PRO Members Say They’re Testing Array Of Differentiation Tools
SCOTTSDALE, Ariz. - PRO Group members are deploying an array of tactics to combat the continuing recessionary sales slump and further differentiate themselves from ever-expanding national chains, dealers said at PRO’s annual meeting here.
The strategies vary from adding new product lines, to testing new formats and selling more services, but the common thread is a need to keep pace with changing consumer trends, dealers said. The moves are being driven by a business climate that resulted in the liquidations of MyerEmco and Bernie’s Audio Video earlier this year. Flanner’s Home Entertainment also temporarily shut down its Milwaukee store last week as it sought investor help to pay off bank debt, sources said. “Retailers have to continue to evolve, if they don’t they stagnate and risk becoming irrelevant because Wal-Mart and Best Buy are going to continue to consolidate and expand,” said Jim Sanduski, senior vice president of sales at Panasonic.
The evolution is taking many forms, dealers said. While Vann’s is expected to roll out a smaller, 5,000-square-foot format in September to sell smartphones, Apple products and other mobile gear, Crutchfield will open this year a sub-10,000-square-foot “test lab” in Charlottesville, Va. The “lab” will try out a new format distinct from those deployed at its 14,000 and 20,000-square foot outlets in Charlottesville and Harrisonburg, Va., said Crutchfield Executive Vice President Rick Souder, who declined to disclose details. “It may never go beyond a test, but we need to try out new ideas because the customers are different now and younger consumers look at products differently,” he said.
Bjorn’s Audio Video recently hired a lighting designer for its custom install business and sent him to Lutron this week for training, President Bjorn Dybdahl said. That came after Bjorn’s nearly parted with Lutron, he said. Bjorn’s also hired a new employee a month and a half ago to market high-end custom installation and products to Mexican citizens with a second home in the San Antonio area, a business that so far has proved fruitful, Dybdahl said. Huppin’s/One Call, which combines a single store in Spokane, Wash., with a online business it launched 15 years ago, also is said to be considering opening a new bricks and mortar outlet.
Other members are adding categories. Electronics Expo is broadening its PC line in becoming an authorized Sony Vaio reseller and dedicates about 1,000 square feet to computers and videogames, CEO Leon Temiz said. Electronic’s Expo rival Sixth Avenue Electronics is adding a 2,000-square-foot PC department and bringing in videogames and major appliances, company officials said.
"It makes sense” for Electronics Expo to add PCs because “otherwise those customers might be going to Best Buy,” Temiz said. But in expanding a category typically outside the expertise of specialty CE chains, Electronics Expo is being careful to merchandise them as convergence devices that connect easily to a home network, Temiz said.
Since taking over as PRO executive director several years ago, David Workman has diversified the group from an AV specialist-only organization to one with dealers that also sell PCs and major appliances. The mix benefits PRO Group members in enabling them to gain insight into categories they don’t carry and the strategies behind selling them, dealers said. The varied assortment of PRO retailers also helped vendors. While Zvox’s sound bars and home theater systems are sold through long-time audio retailers and PRO Group members like ListenUp, the company added Bill Smith Inc., a four-store Florida-based chain that previously hadn’t sold the category, Zvox President Tom Hannaher said. Smith Thursday was promoting Zvox on its Web site as “home theater made simple.” Zvox products also are sold through ListenUp.
"Some of these members were founded on selling audio in the 1970s and they may have their own agenda in carrying products,” Hannaher said. “Smith had never carried it. For us that was important because it showed we can do well in a TV and appliance dealer."
Pro Group Notebook …
The combination TiVo DVR/DirecTV receiver will hit the market in six to nine months, Doug Bieter, TiVo senior director of consumer sales, told us. The product, which stems from companies renewing a pact in 2008, was originally scheduled to ship in the second half of last year. Delivery was postponed to this spring and then to the second half (CED March 10 p1). TiVo said in an its 10-K earlier this year that DirecTV didn’t yet have the right to distribute and manufacture TiVo DVR/satellite receivers (CED April 8 p1). The combo product is in DirecTV’s qualification process, Bieter said. TiVo is continuing to sell its DVRs, including the new Premiere model, through Best Buy, but “kind of pulled” it from other mass retailers, Bieter said. It’s targeting PRO Group members for custom installation, he said. “It’s a CableCARD box with Internet connections and wireless adapters so the Targets of the world are not the best place to sell it,” Bieter said. “That’s why we like this specialty channel because they showcase it and talk about it and that’s where we should be. We have taken the product a little bit upstream from a distribution standpoint. It takes a connection to broadband and it’s a little more technical and we didn’t feel like the mass nationals were ready for it.” While TiVo expects to sell off the last of its SD DVRs later this year, they are being made available to cable operators, Bieter said. TiVo’s field tests with Comcast and Cox Communications in New England remain on hold, despite many of the technical issues being resolved, Bieter said. TiVo’s DVR software was downloaded to Comcast and Cox set-top boxes in the tests, a process that taxed the systems, TiVo officials have said. “The experience now is good, it’s when do they want to roll it out to other markets,” Bieter said. “It’s a big software download and it needs a pretty healthy pipe” to distribute it.
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Panasonic will launch a new dealer advertising funds module in the next several weeks as part of its Hub automated system that’s designed to ease retail transactions, senior Panasonic executive Bob Perry said. Panasonic began implementing the system about a year ago as a means for handling instant rebates, advertising and trade credits and marketing and promotional expenses, Perry said. The system, which includes customer relationship management software, was designed internally. It’s designed to “save millions of dollars” in operational expenses by automating retail processes so that dealers are “building value instead of chasing paper,” Perry said.
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Samsung won twin honors as PRO Group’s top overall vendor of the year and best video supplier for 2010. Denon won top audio vendor honors, while Alpine took the awards in mobile audio and accessories, respectively. Samsung repeated as overall vendor of the year, as did Denon in audio. Samsung displaced last year’s winner Mitsubishi as top video vendor.