The North American Retail Dealers Association (NARDA) is developing a new training program for independent dealers that’s designed to jumpstart their businesses with best-of-breed practices.
The effort, which provides dealers with individually tailored three-year growth plans, will begin in the fourth quarter as a manufacturer-sponsored pilot program. NARDA hopes to eventually expand the program to hundreds of independents, with funding provided by vendors, participating retailers and NARDA itself.
Going forward, the association also plans to create a retail certification program akin to the auto repair industry’s Automobile Service Excellence (ASE) designation. Based on criteria to be developed by manufacturers, distributors, retailers and buying groups, dealer certification would assure consumers and vendors of a uniform standard of excellence.
According to NARDA executive director Elly Valas, the seeds of the training and certification programs were sowed last year, when the association hired consultant Jerry Kalov to help it update its strategic plan and find a new focus. Kalov proceeded to interview some 30 manufacturers and distributors to discern what role the independent plays in today’s marketplace, and how dealers can enhance their position.
Their message, said Valas, was mixed. On the plus side, all of the vendors and distributors queried believe that independents play a vital role in the industry, particularly when it comes to selling highly featured products and bringing new products to market.
On the downside, however, the interviewees said that dealers, for the most part, are not doing a very good job. Their main beef: Independents are not making investments in their businesses, and are too dependent on manufacturers and buying groups to run their stores.
Obviously there are exceptions, and those polled cited such dealers as P.C. Richard & Son, H.H. Gregg and Abt Electronics as the standard bearers of how independent businesses should be run. “They said that if there were more retailers like these, they wouldn’t have to go to the big boxes,” noted Valas.
Indeed, NARDA identified some 30 to 40 such merchants on which it would base its training program. “The program will allow dealers to mirror some of their practices,” Valas said. “We want to provide the skills, training and tools to enable a dealer to become the next Abt. We want to kick some independent butt and bring them up to speed, up to the level of the few.”
The program, which Valas described as “a premium product in training and consulting,” would entail the creation of a three-year growth plan for each respective dealer that would take into account location, shopping experience and operational execution. Other best practices, as cited by manufacturers and distributors, include customer service, upgraded displays, vendor loyalty, low employee turnover, and brand recognition within a market.
Participating retailers would also attain a new platinum level of membership in NARDA.
“This program won’t be appropriate for all members, just a minority,” she said. “It won’t be a thousand, but there could be several hundred out there who’d be interested.” Valas added that the timing is right, as “tremendous opportunities” now exist in the marketplace for independent dealers, particularly in the areas of digital CE and premium majaps.
“There are plenty of places like Kmart to sell opening price point products and plenty of CEDIA dealers to sell the high-end. But there’s no place to sell mid-range premium goods,” she said.
Valas stressed that the certification and training programs do not represent a NARDA branding effort, and that she would be soliciting support from the buying groups. “Some of the groups think they are already providing these services to their members. But if they were, dealers wouldn’t be going out of business and losing market share.”
She added that dealers have to realize they need to make investments in their businesses if they hope to compete or make themselves attractive to a potential buyer. “You can’t just harvest your business,” Valas said. “You need an exit strategy.”