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Nationwide/AT&T Deal Shows Independents are Embracing Change

When personal computers hit the consumer technology market in the early 1990s, I asked the leader of one major electronics/appliance retail buying group if his members were going to sell PCs. Laughing, he said, “PCs, I’m having problems with some members carrying a proper lineup of TVs!”

I received similar responses when I asked buying group leaders and their members about carrying smartphones over the past decade. They usually said there was little profit in smartphones and that carriers dominate the business.

But, this year one buying group jumped into the smartphone business, Nationwide Marketing Group with its partnership with AT&T, which it announced at its “PrimeTime” meeting last month in Las Vegas. 5G became a buzzword last fall since it will dramatically affect not only smartphones but delivery of content via mobile, vehicle and home devices. 

But it is better to hear what Doug Wrede, vice president of Merchandising CE of Nationwide, had to say about the decision to make a deal during a recent conversation which occurred soon after the group’s recent show.

“We are happy and proud of the partnership with AT&T. When we began to talk with AT&T, we both saw a couple of opportunities that were on the table. There was a B-to-C, and a B-to-B opportunity,” Wrede said. 

The B-to-C opportunity involved smartphones but really centered around the connected home, Wrede said. “If consumers are really going to bring to life the connected home in their own residence, they need a pipe, they need a conduit, they need a solution, it starts there before their devices come alive. AT&T presented us with a broadband solution to enable our dealers to provide a broadband gateway into consumers’ homes.”

He explained that once consumers have broadband, the devices that they already own, or will soon purchase will tap into the system, and those devices “will have a chance to succeed in the customers’ homes to their full capabilities. AT&T from the broadband perspective gave us that gateway for appliances, kitchen, electronics, you name it. That is the starting point.” 

Under the AT&T deal Nationwide members can sell a DirecTV package, mobile handsets and mobile plans which are “A one-, two-, three-punch if you will. But [the agreement] was really about the first piping in 5G or broadband, it was about bringing in the consumer solution if you will into the home.”

The B-to-B basic plan demonstrates the capabilities of the interactive devices they have for sale at their stores. Wrede noted this part of the deal allows “Our dealers to work with AT&T within their own footprint and figure out how they can bring these products to life [with broadband] on the sales floor.”

He added that while, “B-to-C was our focus, B-to-B is certainly an opportunity as well. We left [the PrimeTime show] with 150 plus dealers signed up for the program, which exceeded expectations.

Consumer technology is just one part of Nationwide’s business, with major appliances another big focus. With more appliances becoming interactive devices that can be vital cogs in the connected home independent electronics/appliance retailers have long been considered a valued channel to sell and explain these goods.

As Wrede pointed out, Nationwide with its wealth of independent retailers in both categories, is well-positioned to take advantage of this technological change. Progress has been made, but he believes more education is needed for consumers and retailers as well.

“We are making significant progress, but not fast enough. There still is a bridge to be gapped when it comes to the connected home when it comes to CE and appliances. The products are starting to become more married in the home and more compatible in the home. The electronics guys are more open to quickly embrace the technology than the appliance guys.”

He said, “Appliance retailers are slower to adopt but will get there. In some cases, they won’t have a choice. Kitchen packages will be connected. They have to be connected, or else they won’t be able to show or demonstrate the product features effectively. I would say there is more progress to go, but we are making progress,” he added.

While Nationwide has its own custom installer group, Home Technology Specialty Nationwide (HTSN) and an alliance with the Home Technology Specialists Association (HTSA), which involves major multiroom and multi-panel home installations, some appliance retailers are concerned about the margins in the do-it-yourself (DIY) connected home category.

DIY margins “are not quite what the appliance industry is used to. And that’s fine. They should have high expectations. But what our members need to do is sell a whole basket [of products and services] in this area. It is an area that we can grow in the future.”

Nationwide and its members are on the right road with its deal with AT&T. It will be interesting to see how successful their combined efforts will be. 

Steve Smith