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Nationwide Leading Dealers Toward High-Tech Opportunities

LAS VEGAS — The Nationwide Marketing Group has added sales-floor tablets and home control platforms to its retail repertoire as it urges its member dealers to evolve their merchandise mix and infrastructure.

The new retail tools were introduced last week at the group’s biannual PrimeTime! meeting and convention, held at the Venetian and Sands Expo under the banner “Blueprint for Success.”

Thanks to the first-time participation of both its NECO and Canadian Cantrex divisions, the event was the largest in the $14 billion group’s history, with 325,000 square feet of exhibition space and some 5,000 attendees, including more than 1,200 independent majap, CE, furniture and flooring dealers.

But despite a slowly improving business climate, Nationwide’s management team is encouraging its more than 3,500 member companies to embrace new technologies like wireless connectivity and home automation, and to plug into the digital infrastructure that Nationwide has developed to support ordering, merchandising, marketing, rebate tracking, training and other key retail functions.

The latter is provided through a central intranet platform dubbed MemberNet, which is being updated with a more robust database and user-friendly interface for digital signage. The signage program feeds vendor videos and custom clips to individual stores, and will soon be able to track in-store viewership, even by gender, noted COO Les Kirk.

Another new high-tech tool is an in-store tablet that sales associates can use to help combat showrooming. The 10-inch tablets are supplied by Toshiba, partly funded by vendors, preloaded with Nationwide software, and will be made available to dealers next month at “well under” $200 per unit, explained senior appliances VP Jeff Knock.

The goal, he said, is to arm all 10,000 member storefronts with the mobile devices, which will provide a wealth of information from the group’s new Answers campaign that includes marketing assets, promotional events, sales training and detailed product information, including reviews, demos and price comparisons with rival merchants. Freed from three-ring binders and fixed terminals to answer customer questions, associates can use the sales tool, dubbed Info- Pad, to circumvent showrooming and improve close rates, he noted.

About 2,500 tablets will be available at rollout, although Nationwide can ramp up quickly to meet demand. The tablets are not transactional, but the group is looking to add POS functionality in the future, Knock added.

On the merchandising side, the advent of mobile-controlled majaps and ubiquitous device connectivity will compel both TV and appliance dealers to sharpen their skill sets in order to remain competitive in a rapidly changing home environment.

“We can’t just sell panels and audio,” observed electronics senior VP Tom Hickman. “We’re working hard to get our members to diversify the mix with home automation and not only sell legacy TV. Vendors are going to force us into that world.”

To that end, Nationwide has added home-control providers Key Digital and Control4 to its vendor ranks through its Specialty Electronics Nationwide (SEN) integrator division, which hopes to share the wealth with the group’s mainstream TV and appliance members. “Whoever owns the home-automation space will own everything we sell,” stressed SEN executive director Jeannette Howe. “We need to usher our CE and appliance people into this arena. The connected home is something that e-tailers and other retailers can’t do.”

Backing up her words with actions, Howe and two SEN associates trained for and passed Control4’s certification program, and are now accredited levelone installers for that platform. They also plan to attain Key Digital certification, in order to be Nationwide’s “ambassadors” for connected technology.

“This is our future,” Howe said, “and without it we will get left behind.”

Other opportunities for CE dealers include home security, LED lighting, soundbars, and OLED and Ultra High-Definition TV, Hickman said. The latter aren’t expected to generate “a lot of transactional dollars” this year, but will provide “a shot in the arm” to dealers that are excited about the margin opportunities and new business cycle that the advanced display technologies will usher in.

Nationwide CEO Robert Weisner acknowledged that CE dealers are suffering, but stressed that the group is “working on new solutions” and remains committed to the category, which represents about 25 percent of its sales mix, or approximately $3.5 billion. “We own most of the independent CE business,” he said.

Hickman added that the advent of unilateral pricing policies (UPP) and stricter MAP programs “has helped stabilize and return some sanity to the market,” and that Nationwide’s CE business has grown organically by some $500 million year over year thanks to about 200 net member additions, including TWICE Top 100 dealers Micro Center, Paul’s TV, Jetson TV & Appliance Centers and Badcock Home Furnishing Centers. His goal, he said, is to double CE volume over the next two to three years.

In majaps, a $7 billion category that represents half of Nationwide’s volume – and is approaching a 20 percent industry share – the group enjoyed a 13 percent increase in average selling prices last year and a 4 percent mix improvement without the benefit of price hikes. Knock acknowledged the manufacturers for their disciplined MAP enforcement, both online and in stores, which starting last summer has “cleaned up the marketplace” and leveled the playing field for independent dealers.

Coming into 2013, members are enjoying more majap momentum than in past years, Knock noted, with volume up 23 percent through the third week of January. Demand is especially strong for French-door refrigerators, high-efficiency top-load washers and premium outdoor cooking, and the group is seeing a resurgence in two- and three-piece kitchen bundles.

CE and majap dealers are also benefitting from the addition of high-margin mattress and furniture SKUs, such as Inada’s $8,000 Sogno DreamWave massage chair, the executives said. Underscoring the point, one new online-only furniture member, Houston’s Mohshya Home Furnishings, has seen annual sales mushroom to $20 million since its launch in 2008, owner Dhillon Arshad told TWICE.

The majap and furniture gains are being fueled by a rebounding housing market, which executive VP Dave Bilas said should translate into higher sales of consumer durables starting in the second quarter.

But even through the worst of the recession independent dealers managed to grow share, Weisner said, and now represent 50 percent of industry sales and 80 percent of manufacturers’ profits.