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Nationwide Upbeat On Its CE Opportunities

8/20/2009 02:39:26 PM Eastern

Lake Buena Vista, Fla. - Nationwide
Marketing Group said it is well positioned in consumer electronics to take
advantage of ongoing supplier relationships and strategies for the fall.

Nationwide estimates its CE sales at
$2 billion "and growing," said Robert Weisner, executive director of members
services, at the group's PrimeTime meeting, here, earlier this week.

Jeannette Howe
 Jeannette Howe

The group's CE sales are from traditional
electronics/appliance retailers, around 1,250 of the group's 3,000 total
members, and that number is growing, according to Mike Decker, electronics
marketing senior VP.

About 455 of the 1,250 members are
part of the Specialty Electronics Nationwide (SEN) division, which sell more
custom and hi-fi products and is headed by executive director Jeanette Howe.

In separate interviews with TWICE during
Nationwide's PrimeTime meeting, Decker and Howe illustrated the differences
between the traditional electronics/appliance market, the custom business and
how Nationwide has advantages in both.

Decker said more Nationwide members
are moving over to CE "due to the challenging appliance market. They see
opportunities in electronics."

He volunteered that last year's
holiday season was "very tough" but that Nationwide can "certainly see
double-digit growth [in CE]. We are looking forward to the fourth quarter due
to the deals that we have in place."

Decker said Nationwide is ready for
a promotional fourth quarter, calling it "an aggressive challenge ... but we
have been working with LG, Samsung, Toshiba and have had discussions with Sharp
on this. We will be in thick of things."

Decker said that for Black Friday, "Members
will limit [certain promotions] to two-hour and four-hour events. We are quite confident
our members will hang in there."

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When asked about where Nationwide's
CE growth is coming from, Decker said, "The clear winner is LED," and said that
Samsung's lineup in that format has a strong share of that mix along with some
strong SKUs from Sharp.

In other CE categories, Decker said that LG and Samsung have
been "highly supportive" in providing Blu-ray and have planned promotions
waiting to go. But he is "extremely concerned" about Blu-ray profitability
because "the industry again is ... pushing a category that had acceptable
profit opportunities" to get market share.

When asked about Toshiba's announced Blu-ray entry, both
Decker and Howe were very supportive. Decker said, "Toshiba is a trusted,
respected partnership brand for our members. To bring Blu ray [into its line] opens
the door to hundreds of our members makes a lot of sense because it is often tied
to purchase of a TV."

Nationwide is looking at some non-traditional categories for
its members - gaming vignettes, digital cameras and others "to get consumers to
come back more often to our members' stores."

And Decker said by next spring Nationwide will introduce its
own high-end cable line, called Solutions for High Definition, which will
consist of HDMI cables, high-end component cable, S-Video, digital optical
cable and the like.

On the custom side, Howe said that SEN has seen growth from traditional
custom installers but that the market is "still challenged."

Howe said SEN brought in Russound as a supplier recently
because "they have great retrofit technology. We can't rely on home builders anymore.
Retrofits are where growth is coming from."

The recession has made custom retailers "get back to selling
the ‘Wow' of what we do, delivering a spine-tingling demo. I believe that going
back to basics of big screen demos, showing 3-D technology. Between gamers and
movies, 3-D brings the next level of excitement to wow people."

When asked about who will replace Pioneer plasma TVs in the
custom market, Howe said SEN's biggest growth has been "with LG and Samsung,
but I don't know if there will be a natural succession." And she noted that
Mitsubishi's laser and 3-D technologies are "things we can demonstrate and talk
about vs. saying, ‘This display has a fourth HDMI output.' We have to tell
stories."

Howe also mentioned that SEN members should add gaming
vignettes to their mix, as well as home automation. "Right now, while the
economy comes back, our members need to learn these technologies."

And Howe is upbeat about the fourth quarter and beyond. "Our
future is healthy, if we can get through the next six months. I think as an
industry will recover more quickly than others since it is inside the house and
interior of your home. People are enjoying the home more, and that is good for the
hi-fi and home-theater world."

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