Nationwide Marketing Group responds to COVID, supply challenges

Membership numbers hold up despite some store closings and supply constraints that have forced dealers to seek new vendors

WINSTON-SALEM, N.C. — Early this year, when the severity of the COVID-19 pandemic was becoming clear, more than 1,300 Nationwide Marketing Group member stores closed their doors temporarily during the lockdown.

Some eventually would end up closing for good or leave the buying group, as the complications surrounding the virus, the lockdown, the eventual surge in business and then the severe supply-chain problems proved too much to bear. But, perhaps surprisingly, this end scenario proved to be the exception rather than the rule.

“The word we use — that everybody has kind of used — is we’ve had to pivot,” said Jeff Rose, director of furniture and bedding for the furniture, electronics and appliance buying group.

“Retailers had to pivot and learn how to survive. They had to read government documents and learn abbreviations like PPE and things of that nature just to help them survive.”

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And the same went for Nationwide, he said. It continued as the member services organization it has always been, providing the same buying, marketing and other benefits it provides in a “normal” year. But on top of this, Nationwide had to pivot, too; it had to offer more. It created a COVID task force, for example, to help retailers work through that paperwork for the government loans, among other things. It held its first-ever virtual PrimeTime education and trade show event (which saw roughly three times the registrations of a typical PrimeTime). And it has been working to provide new sourcing alternatives to dealers struggling with supply shortages from their longtime vendors. 

Over the course of this year, Nationwide Marketing Group did lose some members as it does every year to attrition, but it hasn’t been anything out of the ordinary, Rose said. And in fact, member roles today are showing a net gain from where they were a year ago. 

“If you had told us that in March, we would have told you you were crazy,” he said. (Today, Nationwide Marketing Group has more than 5,000 members operating some 14,000 storefronts. About half of the members sell furniture and/or bedding in their stores.)

Mike Derro, Nationwide’s new vice president of furniture and bedding, is about a month into his job, and one of his first duties was helping the first virtual PrimeTime as the organization pivoted. A normal PrimeTime will see 1,000 to 1,100 registrants. “We had over 3,000 people register for the virtual show,” Derro said, adding that nearly 30 of the group’s largest furniture and bedding vendor partners participated with virtual booths. 

“And they saw a great amount of sales,” he said. According to the group, more than 20,000 bedding units were sold over the course of the two-day expo, including 4,000 units during the popular (and modified) Palooza event, in which Nationwide gave members an afternoon to take advantage of limited-time, limited-quantity deals from select vendors.

“Part of that (success) I think was because there are a lot of retailers out there looking for different sources and solutions, and a virtual PrimeTime show was a great opportunity for them to access a lot of companies offering a lot of different product all at one time during a very well constructed program over a two-and-half-day period,” Derro said.

It was the right prescription for the time. And indeed, Nationwide continues to see traffic to the digital PrimeTime space. The site is getting “thousands of hits”  Derro said, so much so that the buying group decided to extend access to the product presentations, training and other materials through the end of November.

Members also have been quick to adopt or enhance their digital games, taking advantage of the toolbox the group offers through partner Retailer Web Services Nationwide’s own Site on Time business. “RWS, specifically with our members, has seen consumer traffic on their website rise over 200% in the last six months,” Derro said.  Online orders have increased 400%.

Site On Time, meanwhile, has seen a 500% increase in online sales over the same period.

“I expect this to carry over into 2021 and thereafter,” Derro said. The reopening of stores at the end of May didn’t really slow the growth as many members continued to invest heavily in the digital space, determined not to give up ground to the giant e-commerce retailers and big-box retailers. 

“I think the consumer’s path to purchase has changed dramatically and probably has changed somewhat forever,” he said. They all start online now, and whoever offers the best experience will get the conversion whether it’s online or during a follow-up visit at a brick-and-mortar store. 

“And it’s predisposed,” he said. “So when consumers come into their location, they’re predisposed to the product they’ve already seen on the website. The sales, the close rates, the average tickets are all rising.”

All of these steps in the right direction are not meant to discount the pressure and struggle member retailers — and most retailers for that matter — are facing to this day. The consumer demand is there, but the product often is not. Some suppliers are cutting off their smaller accounts, or pushing delivery dates so far out in the future that it no longer makes sense for the smaller retailers to place their orders in the first place.

Also, liquidations and sales specialist Planned Furniture Promotions recently warned that some retailers risked digging themselves into a monstrous liquidity hole as the surge in demand collided with product shortages and now price increases, including increases on goods that have already been ordered but not yet delivered. Retailers taking deposits for goods on order could wind up in trouble, PFP said, if they used that deposit money for day-to-day operations instead of setting it aside in a special account.

Asked if Nationwide members are faced with these kinds of problems, Rose said, “the answer is 100%,” but he tried to keep things in perspective.

“The vendors have never experienced anything like this,” he said. “The members have never experienced anything like this. So everyone is trying to survive. 

“The vendor community has had to make some very tough decisions.  Whether it’s restructuring order minimums or restructuring how much volume a dealer has to do through the year, we’ve seen it all, and it’s definitely affecting us.” Only time will tell if some of these moves come back to hurt the suppliers, he said.

“Am I going to sit here and say I agree with some of these choices some vendors have made?” he added. “No, I don’t agree, but I’m also not … seeing the behind-the-scenes challenges” they’re facing. 

Some Natinwhise members have had to take a step back to reevaluate loyalties and their supply chains, Rose said.. “They might have been using a vendor for 10 or 15 years and all of sudden they’re getting cut off. Those members are now having to look at their product mix on their floor and see what makes sense.” 

And many of them are gravitating to other vendors in Nationwide’s portfolio of more than 100 furniture and bedding suppliers. It’s true most of these vendor partners face delivery and capacity challenges, but not all to the same degree.

“If the membership is maybe willing to wait eight weeks for one and three weeks for another, that’s up to them,” Rose said.  “But the one thing I can say is we’re all in the same boat here — the membership, the organization and the vendor community. We’re just trying to succeed, and everyone’s coming together and doing a pretty good job of it over this year.

That’s one of the main reasons Rose believes Nationwide’s membership hasn’t declined during this crisis. Just like in 2008 when the financial crisis was testing the furniture industry and other industries, today “people are seeking a sense of belonging,” he contended. They want to be “part of something that they can’t get on their own.”

“I really feel membership gravitated toward each other because this is not something that happened just on the East Coast or the West Coast. It happened everywhere. People feel they can lean on each other because we’re all going through the same thing.”

That sense of togetherness and belonging may have been best illustrated by the overwhelming response to Nationwide’s partnership with My Neighbors Children charity and its No Child Hungry program. After delivering 50,000 meals to children in need in Las Vegas earlier in the month, Rose headed to New Orleans last week to deliver another 50,000 meals.

“And that was purely from the generosity of our members at our virtual PrimeTime,” Derro said.

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