Survival of the Fittest
PARA Improves on Natural Selection with "Survival of the Fittest"
By David Dritsas
Uncertain economic times have a tendency to spur references to Darwin's theories of evolution. But these references are often framed in negative terms, and miss evolution's most basic premise, which is that "survival of the fittest" is based on positive adaptation. If any business is susceptible to the elements of change, it is retailing, so perhaps it's no surprise that this year's Professional Audio/Video Retailers Association (PARA) conference, held in climate-friendly Miami, Florida, preached the mantra of Darwin. While trimming costs and operational expenses are helpful retailing strategies, the successful retailer needs to think of new, creative ways to attract and maintain its customer base.
Almost as a reminder of the current uncertainty, attendance at this year's conference was down 15 to 16 percent, according to Deborah Smith, PARA's executive director. Maintaining a tone of optimism, she says that she was impressed with the overall attendance, considering the trend of corporate travel restrictions, and numerous cancellations of other conferences. Certainly, March was a difficult month for sales. Gary McCormack of Ovation Audio cited political uncertainties as a major contributor to slow traffic. He was happy to see, though, that April picked up the pace. Other dealers candidly corroborated this trend at retail.
With hard times in mind, a hot topic at the conference was effective forecasting, which PARA contends is not practiced enough by dealers. The vendors are urging them, too. "If we don't get good forecasting information from the retailers, they risk losing the sale to the consumer," said Steve Caldero of Yamaha. But forecasting is more than just making educated guesses. Bernie Sapienza of ANA Consulting, Sales & Marketing ran a course covering the basic formulas needed for proper forecasting. "At the end of the day we are still throwing darts at a dart board," said Sapienza, though he stressed that it is possible to make better guesses based on a proper analysis of a business's sales and inventory history. He maintained that this will in turn aid the manufacturers in their own forecasting. "Manufacturers tend to do a better job forecasting their needs with dealer input," he said. But more importantly, it will help the dealer in the end, as Sapienza explained that good forecasting can help keep inventory levels in check, so that they do not hurt operating profits or leave the dealer short-handed.