NEW YORK — As part of the TWICE Distributor Report in our last issue (see TWICE, June 7, p. 30) Petra Industries’ president/CEO Bill Stewart was also questioned about some key industry issues.
Unfortunately, his responses arrived right after our deadline. Here are Stewart’s views on four industry issues, including his opinion on Walmart’s new strategy for CE (see TWICE, June 7, p. 1).
Pricing reportedly has stabilized in several categories. Why?
I think retailers are realizing that consumers are feeling more confi dent in the state of the economy and are opening up their wallets again. Getting the lowest of the low prices isn’t the number one priority, which means that retailers can make better margins on their lineup.
However, retailers need to make price adjustments gradually and continue focusing on good marketing and great service to keep their customers coming back. I think there is still some volatility in the rawmaterial costs for manufacturers, so we could still see some pricing spikes, but overall I think prices will remain pretty stable through the second half of the year.
Retailers have been complaining about spot shortages in HDTV and other categories.
Panel and spot shortages have been pretty common the last few years. Manufacturers have reduced their inventory levels in some areas, but we remain hopeful that they will ramp up production as the fourth quarter draws near. To help with these problems, we work closely with our customers and our manufacturers to provide accurate forecasting that allow us to keep the right products on hand so retailers can count on us for just-in-time inventory and we can maintain our 99.8 percent fill rate as we approach peak season.
Home audio has quietly been making a comeback, and consumers are increasingly using accessories to upgrade their hardware. How are those two categories performing for you?
Accessories are the real backbone of our product mix, and we have seen an increase in our accessory business across the board, home theater included.
An upgrade in existing hardware for the consumer means high-margin add-on opportunities for the dealer, so we continue to stress to our dealers the importance of educating consumers on how easy it is to extend the value of their investment by simple things like the right cables, power protection, mounting solutions and so forth.
Our sales are up for the year across the board — specific product groups that are doing really well are A/V mounts, iPod/iPhone/iPad accessories, netbook and laptop accessories, portable audio and headphones, and the state appliance- rebate programs have boosted our appliance hookup supplies quite a bit.
How will Walmart’s renewed emphasis on CE products affect business?
Walmart will continue to have a big impact in the CE marketplace, but that doesn’t mean that our dealers can’t compete. Petra dealers have an advantage because we focus heavily on providing unique profit solutions so they can remain competitive in today’s marketplace. We work with dealers to be proactive in setting up strategic product models, kits and accessory bundles that are specific to them.
Ultimately, our dealers are very customer- centric — they have the huge advantage of being on the floor getting customer feedback every day. The combination of that feedback and the flexibility to change a product mix quickly based on customer requests has always been our dealers’ key to success against a large competitor.