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Dealer Profile : Nebraska Furniture Mart Brings CES to the Consumer

New CE division uses design best practices to increase sales

February 22, 2010 By Jeff O'Heir
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Nebraska Furniture Mart's new consumer electronics division, in its Kansas City, Kan., store started out about three years ago as a relatively simple concept. But, true to form, the company took the time to revise, expand and perfect its plans to create the best consumer experience it could.

Last week, about 140 vendor and manufacturer executives visited the new 51,000-square-foot CE division to see the fruit of that labor. Judging from some early responses, they weren't disappointed.

"When we were working with Nebraska Furniture Mart, they were focused on every little detail to make sure everything was just right," Greg Regelbrugge, vice president of Panasonic Consumer Electronics, said at the recent ribbon-cutting ceremony as he looked over the 1,850-square-foot Panasonic solutions display. "They've been true to their vision in bringing CES to the consumer."

The original vision was to create a Sony store-within-a-store in the Kansas City location.

But when Sony's architect looked at the space the NFM folks had chosen - an open area under a large skylight near the middle of the division - he said it was too large and too brightly lit. He suggested that management find a new location in the store. "What started out as a Sony store ended up being a whole reset," recalled Mark Shaw, NFM's electronics division merchandising manager

NFM chairman and CEO Irv Blumkin turned the architect's suggestion into an opportunity give the CE division a much-needed update. "What I have seen happen so much is that when retailers try to create a store-within-a-store, they don't integrate it with the rest of the store," Blumkin said after the ribbon-cutting ceremony to launch the new division. "At that point, we said 'let's take a look at the whole pie.'"

NFM hadn't changed its CE division much since the store was built in 2003, a time before the flat-panel boom, the gaming explosion, the iPod/iPhone phenomenon, the proliferation of Internet connected displays, the need for comprehensive product demonstrations and the importance of selling the full solution. "Our strategy is that we have to stay with the times," Blumkin said. "

The plans went through many revisions and included the input from nearly all of the division's sales associates, Shaw said. Construction began in phases about a year ago. The extra time and thought put into the renovation has paid off.

"There is no other retailer that can match this in terms of service, selection and value," said Jim Sanduski, Panasonic's new senior vice president of sales. "The other thing that distinguishes them (NFM) is that they have so many trained sales professionals. To have someone who can demonstrate product is important, especially with 3D coming out. They're very important to us."

Here are some design strategies and highlights NFM incorporated into the CE division that other CE retailers could learn from.

- Connectivity. NFM updated its infrastructure to include about 36 miles of Ethernet and other cabling. That's to ensure accurate and updated marketing messages are sent to the hundreds of flat-panel screens strategically placed around the division and to connect demo computers to the Internet, providing consumers with as much of a live experience as possible.

- Clear sight lines. All shelving and counters are below five feet (most are much lower) to ensure clear sight lines. This gives shoppers an open view of the division's variety of product offerings and invites them to explore different sections, which include Televisions (11,760 square feet); Wireless and Hand Held (5,200 square feet); Music/Movies (2,600 square feet); Computers, including an HP pavilion (6,500 square feet); a large gaming section; and a thoughtful In-Car System section, which is designed to attract mothers and other demographics outside of the 18- to 24-year-old male the 12-volt market traditionally markets to.

- Wide Aisles. Aisles are wide so shoppers never feel cramped. There is also plenty of open space for special events or specific product and technology demonstrations.

- Adjacencies. Careful attention has been paid to adjacencies. Products in each segment are arranged by category so consumers can easily see the full variety of offerings. The categories are also arranged to help consumers and sales people easily build full solutions. In other cases, products such as TVs are arranged in good, better, and best categories.

- Flexibity. All division sections are built on a flexible floor plan. Fixtures and shelving can be easily changed based on product and technology trends.

- Demonstrations. The majority of displayed products are live to encourage consumers to pick them up and experience their features. Many of the hand-held products, such as cell phones and MP3 players, are tethered to pedestals to encourage demonstrations. Each section includes plenty of flat screens that deliver product information and marketing information.

- Showcase important vendors. Key vendors have been given "salons" or consolidated solution displays on the floor to highlight their latest product and to encourage the sale of full solutions. Each is designed to uphold the manufacturer's brand image and preserve NFM's overall look and feel. Salons include Apple (1,200 square feet), Sony (1,700 square feet) and Bose (1,200 square feet). Each are manned by vendor-trained sales associates.

Manufacturer executives who attended the ribbon cutting were impressed with the final results.

"It tells a total brand story and makes it easier to buy a full solution," said John George, Sony's vice president of sales. "As a consumer, I like the overall design very much: it's nicely segmented, the sight lines are good, it's easy to shop."

Vendors also appreciated the live products and the opportunities to demonstrate emerging categories, such as 3D TV, and electronic readers and tablets.

"It has some of the most interactive displays I've seen from a retailer across the country," said Rick Calacci, LG's vice president of sales. "It reflects the excitement of our industry and gives consumers the chance to see the full breadth of product. It's just magnificent. It's so refreshing to see a store that shows the excitement of our products and gives consumers a variety of choice."

Harman International is using NFM as its first North American retail partner to showcase its Experience interactive sound demo, which will highlight its Harman/Kardon, JBL and AKG audio brands.

"Nebraska Furniture Mart understands the significance of our brands and is helping us step up," said Jim Foster, vice president and general manager of Harman Consumer, adding that Harman will begin expanding the Experience demo program to other retailers in the next few months. "We feel that Nebraska Furniture mart is a dealer, a partner, that's spot on. They've created a very comfortable experience for the consumer."



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