As I tell readers in my book, It’s Not Rocket Science: Using Marketing to Build A Sustainable Business, the world doesn’t really need more than two suppliers of anything. Circuit City learned that lesson the hard way when they collapsed in January of 2009. Best Buy and Wal-Mart appeared to be sufficient. However, there is often room for a smart new player who understands we don’t need the same thing again.
Enter Hhgregg. Readers in the MidWest of the U.S. will recognize the name. The rest of our U.S. readers may soon learn about this electronics retailer. Founded in 1955, Hhgregg is taking the opportunity to expand in this down market and, in many cases, right into the closed Circuit City locations. Given that the electronics retail landscape is littered with failed companies from Circuit City, to Crazy Eddie to Good Guys, why do the folks at Hhgregg think they can succeed?
Differentiation, of course. It was hard to tell the difference between Circuit City and Best Buy at the end. Stores like Fry’s are clearly different from Best Buy and its stores thrive. What is Hhgregg’s focus? Hhgregg provides 280 hours of training to their sales people and pays them on commission. They are expected to KNOW about the products they sell and to take an approach to helping the customer buy what’s right for them, not to push products onto the customer.
With highly trained sales people, they can sell more of the higher priced products because they can explain the difference to the customer. They tend to focus on the higher end products. They have smaller stores and are more focused. Not quite as focused as the old Magnolia (now part of Best Buy’s in-store high-end boutique), but still more focused with much less space for DVDs and CDs.
Will they succeed? I don’t know. However, they have been around for over 50 years and seem to be pretty smart folks that are not trying to be a “me too.” That we like.