Revamped CE focus to spark Ward's revival - consumer electronics at Montgomery Ward and Company Inc

Discount Store News, June 19, 1989 by Peter Hisey

Revamped CE Focus to Spark Ward's Revival

TAMPA, Fla. -- Across the street, construction workers are tearing down the former spring home of the Cincinnati Reds. Here, under the shadow of Tampa Stadium, Montgomery Ward is trying to rebuild its franchise, and it is using its Electric Avenue consumer electronics department as a centerpiece.

"A year ago, this was a slumping store," said Randy Asbell, district merchandise manager, Electric Avenue. "This year, it's up 25 percent." Asbell, who oversees 17 Electric Avenue operations in Florida, Georgia and Alabama, credits the revamped CE focus as an important drawing card for the new specialty stores.

"Electric Avenue has really drawn people into the store, Asbell said. "That used to be up to apparel, but we've inherited some of the job." As the product mix continues to improve, the department should increase its drawing power, he added.

"We have to be at the leading edge of technology," said national marketing manager for Electric Avenue John Bulgarella. "At the rate the market's moving, it's only a year or so before innovations reach the mass market, so we have to stay on top."

That approach is a key to the revival that has turned around the moribund Ward, which has torn up its full-time general merchandise stores and turned them into a profitable collection of highly focused off-price specialty stores.

And Electric Avenue appears to be the corner stone of this new collection. The stores have a heavy concentration of upscale brands and higher-end products, including products from JVC, Pioneer, Jensen, Advent, Marantz, Fisher and Sanyo. Ward has also made a commitment to technologies like Super VHS, home office and personal computers.

Audio components, which Ward added about 18 months ago, are the fastest growing segments in Electric Avenue's business. Asbell said that the firm will continue to upgrade its selection. Coming soon will be a mid-priced combination CD/laserdisc player from Pioneer, and other upper-end products are on the way.

"We used to sell only low-end rack systems," Asbell said. Now, although low-cost racks from Soundesign and others are readily available, the collection also includes a 120-watt system from Sansui at $1,499.99.

But the company's competitive advantage appears to be its dominant selection of white goods, including the coveted Maytag brand name. According to Bulgarella, "laundry has been doing great," in part because of the Maytag brand. Asbell added that refrigeration and air conditioning have both been strong areas, and that the company's flat $25 delivery charge (no matter how much is being delivered) has spurred sales.

According to Asbell, the strong brand presence has led to sharp rises in Ward's private label goods as well, as customers note the number of features included at lower prices. "If someone is set on Maytag, we'll sell them Maytag," he said. But shoppers often choose high-margin private label goods.

Home office equipment has also sold well, particularly phones and personal computers. Bulgarella added that personal word processors have been popular, partly at the expense of electronic typewriters.

Moving from a high-low, promotional strategy to an everyday low price policy has been difficult, Bulgarella said, but also rewarding. "We had a learning curve for the first 60 days," he said, "but our associates have become comfortable with the concept, and feel better about their jobs."

Freestanding Electric Avenues (superstores of between 12,000 square feet and 17,000 square feet in size) account for only 12 of the chain's 300-plus locations, but they are a key to the chain's progress, Bulgarella said.

"The mix of business is slightly different there," he said. "We sell higher-end products and more brand names." As consumers become more familiar with Electric Avenue, Bulgarella expects the bulk of the stores (department in existing Wards) to also become more brand and high-end oriented.

Bulgarella said that the appliance business is a necessity to Electric Avenue's eventual success. "I don't see a CE boom coming, and prices are coming down in a lot of areas," he said. "Superstores that rely on audio/video only are having problems, whereas appliances is a good, solid and profitable business."

In Tampa, Ward has built on that base to become a dominant CE supplier, but the firm has little competition, apart from upper-end audio/video retailer Sound Advice and the McDuff chain. That will change. Circuit City is opening its first Tampa stores this month, and Sear's Brand Central is due in early 1990.

Electric Avenue in this market is reacting by upgrading its audio and video products. It is adding higher-end audio components and more big screen TVs, as well as concentrating on Super VHS and hi-fi VCR models. Also, according to Asbell, the retailer will double its stock of camcorders, from nine to 18, and will expand its home office selection. Ward has moved car audio from automotives to Electric Avenue, and is upgrading the products it offers.