Retail Observer

RETAILOBSERVER.COM APRIL 2014 54 T imes are challenging for Consumer Electronics (CE) retailers as the industry waits for the next "big thing" to replace the flat screen TV, retailers' cash cow for a number of years. Vendors are competing with aggressive pricing and incentives, a race to the bottom leaving little room for retailer margins. Nevertheless, demand for high-performance, lifestyle enhancing CE products is strong, especially by early adopters. Successful CE independents are showcasing their strengths; advice, expertise, customization and installation – and offering the speciality electronics that require them. In today's shifting marketplace, that's where the money is! Home automation. Home automation thrives on the fully assisted sales model, a traditional strength of CE independents. One of our members, a home-automation specialist, spends no money on marketing yet its sales are booming. How? By creating a designated, merchandising area where price-shoppers can compare competitors' prices online with the store's product catalogue and by offering two purchasing options: a no-frills pick, pay and take it home; and a premium à la carte service, with delivery, installation, integration and after-sales service. In the first six months, the store converted 20 percent of its no-frills customers to full-service installations. Customers clearly understand the value proposition so there is no haggling over price on custom installations, and the store generates lucrative, repeat business. Mobile audio. Consumers are looking for multipurpose audio for their boats and off-road vehicles (ATVs, dual-sport motorcycles and snowmobiles) and vendors like JVC have designed small size, multi- audio source head units to fit them. There is profit in selling mobile electronics hardware, and reliable profit in customization and professional installation. Audio and vinyl. Audio sales are up and home audio rooms are beginning to replace home theaters in some markets. Premium multi- channel and premium two-channel audio has returned, as has turntable audio, providing seasoned CE veterans with a new margin opportunity. To encourage consumer interest in vinyl recordings, on-trend CE retailers are selling expensive vinyl box sets by artists like Norah Jones and Mumford & Sons, in vinyl café merchandising areas. Internet-based audio is also growing. Sonos is leading in Wi-Fi audio, soon to be followed by D&M and Panasonic. Wi-Fi products offer CE independents another opportunity to accessorize sales with premium- speaker upgrades and Wi-Fi routers. Smart video. At the Eureka Park TechZone at the last CES Las Vegas, start-ups showcased countless smart apps for all CE product categories, including video. Independents that can demonstrate the entertainment value of these new apps to customers are bound to profit. Customization and installation. Despite the challenges of finding installation specialists, integration, customization and installation is where the money is today. Much of the new technology is complicated. To get a system set up and working is often beyond the skill set (and patience!) of all but the most tech-savvy consumers. Positioning your store as the place that handles all this complexity for customers is the best way to build a loyal customer base – the foundation for continuing sales and profits. Training, training and more training. The fully assisted sales floor is vastly different from even two years ago. Seven out of 10 customers walking through our doors have used the Web to review our businesses and/or our products and probably have as much or more product knowledge than our sales associates. In response, sales staff needs to be exceptionally well-trained. In addition to excellent product knowledge, they need to know how to really listen to customers' needs, build trust and close sales. Showcase your expertise on the Web. Retailers with highly trained specialists on staff are doing very well – in their local marketplaces and beyond. One Calgary CE retailer has been showcasing its installation expertise with YouTube videos that get millions of hits. Not only does this enhance the store's reputation locally, but these videos have been generating business from as far away as California. The key is to show not just the finished product but the quality of the work and the expertise that went into it. RO Darryl Wilks Consumer Electronics Trends Darryl Wilks—Business Development Manager, Western Canada, Cantrex Nationwide. To help member retailers turn their staff into expert selling machines, Cantrex Nationwide and its parent, Nationwide Marketing Group, offer highly specialized, state-of-the-art training courses through their member intranet. Many of these online training courses are bundled with incentives or lead to certification to further motivate staff. HOW TO PROFIT IN THE SHIFTING WORLD OF CONSUMER ELECTRONICS

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