Incredible Universe moves in on Miami - consumer electronics megastore

Discount Store News, March 7, 1994 by Pete Hisey

MIAMI -- Tandy debuted its fourth The Incredible Universe store here is late February, a brighter, more customer- friendly version of the 185,000-sq.-ft. megastore that ahs rapidly become a key player in the consumer electronics industry.

The Universe has learned along the way. The newest store is not only bigger and brighter than its predecessors, but better merchandised. And the grand opening hoopla that shut down 1-5 in Portland, Ore., during the first unit's debut has been streamlined to minimize the impact on the surrounding community.

According to chairman John Roach, the opening was deliberately planned for President's Day to minimize inconvenience to commuters on the nearby Palmetto Expressway, and doors opened at 9 a.m. instead of noon to ease the crowd build-up. As important, opening day specials were up-scaled, from a $29 black & white portable television to a $130 19-in. color television.

"We priced the specials to keep things from getting too crazy," Roach said. "And the earlier opening time moves people through in a steading stream."

The opening attracted roughly the same 17,000 or so that have attended other openings, but by noon most of the crush had abated and the store interior remained navigable throughout the day -- a big change from Portland.

For the first time, Roach was willing to discuss store productivity. The company has upgraded its expectations from $40 to $60 million a unit to $55 to $75 million a unit, and Roach said the chain plans on $450 million in sales this year, up from about $150 million in 1993, when the chain operated only one store for the entire year and two others for portions of year. The Incredible Universe should pass the $1 billion mark easily in 1995, he added, with new units already scheduled for Phoenix, Sacramento, and unnamed Florida and Midwestern markets by year-end. Eight more will be added in 1995, for a total of 16 and possibly more by year-end, on the way to about 50 in 1998.

The major changes at store level include bright, oversized signage hanging from the ceiling, better lighting in the back of the store, more luxurious sound and home theatre viewing rooms, increased housewares, lighting and toy selections, a pared-down photo department, a new exercise department, and the Incredible Innovations shop, which shows off new technologies from around the store in oen easy-to-view department.

Selection in music and movies has also been increased, with dump tables of budget titles located in their respective departments

as well as at checkout. And in a test unique to Miami, The Incredible Universe offers to export the products its sells anywhere in Latin America. Up to 6 million tourists annually swell metro Miami's population to 8 million, and many of those visitors are from the Caribbean, Central America and South America.

To Roach, the major problems with The Incredible Universe have come from managing velocity. At times, the huge parking lot can be overtaxed, and with up to 12,000 customers circulating through the store on an average weekend day, a run on certain products can develop unpredictably. "We can sell 300 or 400 washers and dryers over a weekend," Roach said. "And manufacturers vary in their ability to keep up with us."

But on the whole, he said, the chain has managed to stay in-stock pretty well, he added.

The merchandise mix itself has been tweaked, Roach added. "At the beginning, we had a lot of low-end items on the floor," he explained. "But we were finding that before long, once the bargain hunters went home, we were out of stock on some of the higher priced products. Our customer is coming to make an investment, and while we carry the same $149 VCR everyone else does, consumers seem to trade themselves up. Human nature is to buy the best you can afford."

Competing retailers may be thwarting that natural behavior by erecting barriers, like commissioned sales help, poor selection, and an uncomfortable shopping environment. "There are indicatioins that a good part of out sales comes from disaffected customers, those who had given up" and decided simply to keep their old TV or VCR, Roach said.

That may not be true in Miami, however, where The Incredible Universe faces stiff competition from megastore operator BrandsMart USA, which operates three massive stores with sales of nearly $100 million each. The Incredible Universe seems to have picked a location that doesn't go head-to-head with BrandsMart, which has a solid foundation in the Miami/Ft. Launderdale corridor.

The only thing showing Tandy up, now that the prototype is more or less shaken down, is site selection, Roach said. "Because of our size, every store is a major development project," he noted. "In many cases, we'll have to build our own off-ramp from the highway, for instance." But with 350 jobs per store, enormous sales and business tax contributions, and a generally positive effect on the local economy to offer, he said, negotiations generally run smoothly.