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for consumer electronics and home appliances.
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since 1924
ifa-berlin.com
The global innovations show.
IFA-Contact:
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SEPTEMBER 2014 RETAILOBSERVER.COM
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holiday shopper. There is significant volume being done during
these promotions. So we need to take a step back and manage our
margins over a longer period of time. We can't afford to live or die by
the daily ticker. We must manage our profits on a longer curve. If you
take a 30-day snap shot, you will have several days where you are
on promotion, and a majority of days where you are not. It is these
off promo days where the profits can be maximized. If we utilize the
manufacturer buy-in to our advantage, we buy right for the 30 day
period and utilize these values to remain profitable on promotion,
while amplifying our off promo profits.
BLENDED MARGINS
This concept is an accepted financial practice called blending
margins. In today's current retail environment, it is imperative that we
manage and maximize every consumer interaction. We need to
ensure we have our best foot forward when that consumer is in the
market for an appliance. We cannot afford to be higher than the
market at retail. The customer must feel that we offer at least the
same value as others in the market. Unfortunately, this "value" is
most visible as price. If we are offering the current market price on
product, we need to buy smarter than we have in the past. Utilizing
a Go to Market strategy that is succinct will help you not only buy
smarter, but enable your retail sales people to maximize the profit
opportunity with each consumer.
LOOK AT THE BIG PICTURE
The appliance business is tougher today than it ever has been.
There are more retailers fighting for fewer consumers. We must be
able to stand and fight when the market gets tough. By utilizing a
blended margin strategy and taking a step back to look at margins
over a period of time vs. daily, the profit picture becomes sharper.
Don't get me wrong; we believe there are still challenges in this
wholesale/retail promotions cadence. The front side, opening
margins have not been acceptable and we need a clearer path to
profitability. But the reality is, we cannot afford to run for cover
during holidays in hope to save margin. We need to own the
consumers during the holiday period as much as we need them
outside of these windows.
The only way to do that in today's environment is to manage your
business from a longer-term view. Manage your plan to sell (D.E.S)
with tighter reigns. These tweaks to your business outlook will
allow you to weather the storm while gaining additional consumers.
This process will help you buy smarter and compete tougher in
today's market!
Patrick Maloney is the Vice President of Appliances for Nationwide
Marketing Group, a leading buying and marketing organization for
independent retailers.
To learn more about new ways to grow your appliance business or
the many benefits of joining Nationwide Marketing Group, go to
www.nationwidemarketinggroup.org.
RO