i3 - May/June 2017 - 47

By Steve Smith

Business

R E TA I L ST R AT EG I E S

Larger Role
for Dealers

 S  

ears Holdings
said there is
"substantial doubt"
about the future of the
company that owns the
131-year-old iconic department store retailer Sears
and the mammoth discount
chain Kmart.

Let that sink in for a moment.
Sears was the top major appliance
retailer for decades, and among
the top consumer electronics retailers
along with Kmart. Both chains scared
the heck out of independent retailers
30 years ago due to their sales clout, and
in Sears' case, the ability to deliver and
service major appliances and electronics.
The easy answers for the situation
with Sears and Kmart include: Walmart
and other chains hit better price points
and a poorly executed ecommerce strategy allowed Amazon to hurt it badly.

Richard Levine/Alamy Stock Photo

Room for More Than Amazon
But other retailers, both privatelyheld regional and local operations,
are making a profit today. The reason
is that unlike Sears, Kmart, and for that
matter hhgregg and RadioShack, they
took on new technologies that they could
explain, sell and install, learned digital
marketing, improved their logistics,
emphasized profitable sales and supplier
partnerships, and embraced new demographics, realizing that millennials are
turning to local retailers after researching
home products online.
Ironically for years independents
embraced the Sears model of expert sales
people, selection and the ability to deliver
and/or install products, some sprinkling
in Kmart's traditional price-driven merchandise into their mix to be competitive
and garner traffic. Best Buy's Founder
C TA . t e c h / i 3

Dick Schulze said when his chain was
Independent retailers have improved
expanding nationwide that he wanted it
their operations and have the buying
to become "the next generation's Sears"
clout, when combined with fellow local
for home products.
and regional dealers in buying groups
Best Buy is thriving again because
like these, to be national players
it revamped its operations, improved
in electronics and appliance retailing.
its online sales efforts, and embraced
A decade ago independents benenew technologies in electronics and
fited when Circuit City exited the
appliances. And most independents are
major appliance business and dropped
now part of national buying groups, which its commissioned sales force. By the
provide product pricing as
time it closed, indepengood as national chains or
dents picked up electronecommerce sites receive and
ics market share also.
often require the organizaBut most of its volume
Other
tions that join to provide
retailers, both eventually found its way
logistical and distribution
to national chains.
privatelysupport; educational semiIndependent retailers
held regional will not make that mistake
nars - whether it's about
and local
new technologies or digital
again. They along with
operations,
marketing; online resources
Amazon, Walmart,
to build, update and mainLowe's and Home Depot
are making
tain sites and check SEO
a profit today. are poised to take Sears
performance and provide
Holdings' market share,
video content for their sites.
as well as the volume
Two of the country's largthat RadioShack and
est electronics/appliance buying groups -
hhgregg have left on the table.
in terms of membership and buying
More importantly, with the improved
power - are AVB, with 4,500 members
operations of independent electronics
and $17 billion in volume, and
and appliance retailers, this channel
Nationwide Marketing Group, with
can be a major player in the connected
3,500 members and $15 billion in annual home as IoT developments emerge
volume. Each group has its own specialty
and become embraced by consumers. n
electronics division, AVB's ProSource and
Home Technology Specialists Nationwide Steve Smith is editor at large of TWICE
(HTSN) with Nationwide.
and was its editor in chief.
MAY/JUNE 2017

47
http://www.CTA.tech/i3
i3 - May/June 2017

Table of Contents for the Digital Edition of i3 - May/June 2017
