The excitement was palpable at NATM Buying Corporation’s first annual meeting of the millennium, as members cheered the group’s newfound focus and new guiding light, executive director Bill Trawick.
For only the second time in its 30-year history, the group broke tradition by moving the venue from the Miami-area to Tucson, Ariz. But rather than look back, NATM forged ahead with plans to make the group a more unified, cohesive and single-minded force in the marketplace, and to bring the business up to New Economy speed with Internet initiatives and improved forecasting.
Leading the charge is Trawick, who trimmed NATM’s ranks to 13 like-size and like-minded members after expelling four smaller stores in January, and who brought Tops Appliance veteran Ernie Olson on board to head up operations and the new online effort.
“We want to be more consistent and cohesive in the way we perform, and we need to focus on coming to the vendors as one group,” Trawick explained during a break in the action at Tucson’s Loews Ventura Canyon Resort. Added NATM president and H.H. Gregg head Jerry Throgmartin, “Buying groups are typically loose affiliations that make one or two basic buys. Here, we’re asking manufacturers to look at us as one entity, the same way they look at the nationals.”
Throgmartin said NATM’s single-mindedness will allow it to become more efficient, take further cost out of the system and present more uniform promotions across all stores. “The vendor will get the same level of support in all of our markets,” he said.
Members were clearly enthused by the new game plan and sense of team spirit. “The group is much stronger than it has ever been,” said BrandsMart president Mike Perlman. “For the first time since I joined in 1986, we’re all on the same page and buying the same things. If we all buy together, we’re as effective as a group twice our size.”
“This is the first time NATM is firing on all cylinders,” agreed Abt president Michael Abt. “It’s important for everyone to buy as a group.” Added general manager Phil Hannon, “Bill Trawick is doing an exceptional job. He has an incredible mind. He’s brought in some young blood, revved up the group and is making some real strong changes.”
Observed American Appliance buyer Doug Colbert, “In all the time we’ve been in NATM, I’ve never felt more on the right path, and Bill is responsible for that. We’re focusing on products, marketing right where we have to be and are really serving our members. We’re a very homogenous group now, and people can relate to each other.”
Echoed American senior VP Dave Shepard, “We’re more cohesive and have a clear direction. We’re all really pumped, and we’re glad to have Bill aboard.”
Also fueling the good cheer were the robust sales that NATM members posted in 1999. According to Trawick, total revenue edged past the $3 billion mark last year, and the group’s rate of growth surpassed the industry average in virtually every category.
Although sales were essentially flat compared to the $3.1 billion garnered in 1998, and down dramatically from the $3.45 billion tallied in 1997, business is actually up once the contribution of now defunct Sun Television & Appliance is factored out, he explained.
“Gaining share against the national competition means consumers still want to shop the local merchant,” Trawick noted. He added that with the exception of Roberds, which is reorganizing under Chapter 11, “most members have growth plans,” with at least three dealers, including BrandsMart and Conn’s, opening new stores.
Leading the charge for NATM, whose dollar volume of brown goods to appliances is split 52% to 48%, were big TVs, DVDs and all manner of majaps.
“We far exceeded the industry in projection TV growth,” Throgmartin said, “and most of our stores are strongly supporting DTV. We see some shortages this year, but demand is really coming on strong.” He added that “DVD continues to ride very much of a high, and we will continue to be very bullish on it.”
Trawick said the rapid erosion in DVD pricing is more than offset by the category’s “staggering” growth rate, and the group is also upbeat about camcorders and TV/VCR combos.
In appliances, Throgmartin expressed concern over “the speed at which price points are falling,” particularly in refrigeration, but he lauded manufacturers for such innovations as contoured refrigerator doors and the Advantium cooking system — which will help the industry avoid a pricing free-fall.
“This is the first year we’ve seen every major manufacturer out there trying to produce innovation,” he said, adding that the sector, at least from a growth perspective, remains “very healthy.”
Elsewhere on the NATM agenda, top priorities include developing uniform forecasting models with vendors, reviewing agreements with ISPs and other recurring revenue services, and launching a b-to-b website in three months that will facilitate communication and the exchange of back-office information between members and their vendors.
But more pressing still, quipped Throgmartin during an after-dinner address, was updating the “prom photos” that members are still using in the group’s directory.