Wednesday, November 08, 2006

Home Depot horning in on TV sales

CE Pro: Home Depot Begins Selling Plasmas

And for those whose ADD prohibits reading to the bottom of the page, here's the comment I posted there this morning:

I was in the appliance business when Home Depot first rolled out their major appliance department. As expected, there was the usual kvetching and bellyaching from traditional MajAp retailers. And yet, HomeDepot has failed to gain major traction in MajAp anywhere that I am aware of. Their square footage devoted to MajAp is miniscule, their merchandising and cleanliness is *meh* and good luck finding someone in an orange apron who knows jack squat for product knowledge. Fast forward ~five years and the players in MajAp are still doing what they do. Ask a buyer for any of the big MajAp dealers about HomeDepot and he will snort and wave his hand in the air as if to say "Pfft." I would seriously doubt that any traditional CE retailers, from regional chains to the Big Blue Box will feel the heat from this move, let alone anybody in a boutique firm who is reading this website

Expanding further upon that, I do believe that non-traditional CE outlets present a challenge for the more traditional dealers. In my last Christmas in retail, I found myself price matching Toshiba and Sony televisions from Superstore, one of Canada's major grocery store chains.

"Good Lord" I thought at the time "Everybody wants to get in on the act!"

Of course, since that time Wal-mart has become North America's 2nd biggest CE retailer, and is now breathing down Best Buy's neck.

So what do these new entrants into the retail marketplace offer consumers?

  • no-name products from China and Korea with poor durability.
  • apathetic, underpaid, and uninformed sales associates.
  • because the products suck, and the staff don't know anything, the sole marketing plan requires buying the consumer's business by selling mediocre products for cheap, cheap, cheap.
  • because of the prevailing mentality, and lack of skill at selling value, recognized brands end up getting flogged on price, tarnishing once valuable brand images

Sign me up.

Helpful hint to salesmen, business managers, and owners: if you sell high quality gear, present value to the customer (and value can exist at every price point), build relationships so that you have clients rather than just customers, and know what you are talking about, then you can prosper. The minute you start to try to slut yourself out on price alone, you are sunk. If your company is very large, it may take longer for your ship to capsize, but if you are a small boutique, it can happen quickly. Sell based on trust, and on value, and you won't have to care what Home Depot, Superstore, Walmart, or anybody like that is doing.

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