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NATM Dealers Duking It Out For Share


The NATM Buying Corp.’s 11 regional dealers
are growing market share in video and major appliances
despite the weak economy and fierce pricing
pressure from national and online accounts.

Members of the $6.7 billion buying group, which held
its annual conference at the Ritz-Carlton here last month,
say they are contending with macro and marketplace
headwinds by opening new stores, entering new categories,
tightly managing inventory, matching Internet pricing
when needed, and learning to live with lower margins.

As a result, said NATM president and executive director
Bill Trawick, the group is still outpacing the industry
in TV and majap unit volume despite comparable store
declines in both categories.

“Business is not robust but we’re gaining share in
the markets we play in and we’re out there aggressively
growing our business,” he said.

Indeed, at least four members — Boscov’s, Conn’s,
Electronic Express and Video Only — said they are opening,
re-opening or expanding stores, while others are entering
new businesses like mattresses, lawn and garden
or, for Abt Electronics, electric generators and fitness

To help dealers tap into new opportunities, NATM has
expanded its on-site vendor fair, which was first tried last
year, from 20 to 39 exhibitors. Categories included audio
(Harman International, Klipsch, Polk, Ion Audio and Soul
Electronics), video (Daewoo, JVC and TCL), and everything
from fireplaces to DJ stations, and Amazon-owned
deal-of-the-day site Woot to Warrantech.

To secure its place in the tablet and PC market, NATM
is leveraging its relationships with Samsung, Sony and
Toshiba, and welcomed vendor fair exhibitors Archos, D&H Distributing, Kingston, Lenovo and
Tech Data. Representatives from Dell,
Hewlett-Packard and New Age Electronics
were also in attendance.

Trawick said dealers are also getting
help from new MAP policies and stricter
enforcement by some CE and appliance
manufactures. The latter took steps to
eradicate extreme 25 percent- and 30
percent-off promotions on white goods
and, unlike their electronics counterparts,
are also raising prices on their products.
Whirlpool had signaled its intention to
impose a third round of cost increases
following industrywide hikes in the spring
and summer, while GE became the first
to formally announce a 5.5 percent increase
beginning in January. Most majap
manufacturers are expected to follow suit.

Still, the erosion of price points and
declining margin in TV remain “the toughest
things we continue to struggle with,”
Trawick said. “Both retailers and manufacturers
are struggling with earnings. We’re
burying ourselves.”

The buying group executive pressed
the point in an impassioned “State of
NATM” address to attendees, in which
he implored manufacturers to do more to
support the independent channel.

“You built relationships with us, and your
investments in companies like P.C. Richard
and Conn’s kept them competitive,”
he noted. “You helped them get where
they are, and we helped your company
get where it is. But how many relationships
can be built with national accounts?
If they’re not happy with a category, they
get out of it. We put our lives into selling
electronics and appliances, and if we’re
not successful, we close doors.

“Manufacturers are also fighting for
their lives. National accounts and Internet
companies are so big it’s hard to say no
to them, but based on their recent financials
the nationals are not winning, they’re
struggling, and so are you. We need you
to provide fair margins so we can exist,
and we need you to work with us to grow
your business profitably. You must not
let them dictate how you run your business
because if we continue in the direction
we’re now heading, this industry is

Trawick noted that despite the challenges,
and with the exception of nowdefunct
Bernie’s, “Our guys have hung in
there through three years of tough times.
We’re not losing share, even with competition
from the Internet, because a fair
amount of people want to buy local, they
want a knowledgeable sales person, and
they recognize value from our retailers.”

Looking ahead, Trawick foresees a
shorter promotional window for Black
Friday as manufacturers rein back their
timetables and at least two national retail
accounts “budget their business down.”
Nevertheless, he predicted that pricing will
be “extremely aggressive” in home office
and TV, particularly in plasma and smaller
displays, and that a possible decline in
holiday traffic due to the anemic economy
may be offset by higher average tickets.

On a personal note, Trawick indicated
that he is putting his retirement plans on
hold for “a few more years” until the business
climate improves.