It’s been a busy few months for the Nationwide Marketing Group. Before the turn of the calendar to 2018, the group announced a massive merger with longtime rival buying group the MEGA Group. The merger created a single organization that now represents some 14,000 storefronts throughout the country and that represents an estimated revenue pool of $18.5 billion.
The two have been hard at work since then planning for their first combined PrimeTime tradeshow, which will take place at the end of February in Orlando.
Nationwide VP Tom Hickman took some time out of his insanely packed schedule to sit down with Dealerscope to talk about the merger and how it will benefit the new combined membership. And we also spent some time talking about the benefits of being an independent retailer, and how these “little guys” are coming together to compete against some of the biggest names in retail.
Dealerscope: Let’s get the big news out of the way first. Tell us about the merger with MEGA Group and how it all came together.
Tom Hickman: Well you know, we've been pretty sturdy competitors for many, many years—20 plus years we've been kind of going at it, both really doing the same thing, helping independent retailers compete, trying to provide best in class programs, services, digital marketing, as the times have changed more than aggregate by marketing. We've known [MEGA Group President Rick Bellows] a long time, had an unbelievable amount of respect for him, and we just kind of sat down and said, 'You know we're looking at this and we're looking at each other as competitors, and we are, but we're really not,' if that makes any sense. The fight is for our dealers and for MEGA dealers and the now combined Nationwide-MEGA merger dealers, is really with big box—Home Depot, Lowes, Sears, Best Buy, Wal-Mart, and so on. It's not the independent retailer against the independent retailer. It's us against them quite frankly. And then you could pick Amazon or Wayfair or whatever business category you want and roll e-comm into that challenge.
When we sat around and we were talking about it, we realized that we needed to get together, we needed to leverage the scale, a lot of people need our help and our services, and we need to solve retail problems for now 5,300 retailers to help them compete. So we were very, very aligned although we were competitors, and it just seemed now was the time. The opportunity with Sears, the opportunity with hhgregg, the challenges with Amazon and Wayfair and Casper and whatever you want to call it—the competition is always there. It changes in the way it's shaped and formed and who it is. But it just seemed like a really good opportunity for us to get together and leverage the skill the group, leverage the investment of both groups.
A quick history lesson—you mentioned the 20 years competing. Prior to that, MEGA was actually part of Nationwide, correct?
Way, way, way back when for a heartbeat they were, before they went out on their own. And Rick Bellows, whose father has a strong retail background, very close with Robert Wiesner, one of our founders, and Rick is actually pretty close with them as well. So, yeah it's true it's a little known fact. That's good reporting there, good investigative reporting—lots of people don't know that, but yeah it is true. So, we kind of said we came back together after a long, long, long time apart. But, you know, it's exciting you know because there's a lot of passion on their side, a lot of passion on our side, and you start to force-multiply that, and it's going to be pretty powerful.
And you guys just came off of your first planning meeting together, so a two-part question: How did that planning meeting go, and what can we expect out of your first PrimeTime together this spring?
Your first question is probably the more interesting one, which is Day One of the planning meeting. There was the natural gravitation of how people walked in the room, and where they sat was pretty interesting. It's just years of behavior. But we came together fast. Like I said, it's interesting when you have common beliefs and common goals how quickly you knock down barriers. We got aligned really fast on our purpose. So that meeting was good. It's good to see faces that you respect. You know the old saying, 'I don't want play against that guy anymore.' You always had that when you play team sports, there's always somebody on the other team that you didn't want to play against anymore. I don't that I really wanted to play against Rick Bellows anymore, and I don't know that he really wanted to play against us anymore. So it's good to be on the same team, and that kind of was our theme of coming together, and you'll see the 'Come Together. Power of One' will be the theme for Orlando.
Our goal is for our members that know and love PrimeTime to come and go, 'Yeah, I feel it. I feel this momentum and this and this growth, and this makes sense the reason why we're doing this and I can sense the opportunity, this once in a lifetime scale opportunity.' We want our friends from MEGA that are now part of the family to go, 'Oh, now I get it.' You get what all the hype is about and I get what everybody talking about PrimeTime meant. And so, we know we've got to delight everybody, it's not easy. Our retailers are demanding and they should be, they expect a lot out of us, and we expect a lot out of ourselves. But you're talking 200 vendors, over 200,000 square feet of showroom space, 5,000 people. I am amped about kick-off and the buy show. It is going to be crazy.
