2018 Buying Group Roundtable: Tom Hickman, Nationwide Marketing Group
Retailers, in their never-ending quest to compete for customers’ hard-earned money alongside major big-box retailers and the ongoing threat of Amazon, can really use any advantage that comes to pass. For some, it’s leveraging their local connections within their community. For others, it’s providing a service that attacks a gap in the marketplace or does so at a level no major corporation could ever dream of.
Another strategy: Aligning oneself with a retail buying group.
Buying groups have a way of bringing this industry together for not only the promise of getting better deals on some of the top products in their particular category—though that’s, understandably, one of the biggest benefits for store owners. However, in addition to that, buying groups offer members top-notch education, the ability to network with and learn from some of the top minds in retail, and—maybe most important of all—share their battle stories with other retailers who are likely in a very similar situation to their own.
We recently approached the top executives in the space to let them do the talking. For our annual Buying Group Roundtable, we turned the tables around on those execs and posed some questions around their benefits, what they’re doing in the area of education, and what retail trends and challenges they’re keeping an eye on for next year.
Here’s what Tom Hickman, President and Chief Member Advocate of Nationwide Marketing Group, had to say.
Dealerscope: What are the core marketing and sales strategy messages you are communicating to your membership this year? What should they expect, coming into your meetings – and what messages do you most want to be their main takeaways?
Hickman: Our marketing and sales strategy hasn’t changed. Our biggest push the last nine months has been getting the membership engaged in digital, making sure that their webroom is as good as their brick-and-mortar showroom. We have 5,500 members and a lot of them are in different states of digital savviness. We need them all at a minimum to understand digital marketing and what it means to have a real presence online, including carts, so they can compete long term, but at the same time, making sure they’re doing the blocking and tackling that kept them in business for years – in some cases, for a hundred years or more. The right selection of high-end products, the most educated sales force and the best-possible services to beat big box.
That’s our mantra, always has been, but our push is in the digital space with the acquisitions and investments we’ve made. And everybody’s moving in that direction – for good reason. But you can’t get so focused on it that you forget everything else – like category diversification, upselling, selling warranties, doing the right things on consumer financing, and all the other parts of business that make you successful. You can’t get myopically focused on digital and forget all those other things like delivery and installation, which are super important for our channel as well.
Despite the many CE/appliance/CI buying groups within the industry, there are dealers and integrators out there who are still unaffiliated with a buying group - or there are those who might be looking to change their buying group affiliation. What’s your elevator pitch (if any) to them as to why belonging to your group would make the most sense for them?
We have a strong commitment to having the best people in the business. We invest more in the independent channel. We have 60 field people doing 6,000 consultations a year - very intimate from our side – a lot of touches. We consider our best-in-class people and leadership to be the key differentiator for us. We’re in the business of giving back time or money to dealers. Everything we’re working on, whether marketing or business solutions, is driven to make their life a little simpler, to give ’em more time to spend with that customer on the floor. Whether it’s rebates, white-glove delivery, or the training academy, they’re designed to drive their bottom line.
We are heavily committed to keeping them on the front side of digital and what matters. We want to clear all that smoke, and share the facts, and talk results - and that what matters is conversions and what’s really working.
Lastly, scale in business matters. And we’re 5,500 retailers, 14,000 storefronts – bigger than Lowe’s, Sears and Home Depot combined, and we have to mobilize behind that number to reap the benefit of being able to compete against those guys.
What category or categories hold the most profit potential for your membership? Is that different from last year – and if so, how?
Appliances are still our bell cow. And CE is in a really good place right now for us - our mix of OLED and high end is extremely good. There were years, frankly, when we had some [members] abandoning that business, and were at the bottom of HD, before OLED and super-premium and higher price points became more prolific. We now have dealers getting back into the CE business, which I think is great. Is it the most profit? No. But we don’t have dealers who are afraid of it any more, either. You’ve got high-end products from Sony, Samsung and LG that are aspirational - $1,500 and $2,000 TVs, and our guys are doing very well. Always, Q4 will be good for TV.
Anything that changed a lot for us since last year? Probably bedding – bed-in-a-box online is gaining, and our dealers are going to have to change the way they look at bedding, no doubt about it. If there’s one category that looks most different than 12 months ago, that would probably be it.
In hot categories, we’re gaining steam in connected home and Google hardware devices. We sold 23,000 Google minis in 46 hours at the recent show. That and our Google partnership will be a huge opportunity with Doug [Wrede] and his team.
In what areas will members need the most help from you next year – and how is that different from last year?
The biggest thing right now is, they have human asset issues. Finding good people across the business, whether delivery drivers or service techs; we really hit a wall in terms of their human capital needs and desires. In some markets, they’re almost in bidding wars for talent, and also in some cases, salespeople – because everyone’s doing well right now… They’re just paying more for talent, and they’re having a harder time finding it.
There’s no easy answer. But I think the biggest opportunity for us is on the service tech side for appliances and electronics. There may be an opportunity for us through education, and we have a team that’s looking at that right now.
It’s a double-edged sword of everything going really well – costs go up. Used to be that you were worried about laying off people; now, they’re paying more than they used to for a delivery driver, and can’t still get them. It’s rather unique. It’s not an actionable thing, like tariffs, or capturing Sears business. This one’s really a challenge –but human issues are always the toughest.
What marketplace issue or issues do you think will influence your members’ businesses the most (some possibilities: the economy, tariffs, the housing market, the results of the midterm elections, etc.) – and why?
I think the economy is going to be fine. Everyone has their opinion on tariffs and higher prices ultimately get passed onto consumers. Is anybody in our value chain a fan of tariffs? No. I think that’s going to work itself out, though. The housing market has not cooled off - they have raw-materials costs problems and human problems as well – but demand is strong. I know where I live, it’s as strong as it’s ever been. Is it going to cost more? Sure. We’ve been in stagnation for a while. What we’re feeling now is the catch-up. The economy’s strong, housing’s fine, I don’t think the midterm elections will have the power of influence like a full-blown presidential election. If you’ve got the economy in a positive situation, and unemployment, and if consumer confidence is pretty high, and the housing market is strong, and there’s some downgrade because of midterms and tariffs – if those are headwinds, I still think we’re going to have a very good Q4.
Map out the rest of the year for your part of the group – will business be up or down, about how much either way, and what factors will most profoundly influence the outcome for members?
There are still quite a few months to go. But in appliances, we’ll be up close to eight to nine percent, and in electronics close to 13 or 14 percent up. If we have one miss, we would have expected to be further up in bedding than we are, and we’re going to beat the market but we’re going to fight to be over last year about three or four percent.
Don’t forget to check out our other 2018 Buying Group Roundtable Q&A’s. Here’s the entire rundown: