Q&A: Fred Towns, President, New Age Electronics
Dealerscope: This was the first year that New Age co-located its Executive Dealer Summit with [parent] SYNNEX’s National Conference. What was the thinking behind that, and will it be repeated next year?
Fred Towns: When people hear of a corporation, they never know how many different facets of business are involved. With SYNNEX, there are so many different aspects, we thought it was good for our customers to see the size and the breadth of our company.
Dealerscope: What was your goal for what dealers could expect to learn at the Summit?
Towns: In terms of unique dealer benefits, I tried to bring up both in our vendor and our dealer sessions that the retail landscape is changing so, so fast. Ninety percent of people coming into a retailer have done online research before they come in to look at a product. It enables them to ask intelligent questions and gives them a baseline about the product, so they can see if the value is perceived as good or fair, and they can learn what they should be looking for in a product – the feature sets, and differences.
If a retailer is sensitive to those points, then they should build an environment within their store offering or extended-store offering to provide solutions and make sure that they can meet needs when a customer comes in with those questions, and make certain the customer isn’t disappointed that they came in and they didn’t find what they were looking at on the web.
With SYNNEX’s warehouse facilities and ability to ship so quickly, in most cases we can get a product to someone within 24 hours, and make sure that retail experience of choice of style and selection is met.
For example. there are roughly 16 Beats by Dr. Dre products, but 96 colors. Choice today means color, style and personalization. We can empower a retailer, through our drop-ship service to the customer, to not have to say ‘no,’ through providing a selection of an extended assortment. It gives them the ability to always be able to say to the customer, ‘I can have it to you immediately.’ We blind ship it with the dealer’s logo on it; it’s seamless, and all the information is maintained by the retailer. Our capabilities, due to the many different sizes of customer we handle, enable us to put thousands of units out the next day to customers.
The other part is building solutions around the experience. If they buy something today, you don’t want them to get it home and helplessly ask, ‘How do you do that?’
Many times, a consumer will buy a product and return it because they’re scared about how to transition to that device. For example, when they buy a new computer, they’re looking, say, to move their email to that device.
We’re able to provide a set of services that we can offer to our retailers to make that experience easier – to give the consumer a place to call. We can set up programs with our retailers that will enable them to have a person walked through a setup process, be it through an online chat or a phone number. It minimizes returns, makes shopping more pleasurable and gives customers the feeling that they bought a product with confidence that the dealer stands by it and it is supported.
Dealerscope: What other solutions do you make available to manufacturers and retailers?
Towns: One big challenge for manufacturers is how to make their solutions complete. Not every manufacturer has every tool to be price-competitive and bring that solution to the end-use consumer. If you look at today’s tablets, in many cases you have a wire that can connect to a USB port on your computer to charge it, but they’re not providing the charger, just the cable. We can provide those tools, and take that fear away. It could be, if a customer buys a phone, tablet or computer, supplying some way to protect it – a case, a cover. These are what we look at – the total experience the consumer will have when they open the box, and what are the next things that are desirable so they can get the most out of the experience. Most digital cameras out of the box don’t come with a memory card, or a card reader. We look at all those solutions and work with the retailer to customize them, whether it be a product, or a bundle we build for them, or a unique model that comes from the factory that is a derivative to enable them to offer a complete solution as well as a product that differentiates them from their competition.
Dealerscope: How important is fashion as a consumer dictate?
Towns: Who is the shopper and what do they want? For example, do men want something different than women? From the female perspective, they want other styles and features that help them personalize. Colors are important, and it’s part of the reason tablets started coming in 7-inch configurations – they’re easier to fit into a handbag, are a way for them to stay connected and keep to schedule, and are handy to have to keep children entertained and engaged in something. Tablets have become a lifestyle piece.
When you look at some of the vendors we’ve added, a lot have brought products that are more ‘enabled for fashion.’ And those products are sold in many different places. Products enabled for exercise, for example, are sold everywhere from a runners’ store, to a shoe store, to a travel store, to an airport store. Lifestyle products are opening up additional channels of customers, and fashion-channel dealers for us.
The Beats agreement has brought us a lot new retail channels, and we’re also providing them with the other side of the device – besides headphones, we’re offering them tablets, smartphones or computers. And those companies who provide enhancements to those products also come into play – for example, HP has Beats audio built into their tablets and into select PC models. Symbiotic relationships have developed.
Dealerscope: What are some of the hottest categories?
Towns: Wearable technologies, mobility products and audio products. There are also changes in where the tablet world is going. Tablet size has become a big deciding factor; products are downsized from the 10 inches they started at.
Dealerscope: What is your dealer mix like, and what are you doing to support the different types of dealers you serve?
Towns: We handle independents with consultative selling floors, which is a big part of our business, and we’re trying to bring sets of services to those dealers that enable them to be more ‘sticky’ with the customer. Today, when you finally get a customer in the door to make a selection or view an offering, you have to be able to bring a bunch of other reasons why that customer should shop there. So one is selection, through extended brand assortment. The second is through electronic software download (ESD) – the ability to ask a couple of questions of the customer to get an idea of how the product will be used. It might be a simple question of asking a customer who’s buying a notebook to replace one if they are planning to use it with a tablet, with a smartphone, do they need virus protection, will they use it for work or will their child use it for homework, will they need a productivity suite, and so on. ESD brings a huge benefit for the dealer of not having to inventory software, and not worrying about whether boxed software is the most current version. The return on investment capital (ROIC) is going to be much healthier for retailers using services like this.
Dealerscope: Are you optimistic for the holiday season?
Towns: It will all be about the confidence of “spend.” You don’t hear about Syria right now; this week, it’s about the government shutdown. All those things put disruption into the marketplace. But with those being fixed, the market is poised for a good holiday. Stocks are up and people should feel more comfortable spending, and with that, technologies are coming out to help the fact – things like gaming consoles such as Sony’s PS4 and Xbox One, due out in mid-November. There will be out-of-the-gate tight availability, which will also create longevity of interest, which is a good thing. In IT technology, it will be a big buying year for accessories for tablets and PCs and for audio products and headphones.
We believe our help is critical for dealers to bring selection and unique solutions to the market that their competitors can’t, to help them become smarter in their inventory management, to help them utilize ESD, and to make sure we have the hottest, most desirable technologies in affordable price ranges.