twice connect
careers

Buying Groups Take To Road In August Flurry

No less than five retail buying groups held their annual member meetings within a one-week period late last month, keeping hotels bustling and vendors scrambling.

Thanks to the intangibles of hotel availability, Associated Volume Buyers, Key Southwest, MARTA and Nationwide TV & Appliance all held overlapping conventions between August 20 and 30 in Dallas, Las Vegas and Phoenix.

The meetings for Nationwide and Key Southwest, the Southwest chapter of Key America, were held back to back at the same venue, the Intercontinental hotel in Dallas.

Only one buying group, Best Brands Plus (BBP), broke the Southwestern mold by holding its August 27-30 summer show in its headquarters town of Memphis, Tenn.

Aside from the timing of the confabs, their similarities extended to record turnouts of dealers and vendors. They also shared high spirits as a result of solid sales born of a strong economy and a wealth of exciting new high-margin products.

"We were very pleased with the overall turnout," reported Rick Bellows, BBP's merchandise manager for appliances and electronics. "Members had the best attitude we've seen in years. Everyone was upbeat, and everyone seemed to be making money."

Also adding to the good cheer at the BBP event, which was held at Memphis's Peabody Hotel, was the announcement that Best Brands had entered the e-commerce race with the launch of a consumer selling site, www.bestbrandsplus.com.

The online store sells Amana, Frigi-daire, GE and Whirlpool white goods through its network of 350 members, making BBP the third buying group to offer its wares over the web following AVB and, more recently, Key America.

The mood was also ebullient in Dallas, where 550 dealers and 240 supplier representatives broke attendance records at the Key event.

Dealers -- including nine new members -- were "happy and doing very well overall," reported chapter president Deryl Sewell. "They're turning goods and making money, so the dealer structure was in a great frame of mind."

Contributing to the rosy picture, said Sewell, is a good economy, increased building starts and the fact that "our dealers have become better business people in the last 18 months."

The result: higher-than-average ticket items finding favor with consumers, including such majap hits as halogen ovens, the Triton dishwasher, Maytag's Atlantis line and Gemini range, GE's built-in models, and Whirlpool's high-end Kitchen-Aide line, he reported.

Although white goods make up 69% of Key Southwest's total volume, the group is also enjoying robust business in CE. Top categories include VCRs ("Volume is skyrocketing," Sewell said); camcorders ("We're getting back into that category..."); and on the other side of the margin spectrum, home theater. "We're becoming very active in electronics," observed Sewell. "There's been a resurgence for us."

All told, Key Southwest's majaps volume was up nearly 5% year to date, while its CE sales were ahead more than 3% -- a strong electronics showing compared to other appliance-driven groups, most of which were flat for that sector.

CE is also making a comeback at Nationwide. According to director Robert Weisner, the group's sales volume had once been evenly split between white and brown goods but now skews more heavily toward majaps, at 65% of sales, following the loss of its electronics commodity business to the mass merchants. But thanks to the digital revolution, he suggested, the mix may change again.

"HDTV is bringing our dealers back into consumer electronics," Weisner said. "Just within the last 90 days we're seeing dealers have a lot of success with the category. Those who stick with it will see a windfall."

While Weisner won't predict whether HDTV will be as big as color TV was in the 1960s, he argued that "if pricing comes down and programming is available, it will be very popular and will need specialists to sell it. Those dealers who do custom installs will be the winners."

To that end, Nationwide is encouraging its members to promote HDTV this fall. "If a guy comes in for just a DVD unit, he'll need lots of other products to get the full enjoyment of the player," Weisner explained.

While Nationwide wouldn't reveal its sales figures, the group as a whole is at or ahead of last year's 10% across-the-board volume hikes, Weisner said. "The majority of our dealers are ahead, some in double digits."

Helping to goose the numbers is the addition of furniture to the mix, a category that has some 50 full-line adherents among Nationwide's ranks, and which is carried in one form or another by at least half the dealers.

Weisner added that members would have another window of selling opportunity when the group launches an e-commerce web site within 60 to 90 days.

Meanwhile, bedding continues to be a big business for Best Brands, which unveiled its turnkey Best Brands Mattress Direct store at its summer show. Nonetheless, appliances turned in a particularly powerful performance this year, with category sales up 11%, led by stainless steel and other step-up products, Bellows said.

Although CE is running flat for BBP members, that category is also trending toward higher-margin gear. "With digital, the curve is going back up in electronics," Bellows said. "We'd been on the downward slope in CE, but it is picking up momentum, prices appear pretty stable, and we're making up for earlier losses."

The DSS business is leading the pace for BBP dealer, he said. "There's a renewed enthusiasm for it, and we're seeing it come back."

Bellows predicted continued dealer prosperity based on a "hot economy and good products." But echoing other group executives, he said that a little added insurance couldn't hurt. "The dealers who continue to promote, properly merchandise and bring in new products will be successful in the next century. Those who continue to do things the old way won't."

Best Brands' next member meeting will be held February 11-14, 2000, at the Orlando Hyatt in Orlando, Fla. Key Southwest members will next convene February 14-16 at the Sheraton Astro-dome in Houston, while Nationwide's next convention is February 11-16 at the Mandalay Bay resort in Las Vegas.

Want to read more stories like this?
Get our Free Newsletter Here!