com/2014/04/10/heartbleed.html

 

 

 

 

Connect

 

PHOTOS

Enjoy the greatest pictures taken from famous shows and events this year.

Current Issue

Webcast

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.