Specialist assists in navigating HDTV seas

DSN Retailing Today, Feb 7, 2005 by Mike Duff

The nature, functionality and shape of television has changed, and the result is often a combination of desire and confusion. To help satisfy the shopper who wants more from television but consequently requires more time, information and service than a typical mass-market retailer can provide, along comes HDTV Warehouse.

Although a new concept, HDTV Warehouse has a pedigree that should give it a solid foundation as it grows into a chain of specialty stores.

John Mlynski, president and primary investor in the enterprise, spent eight years working for Blockbuster then moved on to become president of Gateway Country stores. Those experiences amounted to a critical prequel to his current initiative with HDTV Warehouse, he told DSN Retailing Today. His time at Blockbuster gave him a grasp of what selling entertainment means, and his tenure with Gateway Country allowed him to learn about introducing people to emerging consumer technologies.

HDTV Warehouse is located in Orange, Conn., right on U.S. 1, a heavily traveled retail corridor in an affluent community near New Haven. The 3,800-square-foot store showcases 50 different models of high definition LCD, plasma and rear-projection DLP, LCD and LCOS televisions from well-known and emerging brands, such as Panasonic, Vizio, Pioneer, JVC, Samsung, Sharp, LG and Epson.The assortment and price points--ranging from $369 for a 13-inch LCD to $14,999 for a 65inch plasma set--are set to far surpass what is typically found at HDTV's competition, whether big box retailer, discount store or warehouse club.

Among the products offered are commercial models, both for consumer and small-business customers, not typically found at retail. The assortment is rounded out with a selection of boxed home theater systems; TV stands and wall mounts; universal remotes; and a full range of cabling, surge protectors and other accessories.

Mlynski cautioned, however, that anyone drawing the conclusion that HDTV Warehouse is only interested in affluent early-technology adopters would be mistaken. "We're going after middle America," he said. "We have the depth and breadth of selection, price and service."

Price is a critical element in the HDTV Warehouse formula. Mlynski maintains he can post prices 5% to 10% below those of the competition. While he concedes he doesn't have the greatest buying leverage in television retailing, Mlynski said HDTV enjoys advantages in overhead. Mlynski and three other employees are all the staff the store requires. This SG&A advantage can translate into lower prices. Overhead is lowered further because the store acts as a buying center, with shipments going from vendor to consumer. Inventory doesn't sit on the HDTV Warehouse books.

In addition to selection and price, service and product knowledge are the legs on which the HDTV business is set. In addition to direct delivery, the store offers custom installation services and extended warranties, including an accidental-damage warranty that Mlynski characterized as unique to the company.

Knowledge is a critical element, said Mlynski, because HDTV Warehouse is essentially bringing a new generation of television equipment to consumers, and that requires a particular approach to customers. Signage in the store provides information about many basic aspects of new television technologies. Employees are available to do the rest. But the hard sell is out. Small seats are available throughout the store so shoppers can sit, watch and mull over a purchase.

Indeed, HDTV customers frequently require multiple store visits before they make their purchase. And that's alright with Mlynski. His shoppers are going to make a big purchase and have lots of options and alternatives to consider. Employees are there to facilitate that process and to help shoppers get a real hands-on sense of the features their televisions have.

He noted that one of the frustrations consumers have with new technology is not being able to navigate the features that comprise its essential advantage, so Mlynski and his staff do things like set picture parameters with shoppers so they can find the level of contrast and brightness they prefer.

The Orange store soft-opened in mid-December, in part to capture holiday sales. The grand opening kicked oft" the weekend of Jan. 21. Future plans include contingencies for store growth on a corporate model--in other words, franchising is out--to keep expansion disciplined. Mlynski said he expects the store to hit its sales stride three to six months after the grand opening. By then, the store will have begun to enjoy the benefits of a multipart marketing program including public relations, billboard, radio, print and, eventually, co-op advertising components.

Mlynski said he expects that the HDTV Warehouse concept can only benefit from the expansion of high-definition television, which, he asserted, is growing at an 80% compounded rate. "This is a category that's only going to get better," he said.