NATM: Winning in the Current Retail Environment
The life of a buying group looks much different today than it did 10 to 15 years ago. Not too surprising, considering much of the retail industry has changed dramatically over this course of time as well. But not everyone is always willing to embrace change - a challenge NATM Executive Director Jerry Satoren has had to address since stepping into office about two years ago.
“I think a lot of vendors wish things were they way they used to be when they were dealing with this group but the rules kind of changed,” Satoren stated at the group’s annual press meeting, held during its 2016 Vendor Conference in Dallas last week.
NATM, a buying group made up of 11 large regional electronics and appliance dealers, has witnessed this changing landscape firsthand.
The group, however, is past the stage of accepting these changes and is well into learning how to be pragmatic and nimble in the current retail environment. While increasing its value of membership, NATM has developed a cohesiveness that, according to Director of Operations Michael Maund, is being accepted by its vendors.
These changes helped shape this year’s Conference theme: “Winning Together.”
“It was kind of easy to come up with our theme for this year because Mike and I feel like we’ve been winning, and it’s a positive year,” Satoren stated.
The retail landscape may look different than it used to, but if the past year has proved anything, it’s that that the stronger NATM is as a group, the easier it is to win.
How the Rules Changed
According to Satoren, the market shift really began to hit home about eight years ago.
"I guess the biggest change in the business in both electronics and appliances over the years is that we don’t really control our floors any more,” Satoren said alluding to the fact that members have less control now than in the past regarding what deals are used to promote products. "We’re on promotions 365 days a year - they have Earth Days promotions. I’m not battling it. We just have to work within the current market environment and really be pragmatic about it."
“Promotional calendars and rebates and discounts for all the holidays - that’s very impactful in terms of how we go to market in both appliances and television… you have to think in [terms of the] current environment, not the way things used to be.”
Increasing Member Value
So how does one win in the current world of retail? It’s not easy. While 2016 has been a solid year for NATM, the numbers didn’t come quite as easily as they did in 2015. According to Satoren, laundry has been down since April and the overall growth of the appliance sector is not what it was last year.
That’s not to say the group has been resting on its laurels.
Over the past year, increasing the value of membership has been a main goal of Satoren’s. Annual member costs have been lowered and a number of group initiatives with NATM’s vendors have been added.
The past year has also seen the group add a very high-end mix of business on the electronics side. Newer (and pricier) TV tech innovations like quantum dot, OLED and HDR, have made a difference, as larger screen sizes have moved to to agreeable price-point levels.
There has also been an increase in engagement in consumer financing below Tier 1, which according to Satoren, has been helpful to NATM members.
Possibly the most significant development of the year, however, is that all 11 NATM members are now in the bedding business. According to Satoren, bedding has been terrific - both profitable and offering enormous growth.
“I’ve always held that your customer is your customer and the only reason they’re going to the mattress store is because you’re not offering it to them. Suddenly, if you took TVs off the shelf and put mattresses on those same shelves they’d buy from you because they trust you. You are the market leader. You dominate. They’ll buy bedding from you, and that clearly has been proven to us and all of our members,” Satoren stated.
What Lies Ahead
The future of NATM, however, relies on more than just bedding. NATM is embracing the world of IoT and connected home technology in preparation for what’s to come. According to Satoren, the future of connected home technology will largely include DIY devices, which the group is adding to its wheelhouse in preparation for the booming IoT marketplace.
But if NATM has learned anything from the past few years it’s that preparing for the future is about more than just having a good idea of what’s ahead. It’s about building cohesiveness and dialogue among members. And, given the caliber of NATM’s membership, there is optimism about the future. As Maund stated, “Collectively, these guys are brilliant merchants.”