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Buying Groups See Sales Stabilizing

While CE retail is hardly out of the woods, dealers are beginning to find their footing again as traffic patterns improve and consumers regain the confidence to spend, buying group executives told TWICE in the past two weeks.

“Business is not good but there are signs of hope,” observed Richard Glikes, executive director of Home Theater Specialists of America (HTSA). “Traffic is up, prospects for future install jobs are picking up a little bit, and in January more members’ sales were up than down.”

Trends continued to improve this month, albeit slightly, Glikes said, but should pick up momentum as consumer confidence returns. “The problem is all about consumer confidence,” he said. “Once the government’s moves are more visible things will improve. Fewer vendors and less competition at retail may also be a good thing. Consumers like to comparison shop, and with the departure of Circuit City, maybe now they will come to us more often.”

Jim Ristow, executive VP of Home Entertainment Source, the A/V specialty division of Brand Source, said his members are faring better than the industry as a whole. “It’s a struggle, and the market is obviously volatile right now, but all things considered we’re actually doing well,” he said.

Ristow attributes the group’s relatively strong showing to year-long preparations for a down cycle, including cost controls and consolidated purchasing through its warehouse program. HES is also partnering with vendors on traffic-driving promotions, and has seen lift in markets that overlapped with Tweeter stores. Gains from Circuit City’s wind-down are less clear, however, given the disruptive effect of the going-out-of-business sales and the chain’s different customer base, he said.

Another promising sign is that consumer fear has abated somewhat from the fall. “Anxiety levels are still elevated, but not to the extreme degree they were a few months ago,” Ristow said. The government’s stimulus package could help raise consumer confidence further, he added, which would lead to increased consumer spending.

Overall sales also improved in January for the Progressive Retailers Organization (PRO) Group, although executive director/COO Dave Workman was hesitant to describe the uptick as directional. “Is there a trend? I don’t know. You really can’t predict,” he said.

Jeannette Howe, executive director of Nationwide Marketing’s Specialty Electronics division, has no illusions about 2009 being “a challenging year.” She painted the current marketplace as a mixed bag, with some members struggling through cancelled installations or delayed purchases even by higher-end customers, while other dealers have been “very successful.”

“We our urging our members to try to get a greater share of their customers’ business,” Howe said. “At Prime Time! next month [Nationwide’s biannual meeting and buy fair], we will be introducing a program to get more of our partners to offer installation services. We are also emphasizing they get more training in home automation and lighting systems.”

Bill Trawick, president/executive director of the NATM Buying Corp., agreed that “It’s going to be another tough year” and that market share opportunities will also abound. “It’s not healthy when people go out of business, “ he said, “although in the case of Circuit City, it’s throwing $8 billion or $9 billion out there to be divided among those still trying to exist.”

Among those angling for a piece of the pie is Bjorn Dybdahl, president of Bjorn’s Audio Video, which conducted a “Bailout Blowout”’ sale around Presidents’ Day that he touted on TV, radio and via email.

“We’re down,” Dybdahl acknowledged. “October through December we were down by double digits, with Circuit City closing stores here and blowing out product.”

“Funny thing,” he continued, “is we have traffic. We are only 15 percent down in door counts. We really can’t predict month to month or week to week.”

Some buying group execs also see a benefit in the extended cutoff date for analog TV broadcasts. “The further out we get the better off we are,” noted Glikes. ‘”I was worried that sales would fall off a cliff.”

According to Howe, “All the attention this date change has caused should get more consumers to go to stores for HDTV and give them the opportunity to get those coupons and get a converter box.”

And while Dybdahl, who’s been providing broadcast transition how-to’s on a local TV station, doesn’t believe the extension will result in many new sales, “It can help us from education and credibility standpoint,” he said.

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