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Ristow Briefs HES Members on Q4

October 15, 2012 By Nancy Klosek
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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.

The first three quarters also saw a buying trend towards 60-inch-and-above TV screen sizes.  Another trend, showrooming, has extended even to categories beyond CE, he said.  

Against the backdrop of lower unemployment figures and housing foreclosure numbers and rising consumer confidence, Ristow summarized expert industry opinion indicating “choppy” retail conditions in the run-up to the presidential election that would likely resolve in a post-election buying surge at retail, whatever the results at the polls.

Besides exhorting membership to sell TV quality over screen size, Ristow also gave a nod to audio, heralding the coming of more “new audio” – wireless – products and different iterations of traditional categories such as A/V receivers.  “The way to make money is all TVs need to sell with at least a soundbar, and with actual audio [systems] is even better – we’re up double digits in audio.” He cited control product lines as an additional up-and-coming profit center for the membership, since “integration skills are better among our retailers. We’re Number Two to Best Buy in audio and custom integration.”
 

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