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Nationwide Sees Majap Opportunities

3/05/2012 02:04:27 PM Eastern

Orlando, Fla. - While the major appliance market is still
challenged, Nationwide Marketing Group executives said that trends and efforts
by the group are providing its members with an edge.

Nationwide’s Jeff Knock and Rick Weinberg

TWICE interviewed both Jeff Knock, appliance marketing
senior VP, and Rick Weinberg, appliance merchandising senior VP, during last
week's PrimeTime! convention, here.

While Weinberg said majap "margin levels in the past year have
not led to a healthy environment for our members [in appliances]," Knock commented,
"We are pleased with some of the price increases we are seeing and ... encouraged
that [the market] will allow them to happen."

Weinberg noted that Nationwide "absolutely understand and
agrees with the vendor community to need to increase their pricing. We applaud
them, if they do it across the board and fairly."

When asked if suppliers are offering more derivative lines,
Knock said, "We have quite a few ... exclusive models that are not only good to
‘escape to' [for profit]. They have good money on them and we applaud our
vendors for it."

Nationwide also has instituted programs to sell more exclusive,
profit-oriented products, called, "Draw, Escape, Sell," according to Knock.

"We wanted to make this as simple as possible for our
members to sell major appliances," Knock said, and noted that the program
includes full-line vendors and three SKUs per category per brand, which "brings
simplification to merchandising and assortment. Members can offer dozens of
products compared to thousands of SKUs, and the products are profitable. There
are a high level of Nationwide exclusives" in the program and dealers are
focused on fewer SKUs.

Knock said that the program can be a "huge win" since it is
focused on "well-embraced models. The big picture is that 20 percent of the
SKUs will do 80 percent of the business. This is a collaborative effort between
[Nationwide dealers] and our vendor partners."

Knock noted that Nationwide is a "marketing group first and
foremost" and that "our game is to sell our goods through." He acknowledged
that "70 percent [of majaps] is a replacement business where the consumer is
under duress. Thirty percent is done around the holidays, so it keeps us busy
in the promotional game."

Weinberg noted that Nationwide is "very collaborative with
dealers, our vendors ... and we watch the seasons of the calendar, look for
innovative products, new vendor launches" and being sensitive to local markets.

Weinberg said Nationwide provides the widest number of
"consumer rebates, special suites of products, in-store signage ... all tools for
in-store point of purchase."

And as for new media, Weinberg noted, "While many members
are in the early stages of social media, many more are very sophisticated in
social-media marketing, between Facebook, Twitter and email marketing," which
is part of many Nationwide members' majap sales and marketing plans.

Online sales by vendors direct to consumers was "one of the
biggest topics at the show" on the part of members, but Weinberg said that
Nationwide's full-line suppliers MAP policies could include their own websites
since they realize "the value of the product at retail has a lot of brand
equity and like retailers they need to increase profits.

And as for Sears, traditionally the No. 1 major appliance
retailer in the U.S., and its recent store closings, Knock said, "Sears'
consumer base is used to being served ... like our members serve our customers.
That is really great news for members and our vendors. Members can serve their
consumers and provide the right mix of products and service. We don't enjoy the
demise of anyone, but [Nationwide] can provide good options for vendors and our
members."

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