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Buying Groups Providing Fresh Ammo For Independents

NEW YORK — As the nation
begins to recover from the deepest
recession in memory,
the industry’s buying
groups are helping their
members dust off the
past year and reposition
themselves for a changing

New programs and initiatives,
including price promotions,
product bundles, rebate
solutions and turnkey entrées to
the promising whole-home control
market, are designed to help
independent dealers stay ahead
of the curve and compete
more effectively
against national chains
and e-tailers.

The following is an
overview of the most
recent efforts by the largest CE
and majap groups on behalf of
their members.


The industry’s
largest CE, majaps and
home-furnishings buying group,
with 4,500 members and $14 billion
in annual sales, is focused on
what it said are the biggest hurdles
facing independent dealers today:
instant rebates, inventory management
and brand recognition.

To address the former, the
group recently launched an instant-
rebate portal that allows
members to consolidate their
claims and reduces payment
time from two to three months to 15 days. Accessible through the Brand-
Source dealer site, the portal will soon
accept instant rebates from major appliance
manufacturers in addition to electronics

On the inventory front, the group’s
Expert Warehouse distribution
program, operated by partially
owned ArchBrook Laguna, allows
members to order truckloads
of mixed merchandise as
needed, which helps lower their
overhead and increase their turns. The
program is nearing $1 billion in sales,
group executives said, and has begun
adding major appliances to the mix for
the first time.

AVB, through its BrandSource marketing
effort, has been a longtime proponent
of a single, go-to-market brand
strategy that would help its members
collectively compete with big-box chains.
Only half of the group’s dealers participate
in the program, which includes store
signage, local and national advertising
and a consumer site
that refers shoppers to nearby members.

Apart from its regional divisions, AVB’s
major affiliates include

Resource Plus

, the
former MARTA Cooperative of America
buying group comprised of larger independents,
led by managing director and
general manager Robert Thompson, and

Home Entertainment Source (HES)

, the
group’s specialty electronics branch. HES,
like its strategic partner The PRO Group,
is advising its 475 members to morph into
system integrators that can provide A/V,
gaming, IP, IT, and home-control products
and services as margins continue to
erode within the group’s core A/V categories.

Home Technology Specialists of
America (HTSA):

The $450 million buying
group for system integrators has 60
members with some 100 storefronts located
throughout 37 states. The
group recently changed the second word
of its name from “Theater” to “Technology”
to better reflect its membership, which
designs and installs high-end audio, video,
automation, lighting and climate systems
for an u-market clientele, and has more
than 800 installers in the field.

To survive the recession, members have
cut costs through staff and inventory reductions,
and have focused on new categories
like high-performance networking
and LED lighting fixtures that helped
supplant slower sales.

Recent group initiatives include a new
search engine-optimized Web site template
for use by HTSA members.

More recently, the group added its 60th member, Dallas Sight and Sound, a system
designer and integrator started in
1984 by David Rogers, a founding member
of CEDIA. On the manufacturer side,
Dana Innovations joined the HTSA vendor
roster with its Sonance, Trufig and
iPort family of brands.

Progressive Retailers Organization
(PRO Group):

Likes its strategic partner
HES, the specialty A/V buying group is
exploring new margin opportunities
in control automation, energy
management, subscription
services, mobility devices, and
even gaming and IT, as its traditional
A/V categories continue
to commoditize.

Indeed, margin declines, instant rebates
and the extended recession took a
toll on the channel and the group as longtime
members Anderson’s and MyerEmco
closed shop and Ken Crane’s downsized,
prompting the PRO-HES “Alliance” to
also consider direct-sourcing opportunities
and private-label programs.

The move toward system integration
and turnkey solutions was ref lected in
the addition this month of custom-install
supplier SpeakerCraft,
which brings to three the number of custom
suppliers in PRO. Other recent initiatives
include a redesigned Web site at

, while on the member
front PRO recently added its 19th dealer,
former HES president Bob Cole of
World Wide Stereo in Philadelphia, and
Paul’s TV announced plans for a national
presence through in-store CE shops located
within regional furniture chains.

NATM Buying Corp.:

The group,
which caters to regional big-box CE and
majap chains, quickly recovered from the
loss of its bankrupt New England dealer
Bernie’s by re-enlisting former members
Abt Electronics and P.C. Richard & Son,
two of the industry’s largest independent
operations. The additions, effective last
month, gave NATM a $2 billion shot in
the arm that increases its clout with manufacturers
and fortifies its marketplace
position against national chains.

To help its members compete more effectively
in the low-margin, promotiondriven
marketplace, the group continues
to make opportunistic buys of inventory
overhang and is turning to non-traditional
categories like home office, accessories
and home audio. Indeed, new
core suppliers include Cyber Acoustics,
Dual, Hewlett-Packard, Lexmark and
distributor New Age Electronics, while
other contenders such as Audiovox, Ingram-
Micro, Monster, Omnimount, Sanus,
Scosche and Solo are also vying for
NATM’s business alongside the major
TV and appliance manufacturers.

Nationwide Marketing Group (NMG):

Despite some attrition during the depths
of the recession, the $12 billion NMG had
a net gain of 71 new members last year,
bringing its roster to approximately 3,000
dealers. To help them compete as the economy
recovers, the group is focusing on three
core initiatives this year: the Internet, digital
signage and promotional programs.

The former includes an improved Nationwide
e-commerce site,

www.Brands, which offers good-better-best
design options for dealers looking to customize
their Web pages. The group’s backroom
Intranet site was fortified as well;
there, dealers can access the group’s inhouse
promotional videos and find Webinars
on such topics as Internet strategies.

The video clips, along with movie trailers,
training programs, HD demo footage
and customized TV spots, can also
be accessed through Nationwide’s MemberNet
TV service. The gateway device is
an Apple-based box, priced between $500
and $600 and often subsidized by vendors,
that brings in the proprietary content
from the Web. Dealers can feed the
videos to their TV walls or to individual
monitors mounted in kiosks which can be
used to greet customers.

The group has also developed a full
promotional calendar with its vendors,
which includes exclusive programs, incentive
offers and buy-in opportunities, and
plans to leverage its 2010 Excellence in
Appliance Retailing Energy Star Award
from the U.S. Environmental Protection
Agency in its marketing collateral.

Apart from its regional chapters, key
affiliates include the self-warehousing

NECO Alliance

in the Northeast, and the
460-member custom-install

Electronics Nationwide

division (SEN).
The latter is particularly well-positioned
to capitalize on new opportunities in
connectivity, energy management and
whole-home control, and is pressing its
advantage by providing free Imaging Science
Foundation (ISF) training and CEDIA-
sponsored seminars during NMG
conventions. Another recent initiative is
the creation of home-theater furniture
bundles that are available to members
through the group’s warehousing program.

Other CE and majap buying organizations

Mega Group USA/Best
Brands Plus

, the Germantown, Tenn.-
based collective of independent furniture
dealers, and, within the 12-volt

In-Car Experts (ICE)


Electronics Specialists of America

. The four-year-old ICE, run
by executive director Rob Elliot in Pedricktown,
N.J., boasts some 240 storefronts
and $280 million in sales, while
the 50-member MESA was founded
six months ago in Northfield, N.J., ago
as a dealer-owned marketing and selling