By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Home Entertainment Source (HES), the 10-year-old specialty A/V division of the Brand Source buying group, is rolling out a slew of new programs and services to give its member dealers another leg up in an increasingly competitive marketplace.
The initiatives, announced here during the group's third annual summit meeting and buy fair last month at the Hilton Anatole, include a new warehouse distribution program for custom installation parts and accessories; the addition of Panasonic and Mitsubishi to its current A/V distribution program; and an HES consumer Web site, to launch in three weeks, that will provide links to member pages generated by searches on Google's shopping engine. The online service will be free to members for the first year and $600 annually thereafter.
The group is also forging ahead with plans to develop an overarching branding strategy that will provide national exposure to member dealers beneath the HES banner.
On the distribution front, HES has added Hitachi (Director and regular series), Mitsubishi (1,080p DLPs and LCD flat panels) and, effective May 1, Panasonic plasmas to its Expert Warehouse program, while existent suppliers Samsung and Sharp will join Pioneer in providing tiered vendor rebates to large volume dealers. In addition, dealers who are shipped direct from Sharp, JVC and Hitachi can now centralize their billing through HES in order to leverage the group's favorable inventory allocations, which have given members access to flat-panel product in an extremely tight marketplace.
“The vendors now regard us as one big national dealer,” said Jim Ristow, the group's general manager.
Indeed, with $1.2 billion in sales, 475 members and 675 storefronts, HES is now a larger CE factor than Tweeter, Ultimate Electronics or most of its rival buying groups, Ristow observed. Growth is also exceeding the competition, with sales up 27 percent last year vs. the industry's 11.5 percent gains.
In addition, HES has formally launched Expert Customer Warehouse, a new distribution program that will provide member dealers with improved access to inventory for custom installers.
Expert Custom Warehouse will serve as a complement to Expert Warehouse program, which was launched in 2003 to provide members with on-demand fulfillment and more competitive pricing on A/V products. Combined, these programs help members reduce inventory expenses and maintain group-negotiated prices, HES said.
“Members have had great access to video products through our Expert Warehouse program, and they've expressed a need for a similar outlet to custom installation products,” said Ristow. “The program … mirrors the convenience and overall benefits of Expert Warehouse, while specifically addressing the custom installation needs of our members.”
ADI, a leading wholesale distributor of low-voltage products, will store and supply the inventory used by HES members, who will have access to the custom installation inventory as needed, either through next-day delivery or at more than 100 ADI locations nationwide. In addition, ADI will provide HES with staff support and a dedicated toll-free number to respond to sales-related and general inquiries.
ExpertWarehouse is jointly owned and operated by distributor BDI-Laguna.
In other HES news, the group has named Andy Orozco as Southeast regional manager. Orozco, formerly a national account executive and Eastern zone manager with Hitachi Home Electronics, will have the responsibility of implementing HES member benefits such as marketing and training solutions, wholesale and retail financing programs, warehouse fulfillment, and the group administered health plan throughout a 10-state territory. “I look forward to helping members become even more profitable by utilizing more of the many programs HES offers” Orozco said. Added Ristow: “Andy brings industry expertise, character and a strong desire to help our members become even better business people. We are very fortunate to have someone of his caliber join our growing team.”
On the branding front, HES is currently conducting consumer research to determine the “best way to make a connection to consumers,” said Greg Glass, principal of Brand Source ad agency Glass/McClure. HES sees an opportunity to triple its sales based on a recent Consumer Electronics Association study showing that only 49 percent of shoppers are aware of the specialty A/V channel, and that 32 percent would shop it if invited.
Ristow also noted that the group had considered, but ultimately passed, on developing a private label video program for HES dealers, due to the ready availability of flat panel TVs from second-tier and third-tier vendors and the uncertainties of service and support.
(All photos by RUDA Photography, courtesy of Brand Source and HES.)
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