Early Signs Promising For Home Entertainment Source’s E-Commerce Solution

There were promising early signs for the e-commerce solution that Home Entertainment Source introduced last year, said Jim Ristow, executive vice president of HES/BrandSource. But the number of CE retail members who are using HES’s infrastructure to create their own e-commerce sites remains limited and those few are confined in what information they can include at the site, said retailers polled by Consumer Electronics Daily.

Each of the group’s 570 or so retail members is included at the BrandSource national website that’s been up and running for seven years, Ristow said. So, when a visitor to the site seeks a local retailer at the site, the name and contact information for that dealer comes up. Only a small, unspecified number of retail members, however, are taking advantage of the cost-effective solution for creating separate, individual dealer e-commerce websites that Ristow detailed for us a year ago (CED April 30/09 p3). But he said that number was “growing exponentially every month.” Those who do are able to “get the look and feel of a national type of a website for pennies on the dollar,” he said. “It makes them look and feel larger than they actually are individually,” he said.

There was a “soft launch” of the individual retail site solution in the fall, Ristow said. That was designed “to make sure that everything was working properly,” he said. But since Jan. 1, “we've been much more active,” he said. Still, not all HES retail members believe the solution is 100 percent ready.

One of the first retailers to opt for the HES solution was Lynn’s Audio Video in Logan, Utah, about 90 miles north of Salt Lake City, its owner and president, Bret Hancey, told us. Hancey “wanted a website forever,” and HES offered a solution that was convenient and much cheaper than if it had to design and operate its own site, he told us. HES even handles all the product updates at the site, he said. So, Hancey waited for HES to develop its solution and launched its site using BrandSource’s infrastructure about six months ago, he said.

So far, the Lynn’s site is “getting a lot of hits,” Hancey said. About 500 new customers visited the site in March, he said. But he hasn’t been offering an e-commerce capability at the site because there’s been no way for him to list Lynn’s own pricing, he said. Only manufacturers’ advertised prices (MAP) are an option now, so Lynn’s opted to not list prices at all at the site, he said, so there was no way to buy products from the site. And when there’s no price, visitors “don’t stay on” the site for long, he said, telling us consumers want to see that Lynn’s is competitive.

It was also “hard to judge” how many website visits were translating into bricks-and-mortar store traffic, Hancey said. About five or six new visitors to its bricks-and-mortar store each month said they visited the site before traveling to the store, he said. Once the e-commerce capability is added, even if it doesn’t translate into many online purchases, it will serve to “show people we're competitive,” he said.

A shopping cart was added to the Lynn’s site shortly after we spoke to Hancey on Tuesday, featuring MAP pricing and the ability to buy products for the first time. He said it was news to him, although he didn’t object to consumers now being able to buy products using the site, even if it was MAP pricing. The addition of the cart could have been “a glitch” on the part of HES/BrandSource, the group said. “I still want to be able to control pricing” at the site, he said, guessing that products ordered from the site would be coming from the BrandSource warehouse but that he would be making the profit.

While all pricing listed at the sites are now MAP, the group said Tuesday, “In the near future an updated site will roll out that will allow the dealer access to manage their own pricing, products, services and solutions should they desire” that.

But Stuart Schuster, president of Marvin Electronics in Fort Worth, Texas, said “on certain brands, you can’t” set your own prices anyway. “Sharp has MAP pricing and Samsung has MAP pricing and almost every major company does anyway, and you don’t want to cause more trouble,” he said. “You just want to get more traffic,” and an e-commerce site is one way to do that, he said, saying business remained “lackluster” after a disappointing holiday season, although there were some signs of “the economy getting better.” If MAP pricing is “the way you have to do it” to get the site, “then you have to do it that way,” he said.

Regardless, Schuster perceived that the HES solution “isn’t quite ready yet,” although it was “getting closer and closer” to being completely done, he said. He recently heard from other members that the solution was improving, while others said it wasn’t quite ready, and others said it wasn’t working completely. Schuster told us last year he was looking into the HES solution. “I'd like to do my own” e-commerce website, but HES has spent a lot of time and money “doing this and I'd like to take advantage of it,” he said Tuesday. The group, in fact, said it invested more than $1.5 million on the e-commerce strategy.

There were some HES retailers who “probably got a head start over me” on the solution, Schuster said. But he said, “I plan to use it -- as soon as I can be assured that everything is working like it’s supposed to.” He had no doubt, however, that the site created for each retailer was “going to look like a first-class site,” he said. The average independent CE dealer can’t afford to spend $150,000-$250,000 to get a good site up and running on its own, he said.

HES was still working to “expand the catalog of product offerings” cited at the retail sites, Ristow said. There is product information online now for all the video brands its dealers offer and audio products carried under those brands, he said. But he said vendors who just sold audio weren’t yet represented. “We're growing that data base right now. That’s our next” project, he said. He didn’t say when those product details would be added, but said HES makes “major upgrades quarterly.” There’s “so many audio companies,” and it’s often “hard to get” product information on their products “even though it’s basically what’s in the catalog,” Schuster said.

Other HES retail members who had expressed interest in the HES e-commerce offering a year ago included Pflanz Electronics President Vance Pflanz in Sioux City, Iowa. As of a few weeks ago, Pflanz said he had yet to use HES to create a Pflanz e-commerce site. He, too, was under the impression it wasn’t quite ready. Like Marvin, Pflanz still has its own information-only website.

BrandSource’s national site was relaunched in the fall with “a completely different look and feel” that’s targeted at females, Ristow said. The site before that was “very product driven,” with a “very old school retail” look, he said. “Our goal was to have a Martha Stewart look and feel to it,” he said. Members like the new site, which is “much more in line with today’s consumers,” he said.