Fred Towns is a tough interview.
Not because the former Panasonic senior VP and current New Age Electronics president is evasive; just the opposite. Towns is what was known in the “Mad Men” era as an idea man. Thinking 10 steps ahead of the pack, he gleans market insights from consumer behaviors that would go unnoticed by most, and uses them to spin-out new and novel constructs for his business.
TWICE sat down with Towns during the IT, CE and gaming distributor’s annual Retail Dealer Summit last month in Los Angeles, and did our best to keep up.
TWICE: You took a different approach to this year’s Dealer Summit program — expert marketing and demographic presentations vs. vendor roundtables and panels.
Customers can come in and learn about product, but how do we give them what they should be thinking about? I’ve been going around the world, to two think tanks in Tel Aviv, a second trip to Shanghai, trying to get a flavor for where things are going, and I thought it was very necessary to make comments about what the trends are in the industry, and what the different segments of business are that people need to focus on.
The seniors are on one side, and baby boomers and GenX — who are a big, mature side of the buying horsepower — are in the middle taking care of parents and many times the millennial, who is their offspring. And within all that it’s apparent that the female customer is also very influential.
But that buying power in the middle is really powerful.
TWICE: They’re really calling the shots.
Today the shopper is empowered because they have handheld devices that enable them to look and search just like on a computer. They can do a deeper dive back home on a laptop, but in the moment their phone has really empowered them, so the best thing we can do today is give them a wealth of good, quality information and give them choice.
So I’m saying to all my customers “Let us help you,” because our strength is to extend the assortment of what you can afford to carry in the store, whether it’s a space issue or a dollar issue. We can extend that virtually, and when the customer pings and places their order, within 48 hours it’s in the account’s credit card files going into their bank account. We already have terms with them, so they get a great ROIC on their model because they have a certain amount of days that they don’t have to pay for anything; they just enjoy having that cash as working capital. It’s almost a no-brainer in this world of selection and immediacy.
TWICE: Fill us in on your same-day delivery pilot.
It’s not completely done but we’re looking at five major test markets where we’re going to work with a select carrier to enable product to be picked up at designated locations, to get it into one of these major cities within a two- to five-hour range. Meaning that if I need it today and we select the window, it gets there today, whereas typically same-day delivery today can’t guarantee the necessary window, only “by 8:00 tonight.”
It could also apply to integrators — if somebody needs a board for a buildout of a server system, they call and it’s delivered to the door of that installation, so the job isn’t delayed.
TWICE: And yet the point was made repeatedly during the presentations that brick-and-mortar is still home base.
That was clearly the message I wanted to deliver to the retailers in the room, that the store is still extremely important.
When it comes to apparel or a pair of shoes, there is some need to go try it on. Some of the companies like Zappos and others have said “unlimited returns.” Order three pair in three different sizes and widths and keep the one you like and send the others back. But in consumer electronics we’re not as flexible as that; the industry tends to be very concerned when a product is sent back.
TWICE: You’ve been branching out into new categories like countertop appliances and educational toys. What are your criteria for a entering a new business?
Probably my first consideration now, looking at the Internet of Things, is whether it ties in with the ecosystem of other inter-related products, so that we can bring a total solution to a customer.
Another side, crazy enough, is things that we use every day. So yes, we’ve been looking at small appliance areas, and figuring out how to make a more stylish, quality offering by some manufacturers of products that have been around for years, like stand mixers.
So we’re working with Sencor, which is a newer partner that has beautiful European design and a color array that comes with a robust series of accessories, which enables customers to have a different choice beyond what was pretty much grandma’s mixer. I think that’s exciting to people who are truly into cooking, because color makes a statement in the kitchen too — and based on what we learned from the presentations today, 80 to 85 percent of the shopping choices are made by women.
TWICE: How’s the PC business doing?
We’ve worked with our manufacturers including HP to create some unique derivative models with different build variations and color assortments, and they’re doing quite well for back-to-school. We’re trying to find ways to make it more exciting. As I said at the presentation, 66 percent of notebooks are being purchased by females, so you have to have a little different palette of what you’re going to offer, because the female might want choice.
And then you have decide too if you’re going to use this for surfing the web, running business applications or if you are going to go into gaming, which is going to require a more robust piece with a lot of horsepower. The gaming side is extremely hot, and as the software gets more sophisticated, along with the tie-in to virtual experiences — virtual reality, augmented reality — people are trying to buy what they believe is going to be ready for the wave of the future. We’re getting a lot of information requests on VR.
TWICE: What’s your outlook for Q4?
We feel that things are picking up, which is good; we’re happy to see that. We’ll finish up this quarter in a more positive position because the retailers are getting the feel that people are going to come buying again. It’s not going to be crazy, stellar increases for holiday, but it’s going to be increases above what the market’s projecting.
But I think it’s going to be a good quarter. I think there are reasons to buy because there’s some new, interesting technology, and I think that products that are tied into the home controller are going to be very interesting, especially with voice. It’s very slick to be able to lay in your bed and say “Fireplace on,” and the fireplace goes whoosh and turns on. You feel like Austin Powers.
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