NEW YORK – CE and appliance setbacks at some of the biggest of big-box chains has allowed independent dealers to reclaim some of their lost market share.
But the buying groups they belong to are urging them to press their advantage – and boost profitability – by adjusting their assortments, stoking their digital strategies and moving into adjunct businesses.
Understanding that change isn’t easy, the buying organizations, which provide marketing and educational support as well as volume discounts on everything from merchandise and fixturing to floor planning and insurance, are focused on easing their dealers’ entry into new terrain.
Mega Group USA, for one, has long sung the praises of bedding, which provides rich margins and a showrooming-proof array of derivative models. For mattress- shy members, the 1,600-dealer furniture, CE and majaps group developed a turnkey Serta bedding program that provides a 1,200-square-foot display consisting of 16 mattress SKUs. More than half the models are Mega Group exclusives priced to retail from $299 to $999, and qualified candidates receive launch support, training, business analytics, advertising and local field support, the group said.
At the other end of the dealer spectrum, the NATM Buying Corp., whose members include some of the largest independent regional and multiregional chains, may also be joining the bedding bandwagon by creating a formal buying program for the category. NATM dealers including Nebraska Furniture Mart and RC Willey are long-time category converts, and mattresses’ 40 to 50 points of margin are particularly attractive amid the price spiral in flat panel.
NATM is also mulling large-volume TV sourcing, for use in members’ private-label programs, and for the past three years has presented its dealers with new opportunities like furniture and solar heating through its annual vendor fairs.
Nationwide Marketing Group, the $14 billion majap, CE and home-furnishings organization, is similarly broadening the horizons of its rank-and-file by exposing them to new technologies like home automation, home security and LED lighting. The group is leveraging its custom-install and system integration division, Specialty Electronics Nationwide (SEN), which recently added home-control providers Key Digital and Control4 to its vendor ranks to provide an entry point for mainstream TV and appliance dealers into home automation.
At the same time, Nationwide is supporting members’ in-store operations with a tablet program for sales associates, and has beefed up its MemberNet intranet platform from which dealers can pull customized videos for use as TV spots or digital signage. In addition, an in-house video called “The Independent Resurgence” that was used as a rallying cry at the group’s PrimeTime! meeting in March has been released to members as 30- and 60-second commercials due to popular demand.
Rival buying group BrandSource is similarly pushing its CE, majap and home furnishings dealers toward techno-parity by developing a Cloud-based point-of-sale system that’s linked to its mobile product app. The app can access thousands of SKUs and provide sales associates and shoppers with product names, images, features, pricing, rebate information and comparisons of up to three items at a time, as well as driving directions and contact information for the nearest BrandSource store.
On the product front, the group has formalized its outdoor appliance offering under a new OutdoorSource division that will proffer high-profit backyard grills and refrigeration, as well as furniture and generators, to all member dealers. Fulfillment is provided by Brand- Source’s Expert Warehouse delivery program, and the assortment is supported with digital marketing promotions and TV, print and web advertising.
Assortment is also prime with ProSource, the A/V specialty, custom-install and system integration wing of BrandSource. The 500-member division, which is comprised of the smaller-dealer Home Entertainment Source (HES) group, and the Progressive Retailers Organization (PRO Group) for larger specialty retailers, has set its merchandising sights on TV displays of 65 inches and larger and new Ultra High-Definition models, and the new generation of audio products including wireless speakers, high-end headphones and premium soundbars. At the same time, ProSource is using its combined $3.1 billion in buying power to secure exclusive opportunities in audio and custom control that can be added to its roster of core vendor programs, and is helping its members tap new opportunities in commercial installations.
Custom installation and system integration is also the bailiwick of the Home Technology Specialists of America (HTSA), which is similarly mining new marketplace opportunities. To that end, the group is exhorting members and suppliers to work together and think outside the box to develop new business models and approaches, and used its recent spring meeting as an idea incubator. Meanwhile, HTSA remains focused on basic blocking and tackling by offering classes in sales and step-up selling, and marketing conferences for middle managers, while continuing to plow resources into its print and digital marketing programs.
Also contending for custom-install and system integration share is Azione Unlimited, the relative new kid on the block which is now entering its second year in operation. The game plan for founder/president Richard Glikes is to grow its dealer ranks from 67 to 250 members over the next two years to provide the critical mass for exclusive branded products, leverage its focused vendor lineup, and execute its one- and three-year plans to develop its marketing, operations, training, purchasing and forecasting functions.
Rounding out the buying group landscape are more specialized organizations such as Independent Photo Imagers (IPI), comprised of some 700 independent print and imaging retailers across the U.S., Canada, Australia and South Africa, and home-grown organizations catering to car A/V dealers.