i3 | December 28, 2018

How to be an Independent Fish in the Pond of Mega-Retailers

Steve Smith

The holiday shopping season is critical to the success of consumer technology (CT) suppliers and retailers. When many consumers think about buying tech, Best Buy, Amazon, Walmart and the mega-retailers that dominate the industry’s sales often come to mind.

But privately-held regional retailers and custom installers are thriving today. They provide consumers with good value, including delivery and installation if needed. And they provide their suppliers with a distribution channel where their midrange to upscale products can be demonstrated, explained, installed and sold at profitable price points.

Three executives with leading regional CT resellers contributed to this edited “virtual” roundtable to explain the role of independent retailers and installers:

Eddie Maloney, president of Cowboy Maloney’s Electric City, operates a 13-store electronics, appliance and furniture business based in Jackson, MI, with his brothers Con and Johnny. Founded by their father, CT Hall of Famer John “Cowboy” Maloney in the 1950s, the company sold the first color TVs in the 50s, then years later sold DirecTV — Sirius’ first car audio system — and DishNet.

Walt Stinson, CT Hall of Famer and co-founder of ListenUp, founded in 1972 in Colorado, helped to introduce CD players in the U.S. Known as an AV and control systems installer and designer for commercial and residential markets, ListenUp is also an upscale brick-and-mortar and e-commerce retailer that operates five hybrid custom design showroom/retail locations — four in Colorado and one in New Mexico.

Ben Willis is executive merchandiser with Queen City Audio Video Appliances, a family-owned retailer that has been in business for more than 65 years. It has a similar mix of products as Cowboy Maloney’s and operates six stores in the Charlotte, NC, area.

What do independent retailers provide to consumers that mega-retailers don’t?

Willis: Clarity. The average consumer is still very confused about 4K, 1080p and the like. So, the consumer comes in, sometimes they will buy something else or just look around. They are afraid they will make a bad decision. We train our team on the features of every product in a category. [Qualifying the customer] and providing the right solution is critical to us. And you need to provide ontime delivery and installation. We provide a tremendous mix and support premium products versus mass commodity products. If you show consumers the differences they can step themselves up to a better-quality TV. It is hard to see the differences between a $399 55-inch TV and a $1599 model online.

Maloney: Our sales associates are very knowledgeable. We provide them with intensive training three or four times a year on technology and product features. We explain to our customers why the same size TV is $499 versus $1499. And we can match pricing from Best Buy and Walmart as well as provide quick delivery and installation. Online retailers can’t match us based on service. We also do a lot of local advertising, internet ads and TV in our markets on a consistent basis.''

Stinson: The big difference is services. Mass merchants focus on selection and price. We focus on quality-curated products, services and system design. We tend to focus [on customers] who are getting into a project and will have labor attached to it. That is usually a higher-ticket sale involving products at the top end of a manufacturer’s line. Our customers appreciate getting the right product. While we take for granted the differences between OLED versus QLED or 4K versus non-4K TV, consumers struggle with it, versus our career installers and salespeople who live and breathe the technology.

Industry executive Joe Clayton once said if a retailer understands the price, volume, mix and the consumers’ wants and needs, you can pretty much give them what they want. Is that still true?

Willis: There is no question that qualifying the customer today is more important than ever, to find out what they want and need. We have to help determine what their expectations are. A vast majority of consumers who are disappointed with their electronics don’t realize what they were buying. We need to help consumers make the right decision for their needs. Consumers are wary of making an incorrect decision, so sometimes they’ll make no decision. You need to be involved in a conversation to find out what they expect and need.

Maloney: A lot of our customers want a face-to-face meeting for our sales associates to show the differences between the technologies we sell. Millennials like to go to brick-and-mortar stores to see what they like and then order online. The ironic thing is sometimes millennials buy online and try to ask us to exchange what they bought [from an online retailer] for something we have in our store. That happens more than you would think. Our big thing is that we can guarantee prices [on electronics] with Walmart and Best Buy. And most importantly, if a customer is in our store we can describe the features of the product, tell the story and explain it.

Stinson: If consumers want a less complex item they will go online. But when consumers go to brick-and-mortar they go because they are confused and afraid to make the wrong choice. Salespersons must guide confused consumers. Sometimes they can make an incorrect decision online. That’s why manufacturers still need strong brick-and-mortar distribution, as well as online. For many customers this is a complex decision and there is a lot of value for them to speak to an expert. As for our online sales, we work closely with higher-end brands that need to be online but do not want to undercut [pricing] for their brick-and-mortar distribution. We want a healthy ecosystem, we want to perpetuate it and are very concerned about it.

How do privately-held retailers and installers contribute to their communities?

Willis: Many studies indicate that plenty of dollars go back into local communities from independent retailers. We think of ourselves as a retailer with a conscience. We provide technology like TVs for local [charity] events. And we try to contribute to our local communities and hire locally, especially since we opened two stores in the past year.

Maloney: We do as much as we can to make local charitable contributions, be involved with the local Chambers of Commerce and get involved in city programs where our stores are located. Cowboy Maloney is built on relationships. When it comes to recruiting and hiring, if we see a sales associate that shows real potential, we give them extra training and responsibility to make sure they grow and continue to be better than the people down the street.

Stinson: We have a great story based on our success in the industry and community involvement. One of our vendors gave us a “career builder” award for training people who have left us yet remain in the industry in key positions. Our company policy supports non-profits in the performing arts for the public to get involved to experience better sound in live music performances and support local musicians. We provide sound, video and overall tech support. It is important for local companies like ours to remain healthy to provide good jobs and tax bases for the communities we serve.

November/December 2018 i3 Cover Issue

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