Getting the Goods on Buying Groups
GLIKES: Competition is always very brisk in our business. We used to have too many specialists in the market; now we have too many big guys selling the brands. Our biggest competition probably is the fact that others can out-shout us—that their messages are louder, clearer and more frequent. We don’t get as many ‘at bats’ as we should, and I think our problem is raising the visibility of specialists in the marketplace. When people know there’s a choice, we do fine. When they don’t know there’s a choice, and they think that the Big Five are the be-all and end-all, then we have a problem. Prices are almost always the same. The biggest change is that some major vendors realized that they can get away with club business, and it’s less expensive for them. That’s a pretty dramatic change. Clubs now sell pretty good brands, as a rule. But consumers make buying mistakes because they absolutely get no information out of clubs. Zero. There’s no salesperson component, period. Do they get a slightly better price? Possibly. Do they buy the wrong product? A lot of times. What will happen will be that the consumer will wise up. Manufacturers will try to sell everything out of every door they possibly can. The market discipline has gone away, and they’re basically trying to scramble to keep their factories busy and increase their sales. As a result, they have direct sales forces that call on the likes of American Express and corporate companies, sports stadiums directly, hotel chains directly, internet and the internet piranhas, clubs, the Big Five—it’s brutal. That’s why we don’t sell product any more; we sell services. We sell solutions.
TRAWICK: It’s not affecting our membership. We’ve been facing a lot of competition for a lot of years. We’re large enough to realize that eventually everyone who has a storefront will possibly have appliances and electronics. We’ve been competing with the Best Buys and the Circuit Citys and the Home Depots and I can say that our electronics and appliance numbers growth is outpacing industry numbers, which leads me to believe we’re getting a larger share.