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MARTA Upbeat About Its Market Position

While concerned about the general economic malaise, members of the MARTA Cooperative of America are upbeat about the group’s prospects for 2003 and pleased with its market strategy and positioning.

The buying group, which held its winter meeting here at the Radisson Universal hotel last week, consists of over 400 independent retail members across the country. Warren Mann, MARTA’s executive director, claimed a 10 percent gain in electronics/appliance sales during 2002, bringing the organization’s annual volume to “well over $2 billion.”

He noted that while MARTA’s membership is down 2 percent vs. last year, “Our sales and buying power are up. We are now bigger than NATM, are two-thirds the size of BrandSource/AVB and one-quarter the size of Nationwide.”

Mann and MARTA are upbeat because they claim that certain unnamed electronics and appliance makers that put much of their inventory in warehouse clubs and mass merchants over the past couple of years have lost market share. “The moral of the story is that other suppliers that decided to stay with MARTA, and independents in general, are up in market share.”

MARTA also claims independents are benefitting from Circuit City’s recent decision to eliminate commissioned salespeople. “When we found out that Circuit City people were available, we told our members to call the stores to tell them we were recruiting. So far we’ve had a double-digit pick-up [in salespeople] from Circuit City, at least. Good salespeople are hard to find, so this is wonderful for us.”

Jeff Blumenthal of B&B Appliance, based in Cleveland, said Circuit City’s decision benefits MARTA-type stores “because we are all service-oriented and sales oriented. They will be able to send people to our stores and sell them too.”

Steve Campbell of Schewel Furniture, Lynchburg, Va., said that Circuit City’s customers “don’t know about the change and think that the people on the floor now can advise them. That’s a problem.”

MARTA thinks its sales and service position in the marketplace, and Circuit City’s layoff of top salespeople, help the buying group’s members due to the growing complexity of electronics and major appliance products.

Mike Fischer of Nielsen’s, based in Spencer, Iowa, recalled a Warren Mann statement from last year. “He said, ‘Complexity is our friend,’ and it’s true. NARDA used to say that the industry used to be a bell curve, but it has become an hourglass, with national chains selling volume, but independents selling higher-margin products that we can explain. If you show, install and take care of the products you sell, you can be successful in this business.”

Mike Koon, also of Schewel Furniture, said that MARTA now wants the same backing from suppliers that have sold national chains and discounters. “We want full-time product trainers from manufacturers at the store level. Big-box guys are getting them and that’s what we need from them to sell even more product.”

The MARTA members TWICE spoke to last week seemed more comfortable competing with warehouse clubs, national retailers and Web-only retailers than ever before. Blumenthal of B&B Appliance described Web-only stores as being “just another mail-order house, just another way of selling.”

And while the Web is good for selling commodity electronics, Nielsen’s Fischer noted, “You can go on the Web and buy a 19-inch color TV, but would you buy a $2,500 or $3,500 HDTV? Consumers love us for that type of sale.”

Koon of Schewel Furniture’s added, “When it comes to projection TV, HDTV and other products like it, we are the source of information and service. Consumers don’t want to risk that type of purchase with someone who couldn’t back it up.”

Or as Mann put it, “The halcyon days of independents end when technology becomes simple, but we’ve never seen that happen yet. While the pace of technology in the PC ground to a halt we have in electronics Blu-ray [recordable optical disc] decks, flat-screen displays of all types and many other technologies coming.”