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Nationwide Banks on Connected Home, Premium 4K UHD TV in Changing Market

Nationwide Marketing Group’s recent PrimeTime Convention in Las Vegas included a plethora of vendors, panels and discussions in four days.

Nationwide Marketing Group’s recent PrimeTime Convention in Las Vegas included a plethora of vendors, panels and discussions in four days. This year, it wasn’t a surprise that premium Ultra High-Definition (UHD) 4K UHD TV was a key growth category in the group’s consumer technology sales, which constitutes 25 percent of the $15 billion in annual product volume (the number includes service and labor).

But its exclusive group deal with Google and Nest – a popular smart thermostat – plus the organization’s expertise in major appliances, bedding and furniture, is providing the 1,300 or so technology dealers at PrimeTime and all 3,800 Nationwide members with a tremendous opportunity to capitalize on the connected home market.

Enter the connected home

Doug Wrede, consumer electronics director of Nationwide, said that the PrimeTime show’s programming “was complimentary to our business in the back half of the year. It will help [dealers] now and help them through the balance of the year with margin enhancement opportunities. Tier 1 TV did well. We also launched a connected home – I’ll call it version 2.0. We are trying to get our guys to embrace the connected home, how it can help with repeat shoppers and installation. There are a lot of opportunities for us between the TV business in tier 1 brands and connected home. We have been driving the connected home now for three shows [since March 2016] explaining to them connected home and why they have to be in it.

“The connected home will grow very quickly during the holidays,” he noted. “It will be a promotional category. It is already growing in double-digits, year-over-year, in revenue. It will be a $490 billion business by the end of 2019.”

Wrede explained that Nationwide saw the connected home market last year “as a very big market opportunity and the one thing you would hope for is to pick the best partner and leader in the industry. We are proud to announce that Nest and Google is an exclusive group program for the Nationwide Marketing Group. We chose Nest and Google, and they chose us.”

Google and Nest deemed Nationwide, “A specific channel of business, a ‘protailer,’” Wrede said. “They called us a protailer for the independent regional channel. And we have been running full steam ahead,” he said. With Nest comes ‘Works with Nest Brands’ categories, which are “all offerings that we want to drive in the connected home space.”

At the show, Nest and Google representatives built a connected home booth staffed with Google employees. Dealers entered the home “through a front door and were greeted by a Nest outdoor camera and Philips lighting. Then you were brought over to a living room space with a Google consultant and there was a display of product offerings. You could experience the Nest Wi-Fi hub, the Nest Protect smoke and carbon monoxide detector, Google Chromecast and Philips lighting,” Wrede said.

Whirlpool at PrimeTime

The display at the Nationwide show was “the ultimate experience,” in part thanks to the outdoor audio, video displays and a kitchen where Whirlpool staffers explained the features of connected home appliances, Wrede said. “You know you’ve made a great statement when Google tells you what you guys have done here is better than what [they] are doing themselves,” he said. “Based on the reaction we have gotten from members, Google and Nest feel we are on the right path.”

The added expertise that Nationwide brings to the connected home is that its members not only sell consumer technology, but major appliances, furniture and bedding. As Wrede explained, “We are creating opportunities for all the categories. Even if you are a furniture and bedding store, the connected home is still for you. If you are an appliance-only [dealer], the connected home is still for you. We have a bedding member who brought in Nest Protect. If you bought in a mattress for $1,299, you got free Nest Protect as part of a marketing campaign.”

As for its major appliance expertise, with Whirlpool, GE, Jenn-Air and Bosch, “embracing connected home in its early stages – this is something [Nationwide dealers] can’t run away from,” he said. The connected home technology “will be integrated in more and more of these appliances. These appliance guys are trying to find out what the connected home business means, and we are getting the appliance guys prepared for that.”

The Future is 4K UHD

TV is still a key growth category for Nationwide, with premium 4K UHD TVs providing not only sales volume but margin. As always, as the holiday season approaches, “Pricing is going to get more aggressive on tier 1 brands. Our guys cater to the mix of super premium and premium TVs,” Wrede explained.

“In the case of LG there is OLED and Super UHD,” he noted. “In the case of Samsung there is QLED.” In addition to LG and Samsung, “Sony is also helping to really drive our premium TV business.” Sony has also been a hit with Nationwide dealers. “What helped Sony this year was the addition of OLED in their lineup. Our guys have really embraced that technology. Sony has done very well with OLED and its premium XBR TVs, have done very well with our group. Those three brands are really driving our business,” he added.

As always, ‘Black November,’ as Wrede called it, is a concern based on “pricing, and how quickly the bottom is going to fall out and race to zero. That is a vertical challenge for all [product categories] across the board.”

4K UHD at PrimeTime

The competitive landscape for Nationwide dealers has changed, with the departure of hhgregg and the slow demise of Sears. Wrede said that hhgregg and Sears’s consumers have always been drawn to an experienced sales force to provide installation and service. “That benefits us because consumers still want that experience,” he said. While he acknowledged that major chains have picked up market share, “Consumers that still want more than what a big box retailer can provide, will turn to us. But we have to make sure those customers know about us. Once we get them in we are confident that our dealers will sell them and give them a world class experience.”

Tom Hickman, executive vice president of Nationwide calmed any storm Amazon – retail’s biggest competitor – might cause. “Amazon is a formidable competitor, and we never sleep on competition, but it is no more formidable than Circuit City in its heyday, Best Buy in its heyday and now in its resurgence, and Sears when it had 30 percent or more of the appliance business,” he said.

Hickman added, “Our members compete every day and crush on service. That’s our mantra. Our guys are scrappy and are almost guerrilla-warfare retailers. They have survived macro and micro economic and competitive changes. With all the handwringing about Amazon, Whole Foods and Kenmore, our guys have to go to work and do what they can do, which is provide a world class experience when you shop.”

Steve Smith was the longtime editor-in-chief of TWICE and is a member of the Consumer Technology Hall of Fame.

Steve Smith