Retail Observer

RETAILOBSERVER.COM MARCH 2018 52 T oday, the retail industry is dealing with our own bit of "fake news", but the myths are easy to dispel. We've been hearing about the demise of appliance retail for several years. We have heard that ecommerce will triumph over brick and mortar. The appliance manufacturers have supported promotional pricing that would seem to assume that consumers only purchase during certain holidays. And as such, it's been suggested that independent retail will cede share to big box and online giants. The simple fact is, this is untrue. If we look at the numbers, especially appliances in 2017, the industry saw a modest unit gain of around 3.5% . Meanwhile, independent appliance retailers grew at a rate almost 3 times the industry. This industry growth has been compounded over the last 3 years at about the same rate. How could that be possible given the black clouds that the headlines have predicted? How could independent retailers outperform the industry? Let's analyze the basis of the negative news. Sure, there have been store closures across the country. But when you truly look at the numbers, according to the National Retail Federation (NRF), almost 50% of these closures have come from national chains. A small number of retailers have closed a large number of stores. The sheer volume of stores closing is great for headlines, but it doesn't speak to reality. In fact, the NRF goes on to state that for every 1 store that closed in 2017, 2.7 stores opened. Additionally, many big box stores are restructuring or experimenting to create a small store feel. Take Walmart, as an example. Once the poster child for the large footprint format, Walmart has slowly been testing and rolling out its "Neighborhood Market" stores across the country. Why would the world's largest retailer suddenly change its go to market strategy? Because these small store formats are being created to react the demands and needs of today's consumers. There is an important message to be gleaned from this. Big Box stores are trying desperately to capture what independent retail already has (and has had for decades); a local footprint that caters to an increasingly educated and demanding consumer. The big box stores are trying to evolve into a small- town store. The good news is, independent retail is already there. We have educated sales teams that create an immersive buying environment for consumers. This environment is also advan- tageous to our manufacturing partners. Independents have an average selling price that is $ 300 above the industry. Why? Because our salespeople are selling consumers on the benefits a product has and not simply the price of a product. We are nimble and can react to changes in the local marketplace. This is important because we don't need to change to become "best- in-class" retailers, we are the North Star of retail. What we need to do is maximize this position to negotiate better programs and demand exclusive offers from manufacturers. They need our premium customers to drive their investment in technology and features. The industry cannot survive on opening price point products and/or huge discounts to sell features. With that said, independents must remain nimbler than ever before. We have to continue to challenge ourselves to push the envelope in merchandising, marketing and negotiating. We cannot be afraid to change our plan, revamp our advertising strategy, challenge our manufacturing loyalties and take risks that big boxes can't. Our size is our advantage. It has been said, "You have to know the rules of the game. And then you have to play better than anyone else." We know the rules of the game. We just need to stick together and continue to play better than anyone else. With that, I ask all of us to stay nimble! Patrick Maloney, Senior VP Appliances Nationwide Marketing Group Patrick Maloney Appliance Trends RO THE TRUTH ABOUT "FAKE NEWS" Clarifying the current economic statistics of the retail industry

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