BrandSource and its independent retail members work together to improve operations and provide better choices to consumers.
By Eric Slack
What started as a buying group in 1969 has become so much more for a diverse array of retailers. Today, BrandSource is more of a member services organization that serves retailers of many stripes and helps level the playing field so they can compete.
BrandSource’s roots extend back to a 1969 discussion among a group of appliance and electronics retailers, who saw the opportunity to get better pricing and terms by pooling their orders together. Those southern California retailers teamed up to form Associated Volume Buyers (AVB).
“Our founders got together because they saw they could get better deals from manufacturers by working together,” Chief Marketing Officer John White says. “Now we are a member-owned organization that works on behalf of our members with manufacturers, vendors and suppliers to get better prices, while also helping members to do better business and generate more business in their stores.”
The organization has grown to northern California, the Northwest and around the country, creating 17 different regions and locally managing regional operations to target the products each region sells. In 1994, the group became the first appliance and electronics buying group to sign a national mattress manufacturer, Simmons. This began the group’s entry into furniture.
AVB then began to move in directions that recognized that buying was but one part of the sales process. It started to focus on helping members buy better and sell better, becoming a national marketing group in the process. At the turn of the century, AVB created a national brand name – BrandSource – and gave its members a national identity. It began providing national television, radio, print and Yellow Pages advertising, and it remains the only national group that continues to build its brand to get more customers into member stores.
BrandSource also became the first national group to provide all of its members with an online web page and entered the e-commerce business in 2000. This helped members begin to reap the rewards of online sales.
The BrandSource family includes the appliance and electronics division, and its ProSource specialty custom consumer electronics division. The ProSource division represents more than 500 specialty retailers and custom integrators and boasts annual retail sales of more than $4 billion, making it the largest specialty and consumer electronics merchandising group in the country. A freestanding mattress chain of stores called SleepSource, Furniture Advantage, and the BrandSource rent-to-own division called TRIB are also parts of BrandSource. It is a 100-percent member-owned merchandising group with more than $16 billion in annual retail sales, more than 4,500 independent dealers/members located throughout the United States and Canada, and close to 3,000 branded stores in the United States.
“We are the largest group in North America from volume and membership standpoints,” White says. “Our divisions specialize in areas of business within each vertical to better serve each retailer. We do a little of everything for retailers to help them reduce costs and improve their operations.”
Competing on Strength
BrandSource can negotiate strong programs with manufacturers to keep independent retailer members relevant and competitive in the consumer marketplace. Its retailers have built strong reputations for providing consumers with exceptional customer service experiences and acting as local experts for appliances, consumer electronics or home furnishings.
The organization is able to combine the purchases of all member stores through its $14 billion buying power, allowing the company to provide the best value every day. Its store network includes neighborhood appliance stores, appliance and electronics stores, furniture and mattress stores, floor covering stores and custom electronics specialists. The company remains focused on continuing to grow its membership and brand identity.
“From a membership growth standpoint, in the last few years we’ve grown a lot in home furnishings,” White says. “There is a big opportunity for growth there because a lot of home furnishing retailers are not parts of groups like ours. Home appliance and consumer electronics retailers tend to be part of buying groups. Although we’ve seen member growth in those areas, most of our growth has come in home furnishings.”
Understanding that the retail world and consumer demographics have changed drastically since its inception, BrandSource has placed a great deal of emphasis on responding to modern challenges. For example, independent retailers today face the tough task of attracting millennial consumers and transitioning from traditional brick-and-mortar operations to more use of technology.
“A lot of consumers are up for grabs, and attracting customers is something we focus on more today,” White says. “It is less about the deal from manufacturers and more about how we can help members to best utilize resources such as digital marketing, websites and traditional media.”
In the digital space, BrandSource is engaged in a number of initiatives. There are many more outlets for advertising today, so BrandSource has built a marketing group that manages those efforts on behalf of retailers.
“That offers retailers significant savings vs. using traditional advertising agencies or doing it themselves,” White says. “It consolidates their efforts across a single representative, point of contact and price schedule across the entire footprint of advertising and helping them with design and analytics. We have put all of that together in a single source that works on behalf of our members to get a good return on investment.”
These efforts extend beyond advertising in online settings and include in-store components. BrandSource’s marketing initiatives include digital in-store signage that replicates vendor and dealer content that may be put out on the web. That information, also known as AVB TV, is streamed inside the stores based on what a member sells.
Other initiatives have been focused on financial benefits such as the BrandSource credit card partnership with Citi as well as providing members with wholesale financing for inventory through BrandSource’s captive member-owned financing company.
“We’ve seen volume growth there, as it is a widely adopted member service,” White says. “Additionally, our bulk buying services are aggregating member purchases to improve their price positions in the market. With more goods coming from overseas and the need to purchase containers, we can aggregate retailers together, consolidate the buy, and have products shipped over and split the shipment here once it arrives. That bulk-buy/cross-dock system improves pricing compared with what they had in the past.”
Out in Front
Over the next year, BrandSource will continue to look for ways it can improve offerings to members. It plans to roll out a retail manager system designed to aggregate all information for a business owner around price.
“That will help them keep up with price changes in what they pay for goods, because a lot of things impact prices for retailers and consumers,” White says. “The system will provide information on the best prices on a daily basis. It is a sophisticated system that takes the guesswork out of pricing for the retailer. We will also continue with the consolidation of marketing and advertising services into our internal marketing group.”
Ultimately, BrandSource wants to do everything it can to help its members stay strong and continue to operate profitably in the future. The organization is committed to helping its independent retailer members compete successfully so they can transition into their next generation of ownership and beyond.
“There are many complexities in the channels where we operate, and resources like our consolidated marketing group and retail manager system will make it easier for our members to do business,” White says. “Our goal is to make every touch in our verticals the gold standard for the industry.”