Retail Excellence : BrandSmart: Taking Back the CE IndustryAugust 8, 2012
The way Michael Perlman sees it, there probably has never been a worse time to be a traditional consumer electronics retailer: A relentlessly bad economy has battered sales and beaten back consumer confidence; anyone can find just about anything cheaper on the Internet (and, in most cases, skip the state sales tax while doing so); the general CE industry has practically handed customers over to Apple. The list goes on.
To ensure the immediate survival and future success of his BrandsMart USA chain (seven stores in Florida and four in Georgia), Perlman and his team a few years ago carefully analyzed every part of their electronics and appliance businesses—both brick-and-mortar and online—and came up with a game plan. “We went through a lot of self-analysis,” said Perlman, the company’s CEO. “The point is, we really didn’t have a choice.”
The team spent the last 12 months implementing most of the major aspects of that strategy, reinventing a business model that now helps to improve sales and profits in some of the hardest hit markets in the country. The success of those efforts has made the business stand out among its competition.
Along the way, BrandsMart has often taken the opposite approach than many of its competitors. One of the biggest was to change its historical image as a “price house,” and to develop a reputation as a retailer that is also based on value and backed with deep services.
As several of BrandsMart’s major competitors began shutting their in-store service departments in favor of outsourcing, Perlman decided to build his up (it employs about 300 people today), and to change the company’s advertising messages to promote it. “We’re not the people who just do the sales, but we’re also the customer’s hand holder,” he said, in describing the basic message behind the advertising campaign.
Part of that services push includes free delivery for all appliances more than $399, and for all TVs 46 inches and up. The service also features free installation of all Internet-connected TVs, which are delivered by a service technician whose truck is loaded with every logical AV add-on product. The strategy has increased the average ticket prices and has more than offset the cost of free delivery. What’s more important to Perlman than the chance of an immediate upsell is that the visit by the service technician ensures that the customer learns about all the features of an Internet-connected TV, and how to properly use them.