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Lawrence Shares Advice, Remembrances At Last BrandSource Show As CEO

LAS VEGAS — It was a bittersweet BrandSource convention last month at Caesars Palace, where Bob Lawrence helmed his last show as the buying group’s CEO.

Lawrence, a former Maytag manager, took charge over 20 years ago, helping to transform the organization from a fledgling buying co-op into a $13 billion CE, appliance and home furnishings powerhouse with some 4,500 members.

A cadre of BrandSource officers and executives past and present kicked off the show’s general session with a surprise salute to Lawrence, who was joined on stage by his wife Judy.

A successor is expected to be named in October, and Lawrence will formally step down at year’s end, after which he hopes to continue in narrower role, perhaps guiding the group’s distribution or finance programs.

In an emotional farewell address to his dealers, Lawrence cited the creation of the BrandSource co-brand and in-house Expert Warehouse distribution network among his top accomplishments, and admonished members to embrace mobile commerce – and the digital tools the group is providing them – which he described as “the future” of retail.

Indeed, mobile devices will become ubiquitous “personal shoppers,” he said, as apps, in concert with Bluetooth beacons, transmit personalized offers to in-store customers, who can then complete the purchase themselves on their tablets and smartphones.

Lawrence also acknowledged the tough retail environment, noting that total group sales volume is flat to last year, and that majap industry shipments have fallen from a high of 45 million units in 2007 to the current upper 30s.

“We still have a ways to go,” he said. “This industry has still not recovered from The Great Recession, and it has been a stress on you and your families.”

The good news, he said, is that Brand- Source is outpacing the industry in sales of furniture, bedding, audio and appliances (it’s on par in TV), while still garnering the highest average selling prices (ASPs) across most of retail.

“BrandSource delivers profit to manufacturers, which is why we’ll always be important to vendors,” he said.

The group’s product mix is currently 50 percent CE, 40 percent appliances and 10 percent furniture, with the addition of PRO Group (since merged with HES into ProSource) tipping the balance in favor of electronics.

Lawrence also cited an A.T. Kearney study showing that 90 percent of shoppers across all ages and incomes prefer to buy in brick-and-mortar stores, while other reports point to the dissolution of the big-box format.

Looking ahead, Lawrence offered a cautious view of Holiday 2014, predicting that business will be just “okay,” and will only “tick up” in the fourth quarter. Broken out by category, appliances executive VP John White forecasted low single-digit comp sales increases for the November-December period as a “best-case” scenario, citing restrained Labor Day orders, a soft laundry market, and the migration of the mass premium tier to a mass market segment as “the middle class continues to disappear.”

White’s advice to dealers: “Focus on improving the customer experience. It’s not the same as customer service, and people will pay more to experience something special in the showroom.”

On the CE side, ProSource co-president and chief business officer Jim Ristow predicted “good” holiday sales, albeit driven by deep discounts as “vendors will get very promotional.”

Indeed, prices on some Ultra HD TV models have already fallen as much as 40 percent over the past three months, he said, and the new affordability will help BrandSource dealers sell more 4K sets between now and year’s end than they have since the technology was first introduced – while still realizing higher ASPs overall.

“We’re still very bullish on 4K for this year,” Ristow noted.

Not yet ready for primetime, however – at least among the rank-and-file TV-and-appliance dealers – are more esoteric technologies like home automation and wireless multi-room audio. “The vendors are just starting to ship some of the Sonos competitors, and it’s going to take months to get them seated,” he said.

Conversely, business for custom installers and integrators is going gangbusters, Ristow said, with demand for new audio technologies “through the roof.” The biggest issue for these ProSource members: “Finding enough people to hire, the business is so strong and so good right now.”