Retail Observer

RETAILOBSERVER.COM JUNE 2022 56 G iven the Russo-Ukraine crisis in Europe, the Great Resignation resonating across America, and countless supply chain issues spanning nearly all categories of goods, you might be thinking, "What could possibly be next?" And no one would blame you, especially after a more than two- year-long global pandemic. As with all things in life, though, there's always good news mixed with the bad. First up, the challenges. There's no question that the butterfly effect from the Russian/Ukranian situation, and the world's subsequent sanctions, have had a massive effect on our economy. Just-in-time installers, who represent a large portion of our customer base, are feeling the pinch in higher gas prices. With carriers increasing their fees, and surcharges left and right, dealers are limiting the products they install to a select assortment and buying deep on those items to ensure that prepaid freight levels are made, and that they have product to sell when customers need it. This all makes forecasting more important than ever. But, as always, there are two sides to every coin. And this is where being in a large buying group like BrandSource, which is led by a well-run organization like AVB, can help independent dealers band together and make some positive changes to combat these unavoidable pitfalls. First, you must be online. Work with your marketing contacts to create an e-commerce strategy within the rules of the vendors you buy from. Not having a transactional cart, and putting "Call for price" in place of an actual retail price may not be ideal, but it is permissible by most manufacturers. (Ask to be sure.) Next, know and appeal to your customer segments. Speak their language and build your strategy around any changes in demographics, spending habits and sales trends. The pandemic caused some real shifts in customer and worker mindsets that you'll need to address. This will probably cause you to reassess the pricing of goods and services and whittle-down unnecessary promos that dilute the cost of goods. Domino's Pizza, for example, has eliminated a lot of their best coupon deals and is shifting the onus for delivery costs onto customers. Last, get to know and buy deep on what you expect will be in high demand. The good news in the CE space is the excellent spate of products that began hitting your shelves this spring. Samsung and LG both bowed-in their new OLED and QLED TVs, followed by even higher-end stuff. A/V receivers have overcome their 2021-22 malaise and have come roaring back into stock, allowing long-delayed custom-install jobs to be completed and letting consumers upgrade their home entertainment systems. And make no mistake, they are spending. Despite the doom- and-gloom prognostications of the preceding paragraphs, Expert Warehouse, the tech distribution arm of AVB, is up by high double digits in TV sales year over year. The new reality of hybrid or work- from-home scheduling for families, workers and students has been like rocket fuel for all manner of home entertainment. Vinyl records are outselling compact discs for the first time in 35 years – to the tune of $1 billion in sales – and TV hardware and video technology has progressed to the point that it isn't uncommon for an average family to have a 75-inch or larger TV in the living room, for a true movie- theater-at-home experience. (And the speakers that surround it have never been better!) Again, these are uncertain times, with unique obstacles for all independent dealers. But opportunity also knocks, if you'll look at your model and make some tweaks. For some, it may mean revising inventory to hold more best-selling products and cut down on deals and price matching. For others, it might mean simply moving away from some of the old ways of thinking and doing business that have been left behind by COVID and other recent issues. Stephen Paczkowski Consumer Electronic Trends THE WORLD IS CHANGING… and thus should we all Stephen Paczkowski is product manager at Expert Warehouse, the tech distribution arm of BrandSource parent AVB Inc. You can reach him at steve.paczkowski@expert-warehouse.com. RO

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