Orlando, Fla. — Despite weakness in the white-goods industry and heightened competition in consumer electronics, member dealers of the Nationwide Marketing Group grew their market share last year by surpassing industry unit sales averages in both categories, executives of the buying organization said.
“We were in growth mode in appliances and electronics,” Nationwide’s president/director Ed Kelly told TWICE during the group’s biannual PrimeTime! convention, held here this week at the Walt Disney World Dolphin Hotel. “We way outpaced the appliance business, and were ahead of the electronics marketplace.”
This year, dealers reported, and Kelly confirmed, that 2007 began on a weak note, with January sales suffering from tough year-ago comparisons, brisk December volume and the effect of vendor-imposed price hikes on majaps. Business this month, however, is “picking back up,” Kelly said.
Kelly attributed his members’ market-beating performance to a number of factors. On the CE side, dealers were able to avoid the brunt of the promotional maelstrom due to their location in secondary markets, where the discounting was less severe. In white goods, while the housing slowdown had some affect, “the bulk of our business is in the replacement market,” which held up better than the builder-driven contract sales side of the industry, he explained.
Perhaps most important, “The consumer wants assisted sales,” Kelly observed, given the plethora of new technologies and product choices. “They’re demanding to be taken care of.”
Specifically, Nationwide dealers exceeded average unit sales in CE last year by 5 percent overall and 9.7 percent in TVs, reported Mike Decker, electronics marketing VP for the group. This year, he projects that Nationwide’s CE unit volume will increase 10 percent over 2006 totals, compared with industry forecasts of a 1 percent increase in unit shipments year over year.
“We’ll achieve this,” he said, “through improved and aggressive pricing from our strategic vendor partners, which will give us an advantage in the marketplace against big-box retailers.” Nationwide will also leverage “growth opportunities” in flat-panel TV, audio, satellite systems and recordable DVD. In particular, “HD DVD recordable with the Toshiba camp will be [a] terrific opportunity within our membership base,” Decker said. “I also expect we’re going to have a strong year in audio to complement the sale of flat panel,” boosted by an exclusive program with SLS Audio. Exclusive programs should also drive members’ DirecTV business, he added, while sales of entertainment units are also expected to increase as an adjunct to growth in flat panel.
Sales figures were not immediately available for Nationwide’s white-goods business, although executive VP Les Kirk said that much of the group’s gains came out of Sears, which continues to lose market share. In a Nationwide report, Adam Thomas, the group’s appliance marketing VP, said promising new opportunities in majaps include GE’s sweeping makeover of its built-in line; the third-quarter rollout of a new Electrolux brand that will be targeted at the mass premium segment; and the growing popularity of LG, which is the No. 2 brand at The Home Depot and has been added to Sears’ assortment.
Moreover, while Whirlpool’s integration of Maytag has been difficult, Thomas observed, “We are confident that Whirlpool will work out its brand strategies and will invest unprecedented levels of resources into innovation and new product development.” Already that effort has resulted in the launch of Maytag’s much-anticipated commercial-grade Centennial laundry pair; the Jenn Air Oil Bronze series; and the KitchenAid Architect II platform.
“The Whirlpool acquisition could best be described as one of the single biggest events I’ve observed in my entire career,” Thomas noted, “and its repercussions will be felt for years to come.”
The Nationwide senior management team of, from left, Robert Weisner, Ed Kelly and Les Kirk at this week’s PrimeTime! convention, held at Disney World’s Dolphin Hotel in Orlando, Fla.
Toshiba’s Jodi Sally and Scott Ramirez on the PrimeTime! show floor. Toshiba is showing its second-generation HD DVD players and enhanced REGZA LCDs, and arranged for the 75-foot HD DVD Mobile Experience trailer to dock at its booth.