To hear director Ed Kelly tell it, last month’s biannual Prime Time meeting and convention of the Nationwide TV & Appliances buying group was nothing short of a barn burner.
According to Kelly, who helps manage the $7 billion dealer consortium, more than 2,000 attendees filled the halls of Caesars Palace, here, representing a 30-percent increase over previous attendance records.
More important, member dealers and their vendor partners generated “a tremendous energy” that flew in the face of the country’s soft economy and tepid retail sales. “All the divisions came together, working on all eight cylinders,” Kelly explained. “There was a real high energy level.”
Besides the esprit de corps — a function of the successful integration of former Key America chapters — dealers were also celebrating solid sales despite the economic downturn. “Business has been holding up,” Kelly reported, “particularly on the white goods side. Our sales are ahead of the industry figures by quite a bit, and sales of higher-end appliances are growing double-digit.
“It just blows my mind that people are spending $5,000, $6,000 on a stove or $40,000 on a kitchen in a heartbeat,” Kelly said.
But the downside of Nationwide’s bustling majap business is a lopsided 70-30 ratio of white to brown goods that the No. 1 buying group’s leadership is working hard to correct. “CE is the side where we’re most challenged but have the greatest opportunities,” Kelly said, in a message that was hammered home at the show.
“We stressed that in order to take advantage of the digital revolution, our dealers need to get their butts back into CE over the next 18 months. They have an opportunity to increase their business by 25 percent to 30 percent if they go after it, but they need a plan. We pushed that message very, very hard,” he said.
To underscore the point, Nationwide used the Prime Time forum to trumpet a new direct distribution deal with Philips that will also give members more advertising support and a greater say in product development and marketing (see TWICE, Aug. 20, p. 1). Kelly described the group as “very excited” about the Philips partnership, which follows similar pacts with several other CE suppliers.
“We already have a few arrangements in CE, and Philips was the icing on the cake,” Kelly said. “It’s a nice addition to our core lineup, and they had a tremendous response. The Philips booth was swamped.”
Kelly was also upbeat about a number of back office developments, including the recent addition of Electrolux/ Frigidaire to its EDI ranks, which now includes about 15 vendors that can conduct billing, processing and order taking with Nationwide online. “The cost of verbal orders is staggering,” he noted. “It costs $5 just to say hello and $30 to $60 just to process an order taken over the phone. You can’t take $60 out of a $300 washing machine.”
Reducing the cost of order taking for the manufacturer makes doing business with independent dealers more attractive, Kelly explained. “It gives us a step in the right direction to compete with the big boys.”
Kelly hopes to realize similar efficiencies from the group’s just-launched b-to-b site, which will provide dealers with real-time, around-the-clock data on their extended warranty portfolios and customer records, plus merchandising information and closeout specials by vendors.
The site will also allow dealers to send and receive communications from Nationwide and even make reservations for Prime Time shows, while vendors will be able to access data on individual dealers beginning in about two weeks.
At the same time, the buying group is preparing to roll out its first national b-to-c e-commerce site, called Nation Brand Direct. Located at www.brandsdirect.com, it is set to launch later this month.