For more proof of Nationwide and its members’ technological leadership, look to the group’s recent deal with AT&T to offer smart home services and introduce the Nationwide Connected Home division.
Doug Wrede, Nationwide’s merchandising CE vice president, who takes over appliance merchandising this month, said after PrimeTime, “The AT&T partnership [this spring] was part of several things lining up for us. We were able to package the AT&T [internet, Wi-Fi and wireless] opportunities and launch our own Smarthome Division at PrimeTime. To do it you need the competencies we have in electronics and appliances. Connectivity [between those products] is already there. What we needed was a way to bring it together. Enter AT&T, which has been a great fit.”
Lee McDonald, Nationwide’s new business development director, who takes over CE merchandising from Wrede later this month, explained that at PrimeTime the group broke its original launch for the AT&T program signing 220 dealers, representing over 300 locations, who are signed up to sell the entire suite of AT&T products and services.
“The response from our members has been overwhelming. In addition to our record-setting sign-ups at this show, we also trained and certified more than 100 of our members’ front-line salespeople through our exclusive AT&T Champion program,” McDonald said.
Wrede explained that while, “It’s wonderful to have all these connected devices, but if you can’t bring all these devices together without the right Internet provider to bring them to life, consumers won’t get the full connected home experience. That’s why partnering with AT&T makes a lot of sense for us. AT&T will be a pipeline into our customers’ homes and offer Internet services as a smart home package.”
He added, “If you think about 5G coming down the pipeline and what 5G will be able to do, AT&T being a leader in the wireless connected space will enable us to offer 5G. It will also enable us to sell electronics along with kitchen appliances that are connected and bring the that whole story together.”
In addition, Wrede noted that the AT&T relationship will enable its members to “reach a younger demographic, it will bring younger customers into our stores and increase foot traffic by being able to provide broadband and smartphone services and offer our smart home initiative.” It makes Nationwide and its members “well positioned to be one of the leaders in the smart home space, not that others won’t figure it out too, most likely Best Buy. We will be one of those leaders that have figured it out first.”
What Nationwide has also figured out is how to be a profitable market leader in large screen 4K TVs. Discussing the current 4K market and the holiday season, Wrede said, “Black Friday will be Black November,” and that as one supplier confided to the group, “Black Friday will be as aggressive as expected.”
He noted that while the overall TV market for the industry is down 3% so far this year, Nationwide’s TV sales are up 11%. When it comes to the big screen 4K TV market, Wrede stressed that “technology is important to the independent retail. We want to excel in [product] mix and [strong profit] mix. OLED is 39% of our 4K TV sales [in dollars] which is a great selection of premium technology. We are outpacing the industry by 35%.”
Nationwide’s average selling price, ASP, is $888, “while the industry is at $369. We are excelling in large screen TV sales and technology with our growth in 60-inch to 70-inch and larger TVs.” Wrede added, “In the 70-inch and larger space we are outpacing the industry by 24 points, with 39% being sold by us, while the industry [sales mix] is 15%.”
And some Nationwide members have already begun to embrace 8K TVs via a program with Samsung that provides incentives for dealers to carry those sets. “We had quite a few dealers opt into the program because it’s important to showcase the latest technology in the independent channel,” Wrede said. He said that in dealer testimonials some consumers bought Samsung 8K TVs because of the picture even knowing they can’t get 8K programming now.
“Meanwhile other customers have conversations and buy a [4K] OLED or QLED from Samsung, because they are inspired to spend a little more money due to the [8K] demos at the store. It’s a great strategy,” Wrede said.
In discussing the TV business, Wrede related a goal that Nationwide and its members seem to have reached in the large screen 4K TV business, and possibly in the new smart home category, which is, “You have to sell technology at a higher price and get a higher margin. You can make a little money in this business. You can’t leave it on the table. The electronics business does make it difficult to collect your money. But if you collect it, you can make a good profit.”
Wise, forward-thinking words indeed, that have eluded many at retail and at the supplier level in this industry for many years.
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