LAS VEGAS – The Progressive
Retailers Organization (PRO Group) and its strategic partner Home Entertainment
Source (HES) plan to expand their product mix beyond the buying groups’ core
A/V specialty assortments.
New categories under consideration
include gaming, computers, mobility devices, control automation, energy
management and subscription-based content services, group executives told
TWICE.
The two independent dealer
organizations, together known as The Alliance, will also press vendors for more
derivative models and will explore direct-sourcing opportunities in multiple
categories, including possible private-label programs, to better differentiate
themselves in the marketplace.
The Alliance will support the new product
categories with turnkey business solutions, including logistical support through
HES’s fulfillment centers, in order to reduce risk, lower the barrier of entry,
and deliver profitable sales for members, the executives said.
According to PRO Group president/COO Dave
Workman, the new categories will help drive traffic to members’ storefronts as
digital convergence and wireless mobility reshape the industry and consumer
lifestyles. “We need customer acquisition,” he said. “We can’t bleed off
customers as the energy moves to a digital connected world.”
“The business models of old are just
that – old,” added Jim Ristow, executive VP of HES, the specialty A/V division
of the Brand Source buying group. “There are opportunities, but it means doing
things differently.”
“2010 is all about solutions,” he
told Alliance dealers and vendors Wednesday
night during PRO Group’s annual International CES cocktail reception at
Bally’s. “We want to be the solution for the industry for everything above the
commodity level.”
Workman and Ristow said the two
groups will work more closely this year following a bruising 2009. Total PRO
Group revenue declined about 12 percent last year to just less than $1.9
billion, due largely to the liquidation of Tweeter, which had long been PRO’s
largest dealer. All things considered, “We did a pretty good job of overcoming
Tweeter,” Workman said.
Ristow said HES revenue was flat in
2009, but exceeded sales within the specialty A/V channel by between 5 percent
and 8 percent.
