Getting the Goods on Buying Groups
HUNGER: We do circulars on a broad level, consumer rebates and quite a bit of work on consumer financing programs our dealers can take advantage of, thereby giving them a competitive edge. And we’re looking to go to the next level to give them more of an edge.
LAWRENCE: From the dealers’ standpoint, the problem is not being price-competitive; the challenge is footprints in the store. If you don’t have a customer, you don’t even get to talk about it. Best Buy’s out there spending $220 million a year on advertising—how does an independent compete with that? Don’t forget that the average customer shops 1.4 stores and the box stores have about a 30 percent close rate, while the independent stores have a close rate of 70 percent or more. But they have to be able to see a customer before they have the opportunity. Our answer is Brand Source; we’ve created a brand that creates top-of-mind awareness so that we get footprints in the store. That’s the name of the game for independents today.
WORKMAN: First thing, no one can make money selling products. Other than a low-cost model, you must provide solutions to consumers with market basket extras and add-ons like services, accessories, audio—all these things are core to the focus. You also have to challenge yourself with your structure and cost models and your ability to execute those positions. While, in one sense, they’re a solution, managing these things is also a challenge to the retailer.