Retail Observer

RETAILOBSERVER.COM SEPTEMBER 2018 52 A s a lifelong merchant, I have, over my 20-year career, often looked back at some of the big buying decisions I have been fortunate to negotiate. In each of these big buys, I can recall the stress of the negotiation, the push from the supplier, the crunch of the clock to hit a deadline, and the pressures of the open to buy. There is a forecast that is bantered back and forth between the invested parties, and a need to create the sales and merchandising plans that include how and where it will be displayed. The planning always seems to move quickly to price and gross margin expectations. With most of these big buys, the marketing plan had a primary focus. How should we take the big buy and scream the value of brand, product, and price the loudest to drive as many customers as we can to our store or site? As you read this, you will probably start to recall some of your big buys. When I talk about these with other merchants, we all smile and jump in to talk about our biggest wins. In each and every one of these war stories, the wins we remember all have one crucial element that made it a best buy — a sell out! Unfortunately, in pursuit of these big buys, it's becoming harder and harder to align all of the moving parts to make it happen. With the ever- growing importance of online shopping and research, the marketing plans are now not a singular event such as a Sunday ad, or Black Friday tab. Customers are shopping, researching, learning, socializing, and surfing their needs every moment of every day. National retailers are blaring "brilliant" ideas like Spring Black Friday, or Black November trying to recreate the singular event frenzy and traffic over a longer or new period of time. The result is nothing extraordinary, and in the end, this is diluting the excitement and belief a customer has when a real value hits the market. Fortunately for the appliance business, it has been a replacement business for as long as we can remember. According to Traqline reporting for Q1 2018, the top reason customers purchased a new appliance held steadily at 60%: the old one was broken or needed service. That means more customers are purchasing appliances because they are needing to, rather than wanting to. Over the past several years, Nationwide Marketing Group has invested in bringing marketing packages to our members that will drive their store's market awareness via our exclusive Digital Boost campaigns. Throughout all of these campaigns going back to 2015, we have earned over 100 million digital ad impressions with a foundation of digital video and Google AdWords purchases. These campaigns are designed to drive aware- ness in your store's markets, going after the 60% replacement business. We are continually testing, learning, changing and adapting based on the data that all of these campaigns have provided. Recently, something happened to this lifelong merchant, who had always reveled in the thrill of selling out big buys with a proven blueprint of merchandising, marketing, selling and servicing on best brand, product and price value. With one eye-opening test, the concept that the best promo and price drives the most traffic was immediately challenged. In Q4 of last year, between Labor Day and Black Friday we conducted a digital marketing campaign test with the support of our luxury brand partners at Monogram, Fisher and Paykel and DCS. The test provided select dealers a free digital marketing package that targeted specific in-market luxury consumers, and backed it with digital video, AdWords and retargeting efforts. The videos created were lifestyle in nature with a limited exposure to price and promotion. The AdWords purchased were brand, product and dealer specific to the area and ran simultaneous to the digital video display retargeting efforts. The test was to see if luxury brands, promoted away from the national retail holiday events, could drive meaningful traffic to your stores. Here's what we discovered. In a series of four separate campaigns, we started to get a feel for how these luxury campaigns would perform. With nearly a 3x better click-through rate on the AdWords baseline and equally completed view rates of the video, an eye-opening 13% click through-rate started to change our view. It suggested that one of the unknown benefits of the digital marketing efforts was the ability to effectively drive meaningful store traffic and sales with a luxury brand story. It is an exciting time to be an independent appliance retailer. With the rapid changes in digital marketing and merchandising, Nationwide Marketing Group is investing in answering the questions of where and when we should should make our next big buys. The next one may just be the addition of a new luxury brand that takes advantage of differentiation as the way to beat national retail price- screaming marketing tactics. I sincerely hope the next big buy is for a luxury brand that delivers increased average selling prices, profit opportunity, and customer satisfaction. Derek Mattila Appliance Trends Derek Mattila is Director of Appliances for Nationwide. RO CAN YOUR BIGGEST BUYS BECOME "BETTER" BUYS? The surprising data behind luxury appliances as significant sales drivers

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