WAYNE, N.J. — The Northeast Company (NECO) Alliance is barreling into the holiday season on a head of steam.
The Northeast regional buying organization, a division of the $14 billion Nationwide Marketing Group, said its independent dealers are confident and its vendor programs are solid following what it described as its most successful fall show ever.
The Expo XVI event, held last month at Foxwoods Resort & Casino in Mashanucket, Conn., drew more than 1,500 attendees, including 450 members from each of NECO’s four chapters. Representing some 600 storefronts, they came to shop majaps, CE, financial tools and support programs from more than 75 exhibitors spread out across 140 booths.
New at the show was a tablet-based electronic ordering system, developed by Howie Hunger — brother of NECO executive operations director Mel Hunger — which helped streamline the ordering process. A veteran of IBM, Hunger has also developed an in-house rebate program for NECO and its dealers.
NECO’s next meeting, its annual spring confab, will be held for the first time in conjunction with Nationwide’s PrimeTime! convention, which is slated for a March 3-6 run at the Venetian in Las Vegas.
According to NECO executive director Anthony Bruno, things continue looking up for the billion-dollarplus group as it prepares for the critical fourth quarter. He recently shared his outlook for NECO, the holiday season and the industry in the following give-and-take with TWICE.
TWICE:What’s the latest news out of NECO?
Anthony Bruno, NECO: Our membership continues to grow based on the strength of our pricing, advertising, and many marketing initiatives. Once a prospective dealer sees all that our stocking warehouses provide, it really is a no-brainer to join. We are here to serve their needs and work diligently to make sure they have the best retail programs to compete.
TWICE: How’s business?
Bruno: Business has been strong. We just completed our fall show which has been our most successful yet. Our dealers were very upbeat and our programs have never been stronger.
Even though the economy is still struggling, our members continue to capitalize on consumers that are looking for a better shopping experience with more informative and professional sales people than the national accounts can provide. Consumer Reports continually states that the independent retailer consistently provides a superior shopping experience indicative of an owner-operated environment, and our NECO programs ensure they can more than compete on price.
TWICE: Which categories in appliances and electronics are showing the most strength?
Bruno: In major appliances we have seen a resurgence in agitator washer sales. There seems to be a backlash against technology by some consumers that have previously had a poor experience with front-load or top-load HE [high-efficiency] laundry. Front-load concerns are centered around mildew issues or a desire for a simpler operating machine. HE top load has had issues with clothes tangling and not getting fully wet.
In consumer electronics, the focus in flat panel continues to be on ever-increasing screen sizes, and sales have grown in the 60-inch and higher sizes.
TWICE:Any plans to tap into tablets and mobile?
Bruno: We do not sell mobile devices. However, more and more retailers are using tablet technology to improve sales presentations to consumers as well as to increase order processing.
TWICE: What’s your outlook for the holiday selling season?
Bruno: It is positive, and we feel we have the ability to gain market share. Our expectation is that sales will spike as they have been all year during a holiday period. We expect margins to improve slightly over last year due to prior price increases and less aggressive and comprehensive discounting as vendors try to narrow model selections for promotions.
We are seeing however some vendors returning to reduced pricing on front-load laundry, which is concerning us since retails, and profitability, were steadily increasing for this category over the last year.
TWICE: Will the consumer come back in force for Christmas?
Bruno: There are fewer shoppers, but there is still business out there to be had. If the value proposition and service is there, you can win the consumer. We have had great success selling kitchen packages which have increased profitability.
TWICE: Will UPP hold through the holidays?
Bruno: As long as the vendor community enforces it. They are the only ones who can ensure its success by cracking down on retailers whose only consumer proposition is low prices, regardless of margin degradation.
TWICE: Do you anticipate any inventory tightness?
Bruno: We have negotiated strong vendor agreements and do not anticipate any shortages.
TWICE: What impact will The Home Depot’s addition of Whirlpool and Electrolux have on your dealers?
Bruno: Although it was disappointing because it was the independent retailer that built these brands, we are confident in our ability to compete with Home Depot, as we do on other brands they carry. With the increase in technology, consumers are looking for a place that has knowledgeable sales staff and provides more attention to detail and personal service, all of which the independent retailer excels at.
