PRO Group's Distribution Strategy, Product Mix Changing With Times
By Alan Wolf -- TWICE, 1/22/2007
LAS VEGAS — The Progressive Retailers Organization (PRO Group) will launch a series of initiatives this year to better align the high-end A/V buying group with changing industry dynamics.
"We have to evolve and adapt to changes in the marketplace," Dave Workman said during the group's annual International CES cocktail party at Bally's, his first as executive director. "The business changed the day after Thanksgiving and we can't pine for days past. We have to take costs out of our channel, devise new business models, look for new opportunities and think long term."
Among the group's first actions, to be formally announced later this quarter, is a new one-step virtual distribution model that will allow PRO to conduct business with vendors as a single customer. "We'll have one set of forecasts and one set of numbers," Workman explained. "Ship to one, spread to many. This will take costs out and establish PRO as an alternative channel of distribution to Circuit City and Best Buy."
PRO will begin the program with one vendor, a major A/V supplier that will be announced within the next 30 to 60 days.
"We've got to think about this business being very different," Workman said. "Margins were extremely challenged over the holidays and you have to control them where you can. Manufacturers don't keep retailers in business, retailers do."
The 18-member group will also move aggressively into IT-based content distribution including convergence and connectivity products that "bring the Internet to life. No one has their arms completely around this yet," Workman said, "but we have to be great at that stuff."
Despite margin pressures, 2006 was probably the best year in the group's 21-year history, said PRO president George Manlove, CEO of Vann's. The addition of four members — Stereo Advantage, Car Toys, Harvey and Home Theater Store (see p. 20) — helped raise group volume to $2.5 billion, while net sales were up 10 percent and same store sales grew 7 percent.
"It was a good year," Manlove said. "We set an aggressive agenda and were successful in achieving much of it. We've never been stronger or more cohesive, and I'm very excited about 2007."
Joining Manlove on PRO's board this year are Mike Abt (Abt Electronics), Sandy Bloomberg (Tweeter Home Entertainment Group), Murry Huppin (Huppin's/OneCall), Jon Myer (MyerEmco) and Rick Souder (Crutchfield). Walt Stinson, president and co-founder of ListenUp, was voted VP/secretary.
PRO also announced the addition of Ultimate Electronics veteran Glen Rogers as the group's manager for new business.