BrandSource’s executive director Bob Lawrence and Jim Ristow, general manager of its audio/video division Home Entertainment Source (HES), discussed a variety of industry issues with TWICE that we didn’t have the opportunity to publish when we covered the buying group’s National Convention and Buy Fair, held here recently (TWICE, Sept. 6, p. 3).
Here is a brief Q&A with both men, first Ristow and then Lawrence:
TWICE:Are you planning to “brand” your HES members as BrandSource does with its members?
Ristow: The BrandSource business model has been wildly successful. We see co-branding as a possibility for HES members.
Speaking of brands, will we see an HES-branded line of some type in the future?
Ristow: We are aggressively looking at that and will be making an announcement in the near future.
Are you expecting shortages in flat-screen TVs during the fourth quarter?
Ristow:We expect some shortages, but not as bad as last year. As an organization we have placed our orders and received commitments from key suppliers. In addition there will be more players in hot categories and that will loosen inventories. We don’t see dramatic erosion of prices or margins in flat-panel TVs.
What is the biggest challenge, or concern, of your membership?
Ristow:HES is not as seasonal as regular retailers. Our biggest challenge is getting footprints in the door. We will sell you if we get you into the store, but we have to get you inside.
How was business for BrandSource this summer?
Lawrence:Business has been fairly good. We are doing exceptionally well in kitchen packages, especially with stainless-steel product, and are seeing a lot of high-end sales. In electronics, DLP sales have been strong. Really in CE or majaps, the move is toward the higher end.
What is your outlook for the fourth quarter?
Lawrence: I can’t wait until the presidential election is over. The anxiety over it could be affecting sales now. Pent-up demand could be released after the election and we should have a good fourth quarter.
The room air-conditioning business was hurt badly by cool summer weather this year. How did that affect your members?
Lawrence: Well, there is a lot of [inventory] carryover, but we were able to sell a lot of other things. We don’t have to have ACs to have incremental sales. But over the long term [independent retailers] have given up on a lot of commodity products like VCRs, microwave ovens, 5,000-, 7,000-, 8,000 Btu air conditioners, and others. How many categories can independents give up to the big boxes before it hurts us?
How many members use “BrandSource” outdoor signage now?
Lawrence: About half of our 1,600-plus members use it, which is good when you consider the expense to change signage, the fact that in certain areas there are certain municipal codes, and other factors. Our biggest concern is when consumers look for our dealer and tell us they “can’t find the store” because they are looking for a BrandSource sign and that particular dealer doesn’t use it.
What are your biggest concerns going forward?
Lawrence:Our members closing their businesses, not due to bankruptcy, but to retire. The children may not want the business, or can afford to take it over. Whatever the reason, we lose market share, the independent [channel] as a whole loses market share.
The question is, are we losing market share to the big boxes or are we just handing it to them? The biggest challenge is to get young people interested in independent retailing. But some kids see the hard work and hours their parents put in. It is a problem of succession.