A quick look around the just opened Flatbush, Brooklyn location of
Dealers and other attendees at March's two major buying group shows expressed cautious optimism about the economy, which some believe could bottom out this year and begin to rebound by Christmas.
The two events — Nationwide Marketing Group's PrimeTime! meeting and buy fair in New Orleans, and Brand Source's annual Spring Summit in Dallas — were critical barometers of the marketplace, given the geographic scope of their membership and the combined $24 billion in sales they represent.
While business has improved markedly since December, with strong increases coming in March, traffic and sales remain halting, dealers told TWICE, and seemingly mirror the ups and downs of the stock market.
To return to a solid growth track, retailers will need to retool their businesses by lowering costs and offering new products or services, members said, and consumers will need to feel more secure in their jobs before making big-ticket purchases.
“It will be a challenging year,” said John Flanner, principal of Flanner's Home Entertainment and a member of the contingent from the Progressive Retailers Organization (PRO Group) that attended the Brand Source show. “We will have to work hard and stay focused all year long, not just for a few months, but good things will come out in the end.
“The good news,” he said, “is the industry is making fantastic products and people are interested in them. There's pent-up desire after all the retrenching, and the hope is for a big surge.”
Bob Cole, principal of World Wide Stereo and incoming president of Home Entertainment Source (HES), Brand Source's specialty A/V division and PRO Group's strategic partner, was forced to make some “hard decisions” after overcoming his own resistance to change. But the actions — which included adjustments in staff, salaries and commissions; dropping major lines; and launching his first e-commerce site — have made his company “a smaller, smarter and more profitable business,” he told attendees.
Kerry Moyer, strategic relations senior director for the Consumer Electronics Association (CEA) and director of PARA, assured HES members: “In my 32 years in the business I have seen a lot of economic downturns, and although this one is very painful, this too shall pass.” The industry should begin to see some relief in the third or fourth quarter, he projected.
Jim Ristow, executive director of HES, told members that the economic contraction will likely hit bottom this year, and that some tentative signs of a recovery include recent spikes in the stock market, a resurgence of new-home sales and falling interest rates.
“Perspective is everything,” he said.
Indeed, for Nationwide dealer Kathy Alexander of Alexander & Ray's TV & Appliance, business is flat in real terms but “pretty good” relative to the marketplace. “People still have to replace their broken products,” she said during an upbeat welcome reception at PrimeTime! “Those with money are buying premium goods and those without are buying scratch-and-dent models. But either way they're buying.”
More intangible but no less compelling was the palpable “buzz” felt at both shows. “The energy and enthusiasm of dealers attending made it clear to me that they meant business,” said CEA's Moyer. Similarly, HES' Cole recounted a group of attendees who approached him during a reception to say “We do believe,” in a reference to the Summit's theme of “Don't Stop Believing.”