Majap News, Rumors Stir Up Buying Group Events In Vegas - Twice

Majap News, Rumors Stir Up Buying Group Events In Vegas

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LAS VEGAS -- The timing was uncanny.

As word of Wal-Mart's majap plans, a possible Frigidaire/ Maytag marriage, and Whirl-pool's stock woes hit the street, two major buying groups -- MARTA Cooperative of America and Nationwide TV & Appliance -- converged on this town for conventions last week.

Despite the upheavals in the majap market -- or in Circuit City's case, because of it -- the groups enjoyed buoyant shows with a surfeit of senior-level suppliers and loads of deep deals on white goods.

"We had a good show with lots of activity, and our members are chipper and upbeat," said Warren Mann, executive director of MARTA. "There's a lot going on in major appliances, and a lot of great deals floating around, as some vendors are trying to instantly replace their Circuit City business."

Those buying opportunities have helped MARTA "prepare for a short burst of goofy pricing" in response to anticipated Labor Day sales events, he said.

"If Circuit runs a $799 side-by-side, or a $288 electric self-cleaning range, we're prepared," said Mann.

MARTA is reluctant, however, to load up on inventory, given the uncertainties of the marketplace. "Although the inducements are there to buy heavy, I've seen more price collapse in the last two months than in the last five years," Mann said, "and I'm just a little too shook up to project that everything's going to be rosy."

By contrast, CE has become a calm sea amid the roiling majap waters. Despite a slow summer for white goods, "Electronics has been good all along, and MARTA has been doing much better with DVD and large-screen projection sets," he said, which raise the transaction price and induce add-on sales.

Internally, the big news coming out of MARTA's meeting at the MGM Grand was the hiring of Zmarket.com, a virtual distributor, to provide a single front-end interface between the buying group and the scores of b-to-b supplier sites it frequents.

According to Mann, the interface, which should be operational in 90 days, could allow dealers to place and track orders and check credit limits with virtually all of its vendors without re-keying data and contending with a multitude of protocols.

Meanwhile, across the strip at Mandalay Bay, 1,300 Nationwide dealers and suppliers gathered for the group's biannual Prime Time buying show. The event -- which was the first to welcome the new BrandDirect division, comprised of former Key America dealers -- was highlighted by addresses from GE Appliances CEO Larry Johnston and JVC executive VP/chief operating officer Harry Elias, who also spoke at MARTA.

Johnston addressed the independents' distribution concerns in a no-holds-barred question-and-answer session, while Elias compared dealers at both buying groups to the survivors on the popular reality TV show.

"To survive -- to not get 'thrown off the island' -- dealers need to help customers test drive the equipment," Elias said. "When we do this, customers ... realize they want and need an experienced salesperson to talk with them and to teach them the differences between the growing lists of products."

The show's main event, according to Nationwide, was its 60,000-square-foot appliance and electronics exhibition, featuring products from more than 200 vendors. "It's been a full house every day," said director Robert Weisner. "The vendors seem pleased, and the members say they're here to buy."

Casting a shadow over the conventions was news of a new competitor in Wal-Mart, the world's largest retailer. "They're all in a panic over there," observed Nationwide attendee Marty Friedman of Eastern Marketing Corp.

Argued MARTA's Mann, "Over-distribution and self-serve selling hasn't grown the appliance business, but it's very effective at bringing down the average cost of goods at retail, squeezing margins for retailers and vendors. It's hard for me to believe that Wal-Mart contributes anything to reversing this trend."

Mann acknowledges that GE "has factories to run," and that its CEO "is a good friend of independent dealers" who's struggling to straddle both sides of the channel divide. But he also cautioned that "there are certainly some dealers of the opinion that enough is enough; and that they can no longer afford to sell the same stuff that's on the floors of Best Buy, the lumber yards and Wal-Mart."

To that end, he said, MARTA members have become "extremely enthusiastic about Amana," which no longer sells Best Buy, does no business with the home improvement chains, and whose president, Chuck Carroll, was a keynote speaker at the show.

But Bob Lawrence, executive director of Associated Volume Buyers, which holds its own convention here next week at the Paris Hotel, doesn't think a white-goods Wal-Mart will have much impact on the independents. "If it's not them, it will be somebody else. Always has been, always will be," he stated. "They'll cut a real wide path with self-serve, low-end product that we don't sell a lot of anyway. Our forte is step selling."

Between Home Depot, Circuit City, Wal-Mart and a possible Maytag sale, he added, "more has happened in appliances in the first eight months of 2000 than in the last 10 years."

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