BrandSource Growing, But Must Embrace ChangeOrlando, Fla. — BrandSource’s CEO Bob Lawrence greeted Summit & Expo convention attendees here Tuesday morning, saying that the group is outperforming the industry in key categories, and to keep that going, members must embrace new ways of attracting consumers. 3/19/2014 06:40:00 AM Eastern
Orlando, Fla. — BrandSource’s CEO Bob Lawrence greeted Summit & Expo convention attendees here Tuesday morning, saying that the group is outperforming the industry in key categories, and to keep that going, members must embrace new ways of attracting consumers.
The BrandSource CEO looked back at 2013 and said it was “too confusing” to measure how well the group did vs. the industry due to TV’s mix of high-end and low-end large-screen TVs, but he did have some good news for members:
*Audio was up 7 percent for BrandSource, while the industry was down 7 percent.
*Integration sales were up 31 percent for the group, while the industry was up 7 percent.
*Major appliance sales for BrandSource were up 7.2 percent (excluding builder sales), while the industry rose 4.5 percent.
*Furniture sales for BrandSource rose 4.1 percent, with the industry up 0.7 percent, and group sales were up 5 percent in bedding vs. the industry’s 2.1 percent rise.
Lawrence told TWICE total BrandSource sales are still at the $14 billion level, with CE the largest category now at 45 percent, due to ProSource; 35 percent for major appliances; 25 for furniture; and 5 percent for “other” categories such as outdoor products. Back in 2012, major appliances, which is still a big part of the group’s sales, was No. 1.
Lawrence advised members to check out four basic categories at this week’s Expo: Outdoor Source (the group’s outdoor products effort); mattresses and furniture; 4K TV, which he described as “a huge opportunity,” and “The Connected Home.”
The theme of Lawrence’s keynote speech was “Where have we been? Where do we need to go?” He looked back a decade ago and mentioned “a collection of things that have disappeared” such as VCRs, fax machines, dial-up Internet, CDs and the like.
His point in his nostalgic review was that “lots of tools we have used … have gone away. We have embraced technology to increase footprints in [our] stores.”
For instance, “In a connected world people still want in-store shopping. But surveys show 40 percent of consumers said retailers must increase the in-store experience,” he noted.
He suggested that when members go back to their stores later this week, “go to the front door of your store, close your eyes and open the door. Does it have an updated look?”
Just as important, in an era when more consumers go to retailers’ websites before they ever visit a store, “Make sure the website is what you want it to be. Not that you have to spend a lot of money, but a cheap-looking website tells consumers you have a cheap store. Make sure it is a site that you want to visit. Social media, we can help you with that. The BrandSource app [which he said is the No. 1 appliance app on the iTunes store] can help [and] I hope you all have it.”
He added, “With the BrandSource app at your fingertips with a tablet it becomes a problem solver … to answer [consumer] questions.”
Lawrence said as part of the web and social-media experience, store reviews are now vital, and he pushed his members to sign up for the Expert Reviews program.
“Based on surveys, 86 percent of consumers call reviews critical” in deciding to go to a store, “with 72 percent trusting them as much as a person.”
Lawrence added, “Eight-four percent of customers will initiate business with a seller which has a five-star rating,” with only 3 percent of new customers likely to try a store with zero-, one- or two-star ratings.
BrandSource will be offering iBeacons to its members later this year, which are placed in specific areas of stores and can broadcast specific messages from vendors about pricing, promotions, and features of products within a 6- to 50-foot area to Android and Apple iOS7 smartphones. All iBeacons will be preloaded by BrandSource with content provided by suppliers.
Six devices can be sent to retailers per month, four on products and two “generic” iBeacons about the store, financing options and other services, Lawrence said. Both Electrolux and Serta were demonstrating iBeacons on the BrandSource Expo floor during the show.
“These iBeacons use Bluetooth technology and are broadcast to smartphones where they can automatically pick up the signal,” Lawrence said. “They enhance the in-store shopping experience … and can track customer reactions.”
As part of an education program, BrandSource will make available online or via DVD topics such as accounting, sales, delivery and service. Eventually there will be about 100 of these 10- or 15-minute videos available to members.
Lawrence quoted a Consumer Electronics Association (CEA) study saying that ascending retail channels on “the sunrise” part of their development are store within a store, brand stores, specialty stores and pop-up stores, and he placed BrandSource within the “brand” and “specialty stores” categories in the survey vs. those channels that are at “the sunset” such as “big-box stores … and those that just compete on price. CEA is correct. We have a tremendous opportunity in the next few years.”
Lawrence added, “All of these trends show it has never been a better time to be an independent. We have the tools, [and] can provide the in-store experience to succeed.”