Nationwide Reaps Benefits of ‘Prepare for Share’
Two and a half years into the lifespan of its Prepare for Share retail brand-building strategic initiative, the Nationwide Marketing Group, which held its 50th PrimeTime! meeting and buying fest March 19-21, in New Orleans, said its members – independent dealers in a retail landscape of struggling behemoths like Sears and hhgregg – are ideally positioned to capitalize on its execution. Said Dave Bilas, Nationwide’s CEO and president, “In light of these retailers evacuating a number of markets, the Prepare for Share program was very insightful. Our retailers are now prepared to serve those customers better than a Lowe’s or [Home] Depot.”
That all-encompassing program was launched in 2015 and designed to improve the in-store experience, increase customers’ frequency of visits and help members to ramp up a 360-degree approach to promotion that includes customer engagement in multiple media forms. In a retail atmosphere rife with “big-box chaos,” as Jeff Knock, chief commercial officer (CCO), characterized it, “this show is a breakaway; now’s our time. We are maneuvering through all that noise and doing our thing.”
This PrimeTime! edition drew 3,400 people representing more than 900 stores, as well as 200 vendors who exhibited their wares on a 200,000-square-foot floor; dealer attendance, Knock said, was up 24 percent over the March 2016 Orlando show. The group represents $15 billion in buying power.
And of 540 new members who’ve signed on in the last year – predominantly from the furniture/bedding retail space – Bilas said that the lion’s share “were unaffiliated before” with a buying group.
Bilas projected overall that, for Nationwide members, “the year should be up three to five percent in units – a nice lift.” He added that appliances, a category he said constitutes “over 50 percent of [our] business in dollars,” is “going well; the housing market is helping. And the store closures by Sears and hhgregg are helping in some markets. The electronics category is bullish, despite price degradation. The 2017 outlook, I think, is very good; we have momentum.” In terms of dollars, he added, while electronics are subject to the usual pricing declines that go with the category, appliance pricing remains “pretty stable,” with dealers seeing an uptick in both areas in sales of premium products. “We’re looking at frequency of shop – getting customers in more times per year” – with the ideal being each two to three months, Bilas said.
Bill Bazemore, senior vice president of furniture and bedding, reported that members’ furniture and bedding business was “very, very strong – especially bedding; there are opportunities for a huge push.” He spoke of an enhanced approach being taken with Nationwide’s Sleep Retreat compact gallery – a 600-foot turnkey solution developed with Serta Simmons Bedding whose recommended location is now on the electronics/appliance side of a showroom floor instead of near the furniture area.
Meeting Profitability Challenges
Helping dealers meet profitability challenges remains a challenge and a continuing concern, said Knock. “The holidays are getting longer and deeper [every year] so we need to focus on the right products and the right plans,” and on the periods between holidays. Bilas added, “75,000 appliances fail every day. Consumers won’t wait till Memorial Day to replace them.” He said that anywhere from 33 to 37 percent of business is centered around seven major annual holidays. “That means that 60 percent is not; that’s the business we’re after.”
Signs that the right plans are taking root among the membership include the doubling of participation since the March 2016 show in Nationwide’s Learning Academy, which evolved three years ago from PrimeTime! University.
Moves into “right” product categories have meant a concerted drive to add vendors serving the outdoor lifestyle space. A seven-vendor “Voodoo and Barbecue” outdoor event was staged here to entice members’ interest in what Knock called the “heating/seating/eating” arena. “This is getting to be a mainstream category – and in some areas of the country, it isn’t even seasonal any more,” Bilas observed. It also encompasses outdoor electronics like speakers. “We’re constantly looking to transport the kitchen living experience outside,” said Tom Hickman, executive vice president for consumer electronics, “and that includes lifestyle electronics vendors.” He expanded upon what he sees as the natural synergy between today’s electronics, appliances and the technologies that bind them closely, saying, “The connected-home Trojan horse might just be through the kitchen – but the experience has to be sold, taught and serviced.”
Quick Takes on Performance, Programs
Nationwide’s individual category managers provided some quick takes on their areas’ performance:
Hickman touted the newly announced alliance with Nest – to date, Nationwide is the only buying group to work with Nest – which provides access to that brand’s connected-home product portfolio as well as opening opportunities for dealers to promote “Works with Nest” products to those same consumers. Hickman said the CE category was up 20 percent in dollars in 2016 over the previous year, driven by the widespread availability of advanced display technologies in higher-ticket, premium-level TVs. “We’re pleased with our distributed audio business – [Dolby] Atmos pieces and connected devices – and our attachment rates doubled over the past year,” he said. He also alluded to the success of the Connected Home kiosk first deployed at the last show as contributing to “encouraging an install environment and creating a CES-like experience for our guys who don’t go to CES. It gives them reasons to cross categories, to promote frequency of shop, and it should bring in a younger, more connected consumer.”
Patrick Maloney, senior vice president, appliances, reported that the group’s appliance unit sales should track upwards at about the same rate as in 2016: in the three-to-five-percent range. He observed that the challenge is in the channel shifts that are happening. “Sears still sells a great mix of products; we’re working on how to make that happen in our stores.” Maloney said that “our purchases are up double in units versus the industry’s,” and that challenges remain in fluctuating ASP values. This is being alleviated somewhat, since the group’s top appliance suppliers are providing more “everyday low pricing, giving our guys better line of sight on what to purchase. But our ASPs continue strong, plus-$300 above the industry.”
Nationwide’s Sales Comparison Tool point-of-sale data system, based on aggregate and anonymous POS data, is also “getting traction,” said Maloney. “It gives us tools with our manufacturing partners so they can see what’s happening through the whole year. Nowhere else in the independent space does this exist.” It also provides a unique snapshot on super-premium product sales, he said. Knock added that “it helps us know where our ROI is, to better target marketing dollars.”
Frank Sandtner, executive vice president, member services, said the Sales Comparison Tool only applies to the appliances sector for now, but will be expanded to include the bedding category.
Sandtner also said that Nationwide would further broaden its online dealer marketing-support programs, which have morphed since 2012 from web services, to packaged services in 2014, to email services last year, and now, to incorporate a content marketing aspect with a particular focus on video. “We have a core competency in it, and video consumption on the Internet has skyrocketed,” he said. The expansion will encompass creating video assets for use in multiple channels – for example, product videos viewable on dealer web sites.
An increase in emphasis on financial services was manifested at this PrimeTime! as well; a financial services “report card” was offered at the show to help dealers evaluate and optimize their use of consumer financing programs.
Sandtner said another aspect of the educational angle being promoted at the show touched upon store reviews, and getting retailers to capitalize on opportunities presented by tools such as Facebook Live to reach reviewers with live videos. Also introduced was a leasing option for Nationwide’s digital store labels program.