Las Vegas — BrandSource laid out a multi-point program to help restore pricing and margins for its 4,000 members at the buying group’s Fall Convention & Expo here yesterday.
Some of the initiatives, like a service to help dealers foster positive online reviews, are new; others, like the group’s prescient SleepSource store-within-a-store bedding shops, predated today’s mattress mania and Best Buy’s new in-store shop strategy.
But citing price and margin deterioration as the biggest issue, BrandSource CEO Bob Lawrence, now in his 20th year at the helm, ticked off a litany of countermeasures in his opening address yesterday at Caesars Palace, and reminded attendees that the definition of insanity is doing the same thing over and over again and expecting different results.
To that end, Lawrence said the group will no longer support manufacturers and programs that emphasize low prices over profits. Aside from targeted promotional programs, “We will no longer be the poster child for manufacturers that want us to promote low-margin programs to you,” he said. “We will bring you profitable programs to make you money.”
However, to make that strategy work, dealers need to act like a group and support those programs, which would put BrandSource on equal footing with big-box chains that can execute across hundreds of stores. “You don’t have to work in lockstep, but you have to work together,” he implored group members. “If you want to see margins go up, you have to take ownership.”
Lawrence also urged dealers to take advantage of the myriad tools offered by the group to help dealers compete in-store and online, including a new zero-percent financing program and $50 gift card incentive slated for October; the new Expert Review online review service; and BrandSource’s traffic-driving mobile app.
TV and appliance dealers should also take a cue from the startling turnaround at multiregional chain Conn’s, Lawrence said, which reversed its fortunes by expanding its assortment. For BrandSource dealers, turnkey programs like Shelf Source for cabinet remodeling and Outdoor Source for outdoor grills and other patio products provide easy entrée to high margin categories, he said.
Looking ahead, Lawrence predicted a coming resurgence for independent dealers based on a ten-year boom-and-bust cycle tracked by GE over the past half-century, and the twilight of big-box retailing, as cited by the Consumer Electronics Association (CEA) and TWICE market research partner The Stevenson Company.
“It’s never been a better time for independents,” Lawrence said.