Ristow Briefs HES Members on Q4
Heading into the heart of the Q4 stretch and the start of an earlier-than-ever Black Friday selling period, Home Entertainment Source (HES) executive vice president Jim Ristow told his buying group membership during a 30-minute webinar Monday to expect a “good” holiday season that could in many respects mirror that of 2011.
One factor influencing Q4 2012 that was not part of the 2011 landscape, though, was the gaining of traction of vendor UPPs (unilateral pricing policies) during Q2 and Q3 2012, which “rationalized and stabilized the market.” Other good news, he added, is that vendors have also planned their inventories to match “the new realities of the market. It’s profit versus volume, and we haven’t heard that phrase in a long time, so the times are changing.”
However, margins in those two quarters shrank somewhat due to more product bundling and use of IRs (instant rebates), Ristow observed, and there were also challenges to margins where UPPs had been imposed on lesser-featured models. But more vendors are instituting UPPs, and once new model introductions have cycled into the market, margins on some UPP-earmarked SKUs could rise anywhere from five to 10 percent. “Overall, vendors have voted, and it’s about making money for them as well as us,” he said.