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May: Training, Demos Answer Price Competition

3/12/2012 12:01:00 AM Eastern

SAN DIEGO – Dennis May, hhgregg CEO, told a DisplaySearch
Flat Panel Display Conference audience
that he thinks OLED display technology slated for market
later this year will be evolutionary rather than revolutionary
in its impact on the overall CE business, and that
his chain will continue to rely on educating consumers
to fuel future growth.

“OLED will move us into an environment where the
customer wants to upgrade,” May said. “It will take
some time. It is a more evolutionary nature, but it is a
product well done.”

LG Electronics and Samsung showed at International
CES 55-inch OLED TVs slated to ship to market late this
year or in early 2012. The highly touted “breakthrough”
technology offers ultra-thin panel depths, strong contrast
and black levels, low power consumption and high
anticipated price tags.

May indicated that, while not a revolutionary technology
that will generate wide-scale TV replacement, OLED
will help drive some TV sales as consumers begin to
replace old and worn out flat-panel TVs with the latest
and greatest technology.

May said vendors are doing a good job of delivering
innovation, but indicated that they need to listen better
to consumers’ needs rather than pushing innovations
created without end-user input.

“The biggest change to make is to better understand
what the consumer wants, to become more consumer
centric,” May said in response to a question from interviewer
Steve Baker, industry analysis VP at The NPD
Group.

Rather than depending on a new revolutionary product
to boost growth, May said hhgregg will continue to
drive sales by educating consumers on the wide volume
of products coming through the pipeline, both in stores
and online.

“Our goal is to take specs and translate them into features
and benefits for the customer,” he said.

“The devices coming to consumers in the near future
are very exciting,” May continued, indicating that smart
and connected products are bringing a new world of
use options to end users.

“OLED, 4K, 8K … there are so many choices for
consumers,” May said. “TV continues to evolve. Large
screen is going to be a game changer. Different screens
will be going into consumers’ homes. We expect dynamic
growth out of 55-inch and larger sets.”

“This used to be a very narrow industry,” May said.
“Today, the industry has totally changed” and is bringing
a broad base of consumers with “an insatiable appetite
for technology.”

May said consumers today demand access to content
“whenever and wherever they want it.”

The challenge for hhgregg will be to figure out “how do
we position ourselves to educate the consumer,” to the
technologies to empower that, he said, adding that his
chain spends heavily every year on training its retail staff.

Asked what he expects from a potential Apple TV
product, as widely rumored to be on the way according
to media reports, May withheld judgment.

“Apple is very good at stirring rumors and keeping secrets,”
he said. “None of us really knows what that product
could potentially look like. New products are either
evolutionary or revolutionary. If it’s revolutionary, that’s
what the doctor ordered. I don’t view it as a bad thing.”

In addition to sales training, hhgregg is investing in
presenting interactive live displays to help customers interact
with new benefits and features coming to market.

He pointed to new TVs being equipped with voice
activation presenting the need “to rethink end-cap displays,”
as the technology “becomes a major feature.”

As for changing dynamics in the e-commerce field,
May said hhgregg views consumers coming into
brick-and-mortar stores to compare pricing as a good
thing that gives a trained sales staff an opportunity to
educate the consumer and make the sale in the store
environment.

Online retail is growing into an important element
to hhgregg’s business, May said, adding that it is “the
fastest-growing segment of our business.”

The chain is “agnostic to how the consumer purchases.
Regardless of where the customer’s at in the
purchase cycle, we will help make sure they have a best
in class experience.”

“The consumer is empowered today, and we love
that,” he said. “If the consumer is interested in technology,
they do their research and come into our store.”

May said he sees consumers who order products
online for pick up at the store as customers looking for
validation on their purchase decision.

Regarding the stress on the industry resulting from
falling average selling prices, May said, “An educated
consumer will buy a better product.”

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