Nationwide’s senior management team carved out time during its hectic four-day run at Nashville’s Gaylord Opryland Resort & Convention Center last week to share its state-of-the-industry view. Here are some key takeaways:
CE and TV: Nationwide is having a “really good year” in CE — up by the high-single digits in the first half — and 4K and OLED TV have been key drivers, said Tom Hickman, electronics and distribution executive VP.
Indeed, premium UHD will likely comprise 80-95 percent of the video mix by next year, with OLED and SUHD providing a 30-percent higher premium over standard UHD. “We’re moving away from LED very quickly,” he said.
Between that and the advent of the connected home, “It’s a fantastic time to be in the CE business,” Hickman added. “ASPs [average selling prices] are staying high, the margins are there, and most vendors are sticking to pricing policies.”
Major appliances: Industrywide, retail unit shipments were up about 3.5 percent in the second quarter, while Nationwide was “over-indexed” with nearly 5.2 percent growth, noted appliances senior VP Patrick Maloney. While the majap exec is concerned about a recent 3-3.5 percent drop in ASPs industrywide, due perhaps to extended promotional periods, he said the independent channel is winning in white-goods, taking first place in industry market share in Q2.
Going forward, Maloney — and newly hired Whirlpool vet John Lang, who will honcho new business development — will continue to preach narrower assortments of profitable SKUs; leveraging the group’s Prepare For Share local merchandising strategies; and tapping into the $4 billion opportunity that is outdoors.
Virtual reality: “We’re very, very interested in VR,” acknowledged member services executive VP Frank Sandtner. “There’s a big play here.”
Nationwide is examining the technology from an in-store angle — using augmented reality to drive foot traffic and present an “endless aisle” of line extensions — and also as an online adjunct.
Business conditions: Business is fair, said chief commercial officer Jeff Knock, but it varies by product category and geographic region. Many economic indicators have slowed, but the trend is positive and member dealers are optimistic. “We have great plans for Labor Day, and are barreling through the summer,” he said.
But those dealers that have utilized the Prepare For Share program have enjoyed a 170 basis point increase in profitability since February and a four- to fivefold increase in sales growth, Knock noted.
CEO Dave Bilas added that while the industry is coming out of a low point, it hasn’t seen the sales lift that came with past election-year cycles. Nonetheless, Nationwide dealers, with their assisted selling floors and merchandising tools, still achieve average selling prices that are $195 over the industry average in TV, and still lead in OLED mix.