Dallas — Brand Source, the $5 billion white- and brown goods buying group, is looking to harness the scope and expertise of its multiple specialty divisions under a new over-arching merchandising concept designed to keep consumers’ home-related purchases within the Brand Source family.
The concept program, Whole Home Source, was floated before the Brand Source rank and file during the group’s bi-annual meeting and buy fair, held last month at the Hilton Anatole, here.
“What if we could be the No. 1 destination for any home furnishings a consumer needed, whether it is appliances, electronics, furniture, floor covering, rent-to-own or anything for the home?” asked Bob Lawrence, Brand Source’s executive director. “Customers would no longer need to go to Home Depot, Lowe’s, Best Buy, Costco, Sears,
hhgregg, Menards, P.C. Richard or anywhere else. We could lock that customer in so that if they were redoing a kitchen, a home theater room, a den or a bathroom, we could fulfill all of their needs.”
Under the plan, dealers would have access to all of the products carried by fellow members within the group’s Home Entertainment Source (specialty A/V), Mobile Entertainment Source (12- and 24-volt), Sleep Source (mattresses), Gourmet Source (premium majaps), Outdoor Source (patio furniture and grills) and Home Rental Source (rent-to-own) divisions. Dealers could also tap into the floor covering wares of Flooring Plus, the 314-member buying group that formed a partnership with Brand Source in January.
Only kitchen cabinetry and counters are missing from the Whole Home offering, Lawrence said. Once that category is addressed, “No other entity out there with the exception of Sears [could] provide a whole-home solution for the customer,” he noted. Plans call for the creation of an umbrella Web site, www.wholehomesource.com, and the entire program could be up and running within five years.
The group demonstrated the possibilities of Whole Home Source with an interactive demo house, situated on the show floor, which showed all of Brand Source’s products under one “roof.”
Supporting the notion of an umbrella banner is a new Brand Source case study that “proves beyond a shadow of a doubt that branding works,” Lawrence said. The study shows that consumers have a 22 percent unaided awareness of Brand Source — exceeding Home Depot in appliances — and that dealers who incorporate the Brand Source name into their signage, advertising, trucks, business cards, phone messages and other collateral enjoy an 11 percent delta in sales over non-branded members. Lawrence also credited the program for Brand Source’s 12 percent increase in majap sales and 27 percent gain in CE volume last year, which handily outpaced the industry as whole.
What’s more, some 9 percent of Brand Source credit cards are used beyond the issuing location, and AOL, thanks to its awareness of Brand Source through a TV spot, has offered the group an exclusive program that pays dealers a commission for every customer that signs up for its service from a Brand Source-distributed CD-ROM.
To close the top-of-mind awareness gap between Brand Source and Lowe’s, Best Buy and Sears, the group will continue to run advertising spots on such syndicated TVs shows as “Oprah,” “Dr. Phil,” “Jeopardy” and “Wheel of Fortune;” will increases its cable TV presence on the HGTV, Fine Living, Food Network and DIY networks; and has expanded its sponsorship of the John Force racing team, which will be the subject of a new A&E Network reality show beginning this summer called “Driving Force.”
Elsewhere, Lawrence announced the introduction of a Brand Source gift card program and the launch of Expert HR, a new group resource that can provide human resources tools, regulatory analyses, forms, training, compensation models and expert assistance around the clock.
Also at the show, dealers got their first look at the group’s new private label luxury appliance line, which includes refrigeration, indoor-outdoor cooking and dishwashers. The program, which begins preliminary shipping this quarter with a full-out launch to follow in the third quarter, can compete with Viking, Sub-Zero and Thermador while allowing members to make “significantly more margin,” Lawrence said.
On the sales front, the group gained 1.2 percent in major appliance market share last year, and had larger increases with every manufacturer than any other group, Lawrence said. The momentum continued into the new year, with January and February proving to be “very good. We continue to lead our competition with the biggest increases and continue to gain share.”
Lawrence also reported that the group’s new alliance with the MARTA Cooperative of America is proceeding well, as the co-op plugs into core Brand Source programs. “This consolidation of volume brings us an additional $1 billion of appliance, electronics and furniture business,” he said. “It increases our volume, making us more important to manufacturers, which translates into more supplier support and better programs.”
Lawrence also predicted that consolidation among the buying groups will continue, so that ultimately there will only be two major organizations for independent dealers in the white goods, CE and furniture arenas.
Brand Source will reconvene this Aug. 27-31 for its National Convention at the Paris Hotel in Las Vegas. The group will return to the Anatole in Dallas next March, although management is considering holding separate shows for each of its divisions due to Brand Source’s growing ranks.