Amazon’s second-place perch atop TWICE’s just-released Top 100 “Retailing Giants” ranking might suggest the jig is up for traditional dealers.
Well, yes and no.
The list, which combines our Top CE and Major Appliance retailer sales totals as determined by market research partner The Stevenson Company, reflects both pain and gain for Nos. 3-100.
Pain, if not dissolution, for those merchants who remain stuck in their old 20th century boomer ways, and a new lease on life for those with the creativity and will to break the old mold and start anew.
As Rick Calacci, home entertainment sales senior VP at LG Electronics USA, told TWICE, “Those retailers with a defined strategy are doing just fine” in the era of Amazon. But it means investing time and money, both in-store and online, to enhance the shopping experience and tell a technology story, rather than selling simply on price and item, he said.
Case in point: first-place Best Buy. Written off by many as another big-box dinosaur on its way to the tar pits, the company did a 180 under newly installed CEO Hubert Joly by matching prices, overhauling its website, adding services, and addressing its vast real estate by doling out branded floor space to vendors.
On the independent side, Tom Campbell, chief technologist at Los Angeles’ Video & Audio Center (VAC), lectures at Georgetown University on selling tech in the digital age, and practices what he preaches. “We’ve learned how to compete with e-commerce by integrating the web, social media and storefront retail into a hybrid marketing and hybrid retail approach,” he explained.
In addition, the chain’s assisted sales floors, its proximity to the major Hollywood studios and Campbell’s flair for spectacle have made VAC a singular platform for flagship TV launches, including Samsung’s The Frame TV, LG’s 77-inch “Wallpaper” OLED and Sony’s first OLED Bravia, all within the last four months.
As a result, he said, the business has more than doubled year-to-date.
For other dealers, diversification into bulky, high-margin categories like premium appliances, and mattresses and bedding, has provided greater profitability and a buffer against online incursions.
Indeed, tentative forays into factory-direct sales of Amana majaps by Amazon backfired when major chains balked, and the e-tailer’s relatively paltry appliance pot in 2016 suggests a long runway for white-goods storefronts.
Reflecting the yin yang of the industry retailscape, this year’s combined Top 100 CE and appliance dealers ranking, representing well over 90 percent of the business, eked out a 2 percent increase in revenue year-over-year, putting the total take at $165.5 billion.
Not bad for a year’s work.