ORLANDO, FLA. –
Unilateral pricing programs, improved channel management by vendors, new TV technology, and opportunities with tablets and other categories and a weakened Sears all provide Nationwide Marketing Group members with hope for its CE fortunes in 2012.
Those are some of the issues discussed by Robert Weisner, CEO, during a press conference, and with Doug Schatz, CE marketing VP, and Jeannette Howe, executive director of Specialty Electronics Nationwide (SEN), during one-on-one meetings with TWICE at Nationwide’s PrimeTime! meeting, here.
Schatz said that while the implementation of the new unilateral pricing programs being set by Panasonic, Samsung and Sony, and channel-management programs by LG and others, will be critical to the health of the CE industry, “the new model in place to build to forecast vs. build to sell” is just as important. Building to forecast will keep inventories in control and limit profit erosion.
Schatz said Nationwide supports the new unilateral pricing policies to improve profits for all and said that channel-management changes enables Nationwide members to “sell value-added products, smart TV, 3D, voice and gesture based controls, [since they] require a selling floor. Our view is we are part of the solution.”
Schatz said Nationwide “believes in channel management” if top-tier vendors “put the right products in the right channels.”
Weisner said several top-tier CE brands “have similar plans to accomplish the same goal. Most have some enforcement involved. If you add up the numbers” in losses, especially in TV, “they have been told to change their business model.”
Schatz added that while the industry has been through many “false starts” on such programs, Shatz has a “cautious optimism” about these new plans.
Schatz is seeing a shift towards profitability versus market share now since profits are at a premium and it is “time to look within business and shift more profits” vs. just volume.
In tablets and computers, Nationwide is looking to create “the right vendor relationships,” and Shatz said it has those with Acer, Hewlett-Packard, Lenovo and Toshiba.
When it comes to gaming, computers, tablets and digital imaging, there are “lower profits but quicker cycles” that Nationwide members have to get used to as they attempt to improve traffic and attract “younger customers… who will buy TVs, improved audio systems” and these other CE categories.
Another way to attract younger consumers is “using social media to deal with shoppers armed with a smartphone. We have been training our members at PrimeTime! on how to win in a multichannel environment and show how you can move from being a brickand- mortar retailer to include web sales … without hurting profitability.”
Howe said SEN is “encouraged” by the new policies and added that its members can “sell more over-50- inch TVs and sell attachments — 5.1 audio systems — because we can demonstrate them.”
She maintained that new technology in CE has recently become commodities “before it comes to the market. [The industry] needs independents to show technology and explain how it works. How do you buy 3D at Amazon? You need to demonstrate it to sell 3D successfully. That’s why [consumers] haven’t had good experience with 3D.”
Schatz said that a lot of SEN members have been successful in selling connected home products due to the “belief” that sales involving “higher labor components … equals profitability. Networking a Toshiba TV and tablet to home lighting controls with automation excites us and our membership. It shows our training and knowledge of the technology.”
And as for the effect of Sears closing locations, Shatz said, “It benefits our membership. Our members have a directed sales floor … and anytime you have a retailer that is vulnerable, there should be some customer shift. We can provide a growth area [for CE vendors], we can demonstrate 50-inch and over TVs for instance, which is a sweet spot for us and vendors.”