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HES Expects More Disciplined Holiday

Anaheim, Calif. – Tighter production and increased price enforcement by manufacturers will likely lead to a more disciplined holiday selling season.

That’s the outlook of Home Entertainment Source (HES), the A/V specialty division of the BrandSource buying group, which briefed members yesterday during a pre-holiday webinar.

Executive VP Jim Ristow told participants that vendors’ build-to-order production strategies will keep inventories in line, and will prevent the gluts of past holiday periods that led to excessively disruptive pricing and margin declines.

Also contributing to a restrained holiday season are the new UPP and multi-channel MAP policies, which have helped stabilize the marketplace within the mid- to premium-price tiers where HES’s assisted-sales dealers dwell.

However, Ristow expects retailers to supplement their tier 1 Black Friday buys with hundreds of thousands of off-brand SKUs, including 42-inch TVs. That, together with temporary disruptions as de-authorized e-tailers sell off their remaining inventory, could lead to several weeks of “the Wild West,” he said.

Much of the promotional focus will center on 50-inch and even 60-inch screen sizes, he noted, particularly following Vizio’s entry into the large-screen market.

All told, HES is forecasting a solid holiday season that’s “good, not great,” and on par with last year’s fourth-quarter take. To get their fair share, Ristow urged members to drive traffic to their stores by promoting before and after the Black Friday period, using the group’s line-up of Expert Warehouse drop-in models and special buys and zero-percent financing offers.

 He also advised members to offset low-margin promotional models by trading up customers to better-quality SKUs, attaching sound bars and BrandSource warranties to the sales, and offering component and wireless audio options.

Indeed, HES’s audio business is up double digits, Ristow told listeners, and its ProSource partnership with the Progressive Retailers Organization (PRO Group) now stands second only to Best Buy in audio sales.

HES is also building its whole-home control business as its system integrator members outpace the group’s retailer segment in sales growth and hiring.