What other added benefits will this merger bring about for member retailers?
We look at this merger as positioning Nationwide Marketing Group and its members as the independent channel. I mean, we are 5,300 retailers, 14,000 storefronts. When you look at what that represents in volume for our dealers and with our partners, it's substantial. It pushes us to, in some cases, the number one or two customer regardless of your footprint national or independent. So, you know, look. We've said from the beginning and we'll say it again. We're going to leverage that scale with our partners to make sure we maximize this opportunity both for our retailer and for our vendor partners. We're going to force-multiply this scale to get the best programs in the business for our members, the best pricing, the best volume rebate programs, display programs, you name it.
But I think just as important, as we stare down the future as we're going to leverage the investment of both sides of those businesses to provide world class digital assets and business services that an individual retailer, regardless of what size they would be in either MEGA or Nationwide's box, could never afford on their own. You start combining the consumer finance dollars and the inventory finance dollars, the business services combined business, what we can do for members and merchant services swipe card rates, long-term financing rates. It's really just beginning to start to unfold as we merge those programs together. And then lastly you look at probably firstly in terms of what will be important, but lastly in terms of what this conversation is, we will make massive investments from the digital standpoint to build a network that will connect our members and their members to have a world class digital experience online and of course to help drive traffic into the store.
Switching gears a little bit, 2017, if you were following any sort of retail news you heard was this apocalyptic kind of storyline. But the more we looked into it, the more we realized that those headlines were geared towards big box stores. So, since we haven’t heard that much about the independent channel in that regard, how has the space fared over the past year?
Yeah it's interesting, we just kind of smile and go about our business right. The death of the independent retailer has been trumpeted for many, many years. And I could share with you a laundry list of big box stores that have gone out, and here we are just growing and thriving. That's part of the beauty of being nimble. Being an independent retailer, you can change with the times. I will tell you, we're experiencing—and I'm knocking on wood right now—but we're experiencing some of our best times as an independent retailer that I can remember, either at Nationwide or in my previous life.
We don't ever like to see anybody go out of business. I don't think it's good for the channel, but with what's going on and what's happening with hhgregg and Sears this year, it's been great for our guys. They're having to move and be quick. They're going to have to continue to be nimble. But that's—we have guys that have been in business for 100 years. We could talk about the change we've seen in the last—you know how many retail apocalypses there's been in the past 100 years or so? There's been quite a few, right? And so, when you look at our dealer network, we're just heads down, keep working, keep changing, keep offering world class service.
We have to compete on price, but man we’ve got to crush it on the service. That's been our story for forever, and it's paying off. There's a lot of available premium market in this space right now bleeding off of some of these larger retailers. Sears had a pretty good AS, they had a pretty good mix of built-in, in the kitchen and they sold a pretty good amount of premium product, and that naturally suits our members. So we've we had, quite frankly since the show, we've been on a hell of a tear that I hope never stops.
One of the great things about being an independent, like you mention, is that ability to be nimble and test new things out and switch your model much quicker than a big box would be able to. What are some of the other benefits that a that an independent has over a larger operation?
That's a that's a fantastic question. It's one we talk about quite a bit. It's really kind of what I call your recipe. So, command and control of your experience whether that be online or, just as importantly, in-store, our guys work a directed sales floor, right? I mean, our guys are directed, professional salespeople, and that is a massive advantage for us. In the world where people want to understand, they want assisted selling whether it's in your built-in kitchen, your connected home, your adjustable base cool-gel mattress, people want that experience.
So, being nimble is one thing, being wildly educated and creating the best possible educational experience, confirming what we know they've already gone online, validating what they've heard, or dispelling what they might have questioned on the retail floor is a huge differentiation factor for us. To be able to walk a customer through that aspirational purchase and, like I said, validate what they've seen—we know they're getting educated before they come in, but there are still so many questions when they get there. So being able to control a world class experience in the store I think will always be—and not just for our independent retailers and electronics, appliances, furniture, and bedding—I think that will always be the differentiating factor for every independent retail business.
To check out our full conversation with Tom Hickman and other CE retail leaders, go to dealerscope.com/podcast.