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Nationwide Claims Competitive “Edge”

8/15/2005 08:21:00 AM Eastern

Dallas — A perfect storm of home remodeling, new housing starts, the analog cutoff and enhanced group services have created a tidal wave of opportunity for the independent dealer members of the Nationwide Marketing Group.

That was the message from the $9 billion buying group’s management team, which presided over Nationwide’s bi-annual PrimeTime! meeting and convention here last week at the Wyndham Anatole hotel.

Reflecting the upbeat business climate, and serving as a backdrop to the show, was news of Consumer Reports’ 6,000-reader survey that favored independent dealers over national chains for service, selection and competitive prices.

Nationwide also touted internally-generated market share data indicating that independents are actually gaining share for the first time in 25 years, as Sears retreats and Lowe’s plateaus.

“Business is good,” president Ed Kelly told TWICE on the floor of the Anatole’s convention center, where 150 vendors filled 126,000 square feet of exhibit space. “I’ve never seen anything like it. The white goods business in particular is just staggering.”

Key appliance drivers, he said, are a hot, baby boomer-fueled replacement business and a strong housing market. As Robert Weisner, executive VP and director of the group explained, “You can remodel your kitchen and double your investment” in the current resale environment while reaping tax benefits from the home improvements. He added that the Energy Bill, which President Bush just signed into law, will further goose majap demand by offering consumers rich rebates on energy efficient appliances.

On the CE side, Weisner projected that 10 million flat panel TVs, all over $1,000, would be sold within the next three years, and that some 25 million TVs in total will turn over by 2010. “That’s going to make some of our dealers a lot of money, and has inspired others to get back in the TV business,” he said.

Indeed, the ratio of white goods to brown goods for Nationwide’s 2,500 members has shifted from 80/20 two years ago to 75/25 today, as dealers change their selling floors to accommodate flat panel displays.

“It’s just a healthy time,” said Kelly, “and the next 48 months will be just wonderful. The dealers are smiling and everyone’s here to buy. There’s business to be had out there.”

Also aiding business is a surfeit of group services designed to give dealers a competitive edge in the marketplace, a factor that was underscored by the show’s theme of “The Nationwide Edge.”

Programs include a new Warehouse Direct Nationwide initiative (WND), which allows dealers to place smaller mixed orders on a single truck to receive prepaid freight and qualify for the best pricing levels. Built around a state-of-the-art intranet Order Management System (OMS), with logistical support from distributor DSI, the program pulls product from 37 warehouses around the country for delivery to 95 percent of all members within 48 hours.

In addition to warranty and consumer financing programs, Nationwide also offers a Certified Advisor Program that provides product training sessions online and via DVD, and a Nationwide Commercial Factory that produces professional print, radio, direct mail and even HDTV ads (currently in test phase) for use by member dealers at no cost.

Both programs are produced in Nationwide’s high-tech production facility in Atlanta under the auspices of marketing honcho Steve Bryant.

Nationwide has also worked with vendors to develop a consumer rebate program that allows dealers to respond immediately to price breaks and promotions by national chains within their trading area.

At the show, dealers placing truckload orders also received on-site vendor rebates through Nationwide’s popular Cash Back Now program, which dispensed some $12 million during the previous two shows.

“We’re investing in our dealers’ future by spending millions on infrastructure to support these programs,” Kelly said.

In other Nationwide news, the group named James MacAlpine to head its newly formalized Rent-To-Own division, now 300 companies strong. The category represents “a great new segment,” said Kelly, which generates $1 billion in business.

Nationwide also welcomed new exhibitor Miele, which joins core premium vendor Fisher & Paykel as the group endeavors to build its roster of luxury majap lines.

Other convention highlights included a keynote address by former Continental Airlines chairman and CEO Gordon Bethune, who compared his company to independent dealers. “The big guys look at market share,” he said, “but you can gain the edge by asking ‘What does the customer want?’ and ‘How much is he willing to pay for it?’”

“Continental wasn’t the biggest,” he continued, “but we offered dependability and reliability of service. As they say in the NFL, ‘One less turnover per game puts you in the playoffs.’”

Nationwide’s next convention will be held Feb. 15-18, 2006, when PrimeTime! returns to the Superdome in New Orleans. Kelly anticipates an expanded show floor with upwards of 200,000 square feet of exhibitor space, and hopes to up member attendance 40 percent above the 1,000 dealers on hand in Dallas in order “to create a vendor frenzy.”

PrimeTime! will move to the Venetian hotel in Las Vegas next August, followed by a February 2007 show in Orlando and a return date in Las Vegas the following August.

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