AVB Presses Brand Source's Advantages

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AVB/Brand Source members heard all about the fruits of their collective labor, namely making Brand Source a well-known brand name in electronics/appliance retailing, during its National Convention, held at the Paris Hotel, here, last week.

Executive director Bob Lawrence hosted the buying group's annual meeting, which brought together 3,000 retail members and suppliers. To illustrate the greater influence of this buying group, which reports annual sales of about $4 billion, the meeting's keynote speaker was General Electric's chairman/CEO Jeff Immelt. (See story, p. 1.)

In his opening address, Lawrence outlined the Brand Source branding strategy's progress by quoting recent surveys that show the group is now "the fourth most recognized appliance retailer in the U.S. and fifth most recognized CE retailer." Lawrence noted, "Today's consumers shop at about 1.4 stores before making a [buying] decision. If you are not top-of-mind in awareness you will not … see the customer."

Lawrence also went down to the sales floor and compared market share performance of independent retailers vs. national accounts from the first half of 2002 and this year. In appliances, "independent retailers' share at the end of the first half of 2002 was 29.9 percent. Now it is 28 percent. Independents have lost 1.9 percent share in the appliance category." He added that major appliance manufacturers are reporting a 0.3 percent increase in sales through the month of July, a virtually flat year.

While independents may have lost share in appliances vs. national chains, Lawrence said, Brand Source's share for the first half was flat. "That means Brand Source members are holding their own against the box stores and the home improvement channel. This is a tremendous effort on your part and shows we can compete … and that independents can survive and thrive, and can deliver on our promises."

Lawrence said Brand Source's goal is to grow to a point that it is "so strong that all other appliance, electronics and furniture dealers will aspire to it. A reputation that brings to [consumers'] minds positive recollection and confident expectations."

To create more awareness Brand Source plans to increase TV advertising in the coming year. A $10 million ad campaign will continue to appear on such syndicated shows as "Wheel of Fortune," "Jeopardy" and "Hollywood Squares." This campaign, and related co-promotions in print, along with $180 million in annual print ads by members, gives Brand Source $190 million in consumer advertising, Lawrence told TWICE. "In comparison, Best Buy does $200 million per year, so we are close."

Brand Source will also be adding furniture and Sleep Source, its packaged specialty mattress store, to its ad push this year. The buying group's product mix has remained relatively steady over the years, about 50 percent appliances, 25 percent consumer electronics and 25 percent furniture.

Brand Source will also begin running co-marketing ads with General Electric and Whirlpool. In commenting on the support of these and other major appliance vendors, Lawrence noted, "They are working hard to put together programs that allow us to compete on a head-to-head basis with home improvement and box-store channels. Obviously this is a tightrope walk for these manufacturers."

But he added, "They definitely do not have a design to have [national chains] as their only channel of distribution. They all know that it behooves all of them to keep independents strong and healthy."


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