Funai-Haier-Sansui Strategy

Nationwide Group Bolstering Presence in ‘Everyday’ CE Low Pricing

February 23, 2011 by Mark Seavy|Top News

LAS VEGAS -- Nationwide Marketing Group is taking a three-pronged strategy toward everyday low pricing, using the Funai, Haier and Sansui brands to bolster its dealers’ profile with entry-level customers, company executives said at a meeting of the group. Funai and Haier courted Nationwide dealers a year ago, and Sansui joined the fray this week with 42-inch and 46-inch edge-lit LED-backlit 1080p LCD TVs with $598 and $700 dealer costs after $22 and $30 in cashback incentives, Sansui Sales Manager Hideo Sakakihara said. The 42-inch and 46-inch LCD TVs will carry $699 and $799 prices, he said.

Funai is expanding its online system for Nationwide dealers to field requests for Sylvania and Magnavox brand product with orders of at least $3,500, said Michael Cannon, the vendor’s director of sales for the southeast region. Funai piloted the direct order system last year, but didn’t deliver as promised, said Michael Decker, senior vice president for electronics marketing at Nationwide. Orion, which acquired the U.S rights to the Sansui brand, requires at least a $20,000 order for direct shipments, Sakakihara said.

"One of the things that our members have been strongly requesting over the past few years is having the ability to compete with everyday low prices,” Decker said. “This greatly enhances our ability to compete, not only at the committed price points in the marketplace, but to show customers added value propositions and programs, products and categories that can enhance the average ticket and attract more of them."

Funai’s Sylvania competes most directly with Sansui at national retailers like Walmart, and Magnavox and Philips will more likely find shelf space at Nationwide dealers, Cannon said. Funai also is edging its own brand back into the market with an Internet-capable portable wireless Blu-ray player ($399) and an Android-based tablet with a 7-inch LCD that can serve as a universal remote control and may eventually be able to stream content to a set, he said. Also available are Funai-brand HDMI 1.3 12-foot ($49) and 6-foot ($29) cables. “This is more niche stuff that gets us traction” for the Funai brand, Cannon said. Whether the traction translates into a return of the Funai brand to TVs, hasn’t been decided and depends how it is positioned in relation to the Magnavox, Philips and Sylvania banners, he said. “I think we in the past had too narrow an assortment of products at the low end of the market and found ourselves losing customers” to national and regional chains, said David Moore, member service coordinator for the eastern region of Nationwide’s BrandDirect.

To differentiate itself from Sansui and Haier at Nationwide, Funai is banking on customer service to back up its products, Cannon said. “We have customer service and a call center,” he said. “We're trying to explain that there is value to that, because am I going to beat those guys everyday on price? No."

Nationwide also is testing the waters with tablets, drawing from Azpen, LG Electronics, Samsung, Toshiba and Viewsonic. With only about 10 percent of Nationwide dealers selling PCs and many having abandoned the business because of low margins, selling them on tablets is a challenge, said Viewsonic Regional Sales Manager Jeff Shapiro.

Azpen, a Chinese company, dropped a dual-boot, Windows 7-Android operating system tablet with a 10.1 LCD that it had demonstrated at CES, in favor of a Windows 7-based model ($499) that will be delivered in May, an Nvidia Tegra-2 processor replacing the Intel 1.5 MHz Atom N455 chip in the earlier model, National Sales Manager Stephen Bennett said. Azpen, which plans to ship an entry-level model ($149) in the spring with a 7-inch LCD and 600 MHz processor, is targeting Nationwide dealers without access to Hewlett-Packard, Dell and other high-profile brands, Bennett said.

"Our mission is to increase our membership’s credibility in the computer space, and if we provide a sales-assisted highly marketing capable business proposition, that’s going to get that ear of an HP and Dell,” said Doug Schatz, Nationwide vice president of electronics merchandising.

Nationwide Meeting Notebook

Nationwide is “aggressively” seeking to attract furniture retailers to its mix of CE and major appliance dealers, to contribute about half of a goal of 300 added members, gross, to its membership this year, CEO Robert Weisner said. Nationwide added 235-240 members, gross, in 2010, and netted ‘a little over” 100 to finish at about 2,900, he said. Some Nationwide dealers were lost to retirement and business closings and sales, Weisner said. About 40 prospective members attended the buying group meeting, he said. Nationwide’s combined revenue last year topped $12 billion, including about $2.5 billion in CE, Weisner said. Nationwide’s CE dollar sales declined 7 percent, driven by lower average selling prices, but units were up 3 percent, Decker said. In 2009, Nationwidewide’s CE dollar volume tumbled 8 percent, but units rose 23 percent.

An overlap between Nationwide’s meeting this week with rival BrandSource’s dealer gathering in Orlando didn’t affect attendance, Weisner said. Attendance at the Nationwide meeting was 4,000 dealers and exhibitors, up from 3,300 a year ago and 2,500 in 2009. More than 900 Nationwide members were at the show, an increase from 825 in 2010. The show covered 200,000 square feet at the Sands Expo, up from 186,000 square feet last year, Nationwide officials said. Nationwide and BrandSource typically have scheduled their dealer shows at different times. Nationwide usually has its show in late February or early March, BrandSource in late March. The Nationwide meeting at the Sands had been set for three years, Weisner said. Nationwide sent vendors a list of members that would be attending the show, he said. “We don’t want conflicts, and we don’t think that is good for vendors,” Weisner said. “Ultimately the guy who is doing the most volume gets the most attention.”

Panasonic, which returned to the spring Nationwide meeting in 2010 after several years’ absence, didn’t attend this year. Nationwide and Panasonic parted ways in 2006 when the company increased the minimum annual sales required for a factory-direct account to $4 million from $1 million. “We decided to take a hiatus and try and develop something for August,” Decker said, referring to the group’s next meeting in August in Texas.

Nationwide member Morris Furniture grand-opened a new four-store, 72,000-square-foot addition to its Ashley Furniture HomeStore in Springdale, Ohio. Four Morris-owned outlets, including the Home Theater Store at Morris, were linked together to fill 144,000 square feet of a 250,000 square foot complex that once housed Roberds. Morris is scouting the Dayton and Columbus, Ohio, markets for additional 100,000-square-foot facilities to house similar complexes, CEO Larry Klaben told us. Morris invested about $3 million in the leased Springdale location, expected to produce $18 million in annual revenue, Klaben said. Morris has three Morris Home Furnishings stores in the Dayton-Cincinnati area, plus five Ashley locations and a Thomasville showroom.