By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Twelve months ago Roman Ross, a former Philip Morris executive, became CompUSA's third president/CEO in less than a year, with the mandate of improving the struggling PC specialty chain. The shakeup began soon thereafter — a comprehensive restructuring that cut the store base in half, brought in a fresh management team, and targeted small- to medium-sized businesses and tech-savvy consumers.
On the eve of his first anniversary in the corner office, TWICE spoke with Ross on the challenges of the six-month-old turnaround effort and the support of the company's billionaire owner Carlos Slim Helu.
TWICE: What surprised you the most after joining CompUSA?
Roman Ross: I was surprised by the number of leverage points and strategic options we had to build on. For example, our average selling prices on laptop computers are the highest in the business. We clearly attract a more professional customer.
TWICE: What was the biggest challenge?
Ross: Finding the best go-forward strategy. It is incumbent upon any organization to find a clear value proposition and build upon it. The company wasn't structured around that, although we had those opportunities across the board.
Complacency is the biggest disease at any company. After months and years of disappointing performance we underwent immense change over a three-month period. We brought in professionals from the outside and promoted folks who were open to change. We formed a management team vs. five different businesses, and began working toward a singular goal.
TWICE: What other changes have you implemented?
Ross: We're focusing on the small- to medium-sized business customer, rather than medium to larger businesses as we did previously. We're also changing the way we communicate with them. We're creating relationship programs, using more direct marketing and a sales force that's focused on outbound calls. Those customers haven't been spoken to in the past.
We're also changing our mix of products and services and how they are presented in the stores. We're creating innovation spaces to showcase new products, and are examining ways to communicate convergence in a meaningful way. The elements are there — Apple TV, HP servers, networking gear, content providers — but it hasn't all come together yet. We need to make it simple.
TWICE: What percentage of sales comes from small- and medium-size businesses?
Ross: It's hard to say because we have a lot of walk-in business and they don't announce themselves. But about 25 percent is presently done directly with that channel. We would like it to be in the upper 40 percent range.
TWICE: And the balance?
Ross: Tech enthusiasts. Educated professionals who want a higher-value product and an extended service plan to go with it. We're perceived by better educated customers as more professional, thanks to the labor model in our stores.
TWICE: Is CompUSA still being shopped around?
Ross: I can't speak to the intentions of Carlos [Helu], except to say that his support has been exceptional — nothing short of amazing. He's injected capital into the business and brought in expertise where needed.
TWICE: What does the future hold for CompUSA?
Ross: I'm very optimistic about our growth potential, and the vendors have been very supportive. The first step is to get our sales back up, and then we can start opening new stores. We will grow again.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.