Buying Groups Guiding Dealers Through Trying Times

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NEW YORK –

It wasn’t too long ago that national bigbox chains were the biggest challenge for independent dealers.

Enter The Great Recession, which has lowered all boats and has now become the greatest threat to independentlyowned CE and appliance stores.

But just as before, buying groups – confederations of single- and multimarket dealers who pool their resources and share best practices – have come to the fore with new merchandising programs, new business opportunities, and the educational, marketing and backoffice support that can make the difference between success and succumbing in the current environment.

Among the industry’s leading buying organizations is the

Nationwide Marketing Group (NMG)

, which goes to extreme lengths to ensure the long-term health and survival of its members. Case in point: director of field sales and member services Ed Knodle, who ran his own business, Knodle’s Appliance and Electronics Center, in Sycamore, Ill.; served as sales director of Standard TV & Appliance in Portland, Ore.; and is a former executive director of the North American Retail Dealers Association (NARDA).

Knodle brings his extensive management background to bear as point man for an NMG retail SWAT team of sorts that swoops in and resuscitates troubled dealers by imposing basic business disciplines.

Knodle also teaches those principles at Nationwide’s triannual Masters Mentor Summit, along with Bryant Group principal Steve Bryant, and at the group’s first-ever Business and Leadership Management Conference, held last month in Dallas. The three-day conference was designed to teach dealers the fundamentals of running a business, and to ensure their continuity in the new marketplace, by presenting 15 courses on such topics as email and web marketing; merchandising; customer service; financial management; and strategic and succession planning.

“We brought in the very best in the industry including a pool of experts from Nationwide,” said Knodle, which included Bryant and member services director Elly Valas, herself a past president/CEO of NARDA.

Besides providing operational support,

BrandSource,

the industry’s largest buying organization, also assists dealers through the creation and development of a nationally- recognized brand to help spur traffic. The brainchild of CEO Bob Lawrence, BrandSource has been heavily promoted on home-related cable shows, was a sponsor of game shows like “Jeopardy” and “Wheel of Fortune,” and most recently signed on designer and former model Kathy Ireland as the group’s “brand ambassador.”

“BrandSource is the only industry-wide initiative that will help the independent reverse a 10-year trend and create awareness to help independents successfully compete today and in the future,” Lawrence told attendees at the group’s Spring Summit in February.

Meanwhile, BrandSource’s specialty A/V divisions,

Home Entertainment Source (HES)

and the recently added

Progressive Retailers Organization (PRO Group)

, are working together under the ProSource umbrella to help its members evolve with the industry and smoothly enter new connectivity-related categories like smartphones, tablet PCs and content delivery.

Members must become “integrators that sell A/V. Products that are commodities” – like HDTV – “are not the solution,” HES executive VP Jim Ristow told TWICE during the Summit. To help ease the transition, ProSource has developed a Connected Source turnkey display concept that allows members to show and demonstrate connected systems in their stores at little cost, he said.

Ristow’s PRO Group counterpart Dave Workman is continuing the discussion this week at PRO’s annual spring meeting in Dana Point, Calif.

Elsewhere,

Home Theater Specialists of America (HTSA)

, which celebrated its 15th anniversary at its own spring meeting last week at the Sheraton Wild Horse Pass in Chandler, Ariz., (see story, page 4) is pressing on with plans to expand group membership and sales volume. The goal: 70 members and $500 million in annual revenue to further raise HTSA’s profile with vendors.

Other recent initiatives for member A/V dealers, custom installers and system integrators include customized websites, provided through an optimized platform featuring new graphics, readily changeable skins and enhanced search-engine marketing. The group has also invested in e-commerce tools like Google AdWords, banner ads and keyword searches, and has positioned itself as an objective, unbiased authority on home technology through a targeted public relations campaign and how-to videos, hosted by training director David Berman, placed on YouTube and

www.htsa.com

.

The Internet is also the focus of a major initiative for

MEGA Group USA

. The 1,500-dealer furniture, majaps, CE and mattress buying organization recently introduced for its members WebFronts Premium, an affordable e-commerce program that represents a step up from MEGA’s basic online offering, first introduced in 2007. The new two-tier platform is highly customizable and offers virtually unlimited product catalog capabilities, advanced merchandising, price tools, an unlimited shopping cart, advanced search engine optimization techniques, an automated rebate center, and product comparison features.

MEGA Group president Rick Bellows said Web- Fronts Premium will give members a competitive advantage by providing access to 10,000 SKUs and uniquely accommodating each of the group’s for main product categories within a shopping cart. “We had to have an e-commerce site as good as any in the country, and spent a lot of time developing a premier web presence that will take a back seat to no one,” he said.

A group of a different feather is the

NATM Buying Corp.,

whose 11 major regional dealers are largely autonomous and often maintain their own programs with vendors. Nevertheless, NATM’s cumulative clout still provides competitive buying opportunities with core CE and appliance suppliers, and members relish the exchange of ideas and best practices.

To further bolster member dealers, NATM is considering new tactics including operational initiatives to reduce costs, and a direct-sourcing program to bring in accessories and other categories from China. The group has also extended its mix to gaming and PCs and, following several trials of an exhibition space at its annual meetings, will formally host its first one-day vendor fair at the next conclave in September.

Perhaps the most niche-oriented buying group is

In Car Experts,

or ICE, serving the 12-volt specialty dealer. With some 185 showrooms across 40 states and over $250 million in annual revenue, the group operates a consumer website featuring live expert chat and automated coupons that was designed to send pre-qualified customers to members’ stores. All members are also provided with a hosted website for their individual businesses that is updated weekly, plus access to a generic TV spot shot in full HD.

Also servicing 12-volt dealers is the

Mobile Electronics Specialists of America (MESA),

a 25-member group with 88 locations in 24 states. MESA was founded in November 2009 as a member-owned organization that provides dealers with fully produced TV commercials, radio advertising and printed material, as well as group VIR programs, pre-planned product buys with pre-produced marketing materials, and opportunity buys of vendor overstocks and closeouts. –

Additional reporting by Steve Smith

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