Kicking Serious Retail

Consumer electronics retailers are in trouble. Their inventory of television sets gets cheaper every day, and with just 15% margins in video even with newer sets, a retailer can lose his shirt in the blink of an eye, by overordering, or if a spell of bad weather keeps customers away right after a big shipment.

The key is to keep delivering add-on sales on higher-margin products, while boosting customer loyalty.

Here's one clever solution, courtesy of Dealerscope:

DEALERSCOPE: What products or services were most profitable for you in 2007? What new services did you recently add or plan to add?

n Baillio: Services-wise, we’re concentrating on home install—it’s where the future lies. You can’t make a buck just selling panels on walls. You have to be able to attach the accessories—cable, service contracts—things you can make a buck at. If you sell that 50-inch panel and make 15 to 18 percent, you’re not going to stay in business unless you sell the extras that go along with it. That’s just the nature of the beast.

We’ve added personnel onto our home install capabilities this past year, plus some really neat products we’ve put on the floor. Some speakers that look like lamps, home theater products that tie in with football and play upon the loyalties of a customer. I went to a Chargers game in San Antonio and hadn’t been to a pro game in a few years. I didn’t remember how rabid fans get. We now sell sofas and chairs that have team logos on them. You can buy the rugs and the sports memorabilia that go with it, and package all that with the TV—and we run promos whereby you can win a team logo package—a logo’ed couch, chair, rug and the TV, which we will install for you if we draw your name. People spend a lot of money here on their team. So we’ve hooked our wagon to the football and basketball seasons.

-Jason Van Steenwyk