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Nationwide Dealers In Expansion Mode

LAS VEGAS — Members of the $12-billion Nationwide Marketing Group (NMG) are using the recession to their advantage by opening new stores and leveraging group initiatives to position themselves for the eventual economic recovery.

That was a key takeaway from the group’s biannual PrimeTime buying show and conference, held here last week at the MGM Grand, where the mood was anything but down.

“Self-confidence is up, members are opening new stores in new markets, and people are upbeat,” said Ed Kelly, president of the 3,000- member organization.

“This is a great time to expand,” added Robert Weisner, the group’s member services executive VP. “Dealers are picking up real estate from closed chains and are buying out competitors. You’d expect this from our Top 200 largest dealers, but smaller dealers are too.”

Kelly said the expansion underscores the need for independent dealers to lead, rather than react to strategies by national bigbox chains. “Let’s not be in a reactionary mode,” he said. “The big- box chains don’t plan against local independents — they compete against each other. We’re not on their radar screen. So lead — watch where you spend your media funds, and use the advantages of being an independent, like your shorter reaction time to change.”

Dealer optimism was reflected in the show’s attendance, which was the secondhighest in Nationwide history, the group reported. Enthusiasm was also expressed by the rank-and-fi le, some of whom seemingly side-stepped the recession. “2009 was the best year in our 28-year history,” said Doug Spotts of Doug Spotts Appliance in Hughesville, Pa. “I started my business in a recession and have been through several since. When times are tough, people will give up their vacations, but they’re always going to need a refrigerator.”

And Kerry Maupin, principal of Western True Value in Alamogordo, N.M., which sells appliances, TVs and auto supplies, reported a good December and a “very strong” February following a softer month in January.
Still, not all Nationwide dealers made it to the new year. Between 40 and 50 members sold their businesses, some retired, and others fell victim to the recession, Weisner said, and the fallout is likely to continue. However, the addition of several hundred new members in 2009 offset the attrition, giving Nationwide a net gain of about 71 new dealers.

Group sales were also challenged in 2009, refl ecting price compression in electronics and the three-year-long malaise in majaps. CE sales were up 23 percent in units but down 8 percent in dollars, executives said, while unit sales of appliances fell 8 percent, which still bettered the industry’s 8.7-percent downturn.
To help fuel growth in 2010, Nationwide touted three core initiatives at the show, which was themed “New Days, New Ways: Get Ready:” the Internet, digital signage, and promotional programs. The former includes an improved Nationwide e-commerce site, BrandsDirect. com, which offers good-better-best design options for dealers looking to customize their company’s pages.

The group’s backroom Intranet site was fortified as well, said finance and operations executive VP Les Kirk, where Nationwide recently ran 10 Webinars on Internet strategies and dealers can access the group’s inhouse promotional videos. “We’re creating lots of assets for it,” Kirk said.

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 using proprietary software that brings in the 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 or promote specifi c brands or products. Dealers can control the feeds remotely, and can choose from some 2,000 different clips, explained Steve Bryant, principal of The Bryant Group, Nationwide’s video production house.

The boxes have recently been re-engineered to bring their price down to between $500 and $600 per unit, and some vendors have been offering them to dealers for $99 or free in subsidized promotions. There are currently 1,000 boxes in place across the country, Weisner said, and his goal is to hit 5,000.

The group has also developed a full promotional calendar with its vendors, which includes exclusive programs, incentive offers and buy-in opportunities, explained appliance merchandising VP Rick Weinberg. Nationwide will also leverage its justannounced 2010 Excellence in Appliance Retailing Energy Star Award from the U.S. Environmental Protection Agency in its marketing collateral, and will continue to out-execute competitors when it comes to juggling the myriad promotional offers and rebates from vendors, local utilities and the U.S. Department of Energy (DOE), said Adam Thomas, appliance merchandising senior VP.

Indeed, the group’s Northeast division, the NECO Alliance, generated “Black Friday-like traffic” in New York when the DOE’s appliance stimulus program was launched there last month, Thomas said.

Nationwide has also created a rental/ leasing program for dealers through a partnership with Rent-A-Center, the national rent-to-own chain, which gives recession- squeezed consumers another way to bring home new appliances, electronics or furniture. The program has been especially well-received by Big Sandy Superstore, the Kentucky, Ohio and West Virginia furniture chain, which tested it in three stores and will roll it out to all 18, Weisner said.

Taken together, the initiatives and store expansions will position Nationwide dealers well for the economic recovery, Weisner noted, which could still be another 24 to 36 months away based on GE forecasts. “We expect great things when business returns,” he said.

Nationwide’s next PrimeTime event will be held Aug. 15-18 at the Gaylord National Resort in National Harbor, Md., just outside Washington.