hhgregg’s strength has always been in appliances and in the
installation services that are often needed for those products. Home Theater
installation is another matter entirely from this observers view. While this company
has offered installation services in TV’s for the last few years finding anyone
in store who would recommend or sell these types of services was something a
customer would hear only on very rare occasions. This lack of execution started
to change in the fall of 2011.
In the fall of 2011, hhgregg sales associates began recommending
a form of in home consultation, where a representative would come to your home
for $99 and perform in home assessment of the customer needs. If the customer
made a purchase from this in home consultation, the fee would be returned to
the customer. The only supporting documentation for the various installation
services that were offered at the time could be found only in a brochure in
limited locations.
Fast forward to the last few weeks and one would notice that
installation services are now top of mind to this company. In store, more
associates are talking about the various packages that customers can now
purchase to give a complete home theater solution along with supporting Point
of Purchase signage. The first service that associates talk about are the
various options for mounting a new flat panel from Basic to Deluxe packages for
TV’s of all size ranges.
For customers looking for the best picture possible,
hhgregg offers Spyder TV calibration which also includes a review of the
customers sound system and remote control review. Why just a review? If the
customer is investing in a calibration of their new TV, getting a new sound
system and a programmable universal remote would be only a recommendation away
while the technician is in the customer’s home. Additional services like IPTV
or 3D TV setup can be purchased for an additional $49 for customers who
purchased one of the other services.
One of the causes for the needed change is due to declining
Average Selling Prices as well as Gross Margins in the Home Theater category.
Also, hhgregg as part of their FY’12 strategy focused more on smaller screen
TV’s to drive customers into the stores in order to gain market share. While the
desired market share gains occurred according to hhgregg management, those
gains came at a cost of gross margin reduction and ultimately profits. As the
company shifts its FY’13 strategy to an emphasis on selling larger screen TV’s
(think 60” and above), sales of installation services are one of the
complimentary services that this company will use to drive additional revenue
and profits.
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