15 Minutes with Nationwide President Tom Hickman
At buying group Nationwide’s August PrimeTime show, Nationwide President Tom Hickman reflected on the progress of the amalgamation of the Nationwide and MEGA Group memberships since their merger last October.
Dealerscope: So this is the second Nationwide PrimeTime event since the merger, with the first show with the combined groups having been in February. Talk about goals set and goals met – are you where you expected to be?
Hickman: With the acquisition, it’s people, process, front end, back end. It’s about being seamless to the membership. We had two wildly proficient organizations, several thousand dealers in both groups, so we had to get people and process right.
Our goal was to make sure that MEGA members coming in felt welcome, and we kept the things that were important to them – and that our dealer members [were OK]. We really did this for scale, because we don’t look at ourselves as competing inside the independent channel; we’re competing against multi-national, big-box and sometimes global companies, so that was our goal, and I think we accomplished that, first and foremost.
Our other goal was to double down on the investment in the channel. You see in mergers, sometimes, where people exit; we didn’t do that. The entire MEGA leadership team was rolled into ours. We believe in diversity of thought, so we brought those guys in. And just as importantly, in the field, we didn’t reduce headcount by one person – which we absolutely could have. In fact, we opened up headcounts to better serve our members. We wanted to prove our investment into the channel – and I think we have, in people and process.
In terms of numbers, it allows us to do some unique things with our partners at Wells Fargo and Synchrony. And if you look at our business with Whirlpool, it becomes incredibly relevant and important. So extending those programs across both memberships is really important.
MEGA was making significant investment and getting proficient digitally; we were making significant investments. So now, we’ve rolled those two investments together, and it’s a massive opportunity for us to leverage that across the membership.
I look at the results, and talked to a lot of members, and I think we’ve got it. In terms of execution and how the membership feels, and in integrating the two teams, I’m very happy with where we are.
DS: Have you tweaked things to address MEGA members’ most pressing needs – and were their needs a little different from Nationwide members’ most pressing needs?
Hickman: Certainly, their DNA is a little different. So we’re constantly tweaking our model. Specifically to MEGA, Palooza (the multi-vendor multi-deal buying event now held at PrimeTime) was from that team; they called it MEGA Madness, I believe. We had never done that. They said, this really works for us, and we think it’ll work for your members. We were skeptical, but kudos for us for being open-minded to give it a shot. And it’s just been incredible.
Typically, their DNA is less electronics than ours, and heavier into furniture and bedding, which was one of the other reasons why we did the merger, because of their best practices in that category. So we certainly intend to expand electronics into their offering, and try to get those members on board. And we’ve had some success. Of course, they had a fantastic appliance business. Ours was larger, so we’ll continue to drive appliances deeper into their membership. And you’ll see some of the tweaks around bedding and furniture, [meaning] resources dedicated to it, from our side.
DS: Are there any emerging categories you’re not addressing with the group?
Hickman: I hope not! I think the concept is to maximize what we’re doing now and then introducing things – you heard at our press conference about the flooring initiative. That’s a perfect example of an opportunity sitting there, very close to our business. So if we can partner with a world-class organization and create a blueprint and a map for our guys to get in that business, that’s what we’re going to do. There are vertical opportunities there, and there may be others. We talked about it [at the press conference]: things like HVAC or plumbing… We have to be excellent at our core categories, but we’re always looking to expand.
Very few of our dealers started as appliance dealers. We have many that are fourth, fifth, sixth generation. We have members who started as lumber yards, and in tire sales – they have adapted and moved, and we encourage diversification of their floors, because it helps bring footprints to the store.
DS: In terms of attracting consumer demographics, the NPD statistical presentation which you sponsored at this PrimeTime, and which we wrote about, made a point that there are demographics worthy to pursue beyond Millennials and Gen-Z’ers – and surprisingly, Baby Boomers were mentioned.
Hickman: We’re an industry of Baby Boomers if you look at who’s running our businesses. Of course, there’s a tremendous amount of new blood coming in, Everybody kind of discounts them, but, man, I don’t know a bunch of Millennials that are buying high-end café right now. There are some, when you look at our mix and how we SKU up. But Boomers are certainly our friends, and are going to be, for a long time.
That NPD presentation was a deliberate attempt on our part to open the eyes of our retailers. They are so focused on their businesses that we wanted to open the aperture up a bit and say, hey, you may not know about Ulta Beuty, and may not care to sell cosmetics or hair dryers, but I have two girls – they’re getting a large part of my disposable income. So if Ulta is doing something successful, let’s go take a look at it. That’s something where we’re going to bring world-class retail ideas together – I don’t care where they come from or who’s doing them. Ulta is winning on selection and service – and so do we, by the way. So the NPD presentation was a chance to open eyes a little, and get our dealers talking about other businesses [and disruptive models]; we need to watch and learn from those things.
DS: Talk about the importance of the storefront in the age of online.
Hickman: We know, particularly with the aspirational products we carry, that people want an experience. Amazon is a world-class organization. They are an incredible logistics and marketing and business machine. But you saw the NPD data. You can feel one way, but the facts are another thing: People like to shop in stores. And the more aspirational the product gets, the more they want to be treated face to face and educated, in a consultive way. And Amazon does a great job on education, but consultation along aspirational lines is where we’re going to win.
This show is built on educating retailers about making their stores experiential. We’re building $60,000 and $70,000 kitchens, and if you walk into our retailers’ stores, their displays are vignettes where people can see things in the settings where they’re going to be used.
DS: What are you most optimistic about, moving forward into the holiday sales season?
Hickman: For all the chaos written in the press, about uncertainty and pricing, every time I check, Christmas always comes, Black Friday always comes, Thanksgiving always comes. Our dealers are in a great position, coming out of the first half of the year. We will get them set with inventory and product, and ready for the back half. I feel really good about it and about a lot of things.
I’m impressed by the focus of our people to serve these members, I’m impressed with the amount of engagement I’ve seen, particularly their getting involved with digital. I’m very excited about our partnership with Google and what that will bring to our membership... I think we’re going to have a good back half.
DS: You’ve mentioned your team has done 6,000 store visits. Will that level of engagement be sustained and repeated?
Hickman: We made the commitment to go out to their stores and listen. We’ll probably get well past 6,000 store visits. That’s 55 people in the field, but that’s also me – I go out and visit dealers all the time. When we travel, we map our dealers’ stores and visit them. That’s part of our DNA now – those are opportunities to get information, to find out about retail problems, and that gives us ammunition for our jobs. We call members to follow up and talk about their challenges.
We’re highly engaged – we’re big – but, man, we’re personal.