Keeping Up
Maintaining a strong line of communication between vendors and retailers has become more important than ever, Kelly says, given how fast technology behind most products move today. Innovation doesn’t come in small increments anymore.

“Today, with all the new innovations in electronics, Web-based refrigerators connected to the Internet with screens, everything you can think of ... we must keep improving those communications,” Kelly says. Innovation is occurring in the appliances sector at a rate five times faster than traditionally.

At the same time, the main source of information about many of these innovations for consumers – the salesman – is becoming an increasingly rare sight on the floor of many large national chains. Kelly says most of the big-box stores have exited having highly trained and knowledgeable staff in favor of cheap, replaceable employees.

“That’s the advantage the independent retailer has over the big box,” Kelly says, “The big box has decided that they just aren’t going to have salesmen anymore. If you look at the competitors you have out there today ... all of those companies go to market with self-servicing floors. Innovative products need to have people to showcase the features and the benefits.”

The focus on knowledgeable service seems to be paying off for independent retailers, Kelly says. He points to a recent Consumer Reports article that, for the first time in the magazine’s history, found independent retailers were the best place to buy appliances.

New Avenues
Part of NMG’s growth strategy has always been to add new services. Kelly says, recently the group has followed this plan by branching out into two new areas – RentDirect and Specialty Electronics Nationwide.

RentDirect is the group’s RTO division and the needs of RTO retailers are different. Orders need to be filled weekly, and deliveries have to be scheduled much quicker. Even though the product selection is much narrower in an RTO store, the typical RTO retailer needs to be able to ensure there is enough product for its customers.

“He wants to be able to pick up the phone and have the products delivered within 24 to 48 hours.”

RentDirect provides many of the same services to RTO stores that NMG does for traditional retailers, and has become the RTO industry’s leading marketing group, according to the group. It provides inventory financing, marketing, advertising, consulting, training, fixtures and other services.

Specialty Electronics Nationwide is the group’s division focusing on custom sound system and home theater installers. “It is Specialty Electronics Nationwide’s mandate to develop vendor programs that provide enhanced margin opportunities, and therefore ensure the increased profitability of our specialty consumer electronics dealer members,” the group says. “In addition, Specialty Electronics Nationwide supports members with inventory fulfillment solutions, training programs, marketing initiatives, consumer financing, competitive credit card processing rates, health insurance, and even extended warranty programs designed to support custom installation services. It is no mistake that this specialty electronics buying group evolved out of the Nationwide Marketing Group family.”

Because the average custom installation dealer’s business relies heavily on new construction, the recent downturn in the housing industry is definitely a concern. Specialty Electronics Nationwide is reaching out to help these installers find new markets to keep their businesses afloat. Specifically, the group’s partnership with online training firm Bedrock Learning provides dealers with training on retrofitting and attachment. As members, Specialty Electronics Nationwide’s custom installation dealers receive discounts on such training programs.

Passing The Torch
Keeping independent retailers independent usually means passing a family business down to the next generation, but Weisner says not all of them are following this tradition. NMG is working on ways to keep these family stores from slipping out of their grasps and into consolidation or closing.

“One of the [biggest] challenges that we have is that a lot of our dealers are aging out of the business and do not have sons or daughters willing to take over the business,” he says.

Many in the next generation have seen the hardships and headaches involved in running an independent store and have decided to opt out, he says. “Quite honestly, retail’s a little tougher than working in a bank,” he admits.

However, NMG is developing seminars for its members to help them create succession plans that will transfer their businesses into the hands of their children or the most qualified people in the company.

Weisner says the group is also working on financial packages to help retailers in danger of losing their stores from having to file for bankruptcy.

Continual Growth
Evolution has been NMG’s modus operandi since it was created, and Weisner says the group continues to look for new ways to support and assist the independent retailer. New divisions like RentDirect and Specialty Electronics Nationwide are a demonstration of the group’s commitment to be there for the independents in any way possible.

“Anyone trying to knock us from the number one position has to make huge investments to equal what we have accomplished over the last seven or eight years,” Weisner adds. “We’ll continue to grow our operation. We’ve been on steady growth since the year 2000. I think there will be a day where we service 5,000 retailers. We’ve built an infrastructure that we think can handle 5,000 retailers, and we think there’s a couple thousand dealers we can bring in.”

For example, he says, the company’s furniture division hasn’t yet tapped the true size of the market. “There are over 10,000 furniture dealers in the nation, and we serve about 1,000 of them,” Weisner says.

He says joining a group like NMG would be the best move for any independent retailer to make, given the multitude of services it provides.

“I think there are a lot of independent retailers that do not belong to a buying group or a marketing group, so there are a lot of dealers we hope to bring into the organization,” he says.

“A lot of these dealers, in my opinion, need the services of a company like ours,” Kelly says. “Whether it’s our organization or others, I think it is very important that they get connected.

“If they are not connected today, I think it is a fatal mistake.”