How the Indy CE Retailer is Transitioning to Online
Most of sales in-store but buying groups prepare dealers for shiftMarch 15, 2013 By Nancy Klosek
The independent CE retail channel still sells the vast majority of its products in-store. But buying groups are offering more tools to help dealers fulfill online marketing and e-commerce initiatives. Here’s what they’re doing. For more insights from the full buying group roundtable, see the March issue of Dealerscope and every day on Dealerscope.com.
DEALERSCOPE: What percentage of your dealers’ sales was online compared to in-store in 2012? How will those numbers change this year?
Bob Lawrence, CEO, Brand Source: Ninety percent of what we sell is stillsold at brick and mortar. So 10 percent is sold online. Will it shift? There are things that will help brick and mortar. Whether a dealer thinks UMRP (Unilateral Minimum Resale Pricing) is good, bad or indifferent, certainly in those lines and those models, there’s no real reason for a customer to buy online versus at brick and mortar. Will the low-priced commodity stuff continue to be moved through the Internet? Yes.
Will that stuff increase or decrease? It’s interesting. I think what happens with Best Buy will determine the direction of the industry. Here’s why: if Best Buy goes down, and that business goes to Walmart and to Amazon, why would anybody as a manufacturer invest in value-added product, because there’s nobody there to sell it? In the next 12 months, it’ll be pretty clear where the industry is going, from an online and a brick-and-mortar standpoint.
Tom Hickman, senior vice president of electronics, Nationwide Marketing Group: We’re traditionally brick-and-mortar. But online for us is very important. We have members who are fully transactional, who drive online, and we have guys who have sites for information purposes only. Our membership doesn’t have any pure-play Internet retailers. Overall, online sales are growing, and we have heavy efforts inside our membership from a support standpoint of having members educate themselves and helping them take control of their web sites to grow them into whatever they want them to be.
Jeannette Howe, executive director, Specialty Electronics Nationwide: Consumers start the educational process online, and dealers need to be involved in that. We’ve been very pro-active.
Frank Sandtner at Nationwide runs our web development team, and they manage the whole smorgasbord of services that help dealers understand things like reputation management, apps for phones that will translate their web sites into mobile applications, SEO and SEM. We do need to bring our dealer base into that world. It is a full-time job. Used to be a dealer had one guy, and 10 percent of his job was to manage the web site. That’s not a solution going forward. You need someone dedicated to your social media campaign andyour Twitter feeds. It needs to be integrated with your paper marketing campaign. It all has to work together to tell a single story.