A kinder, gentler Highland

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A kinder, gentler Highland


Beitrag von david4121 Themen-Starter » Do, 12. Jul 2018 7:46

A kinder, gentler Highland; the embattled Michigan electronics/appliance chain turns to a noncommissioned sales approach

Highland Superstores Inc, a 49-store consumer electronics chain, has converted to a noncommissioned sales staff, and vendors' opinions are divided about whether the move can support a motivated, customer service oriented environment. Some vendors support the company for trying to differentiate themselves. Others predict that noncommissioned sales will drive away good sales people, while those who stay may be less motivated. The conversion comes at a crucial time for Highland as it strives to refinance a $100 million debt.

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PLYMOUTH, Mich.--Highland Superstores' recent conversion to noncommissioned sales has reignited debate over whether electronics and appliances can be sold in a "pressure-free" environment.

Nearly three years after Minneapolis-based Best Buy rocked the industry with its first Concept II stores in Rockford, Ill., the 49-store Highland chain, facing significantly different circumstances, has decided to take on the commissionless approach, in what some view as a last-ditch attempt to salvage the generations-old company.

Highland, straining under the weight of $100 million in debt it has been negotiating to refinance since last year and unable to find a suitable buyer or investor, has been downsizing and re-evaluating its consolidated operations for the past several years. It reported a $2.99 million loss for the first quarter ended April 30, on sales of $92.1 million.

While industry reaction to Best Buy's pioneering efforts in commissionless sales led in extreme cases to vendors severing supply ties, Highland's conversion appears to be somewhat less problematic.

"I commend [Highland] for trying to differentiate themselves," said Joe Richter, vice president of sales at Kenwood, a critical Highland home audio supplier that parted company with Best Buy when it launched Concept II. He pointed to Kenwood's long relationship with Highland and the retailer's stable management team as reasons he'll continue to support the company.

While Highland's decision was viewed as a response, in part, to Best Buy's decision to enter the Chicago market (one of Highland's remaining strongholds), Circuit City's recent decision to enter that market in fall, 1993, with up to 20 stores makes Highland's changes even more critical.

While saying it was too early to rate Highland's approach, Richter said based on meetings with Highland during the past month he understands the tack will be more in line with the skilled but commissionless sales floor at Rogersound Labs. "In Highland's case, they're not stressing self-service but saying sales advisors will be there to answer questions."

"We're well aware of how important Kenwood is to us," said Phil Garrison, senior vice president of marketing at Highland. "It's a demand line ... we don't want to lose it." He suggested that Highland salesperson have the freedom to suggest particular lines or products if the consumer walking in the door isn't predisposed to another brand but said counselers won't steer or sell off one brand to another, which vendors commend. He also said the new format is "designed to improve the closing rate on the people who walk in the door at Highland."

Highland "seems to be very pumped up on it," said Matt Rounds, national sales manager at Yamaha Electronics, at a recent Highland car electronics show and sale. "Time will tell [if Highland's plan will succeed], especially in the area of highend products ... but we're pleased with what they've done for us" in the past.

Another top vendor at the car stereo event declined to speculate on how the new format would affect his relationship with Highland or how it would do but did say if it helps the chain out of its current troubles, so much the better.

Dan Dodson, sales engineer at Pyle, which supplies the best car speakers for bass  to Highland, said he supported the move to a friendlier sales environment. "When a customer walks in the door, it's as though a seed has been planted that they can either grow or kill. I sense they've made a decision to let it grow." One market watcher familiar with Highland praised the chain's willingness to change but was uncertain about the results.

"You can't be half pregnant," he said, noting that Highland isn't changing to the bare-bones, low-overhead look associated with warehouse clubs, in addition to cutting commission sales. And he predicted that without incentivized sales," they'll lose the good salespeople while the others [who stay] could care less about sales."

Highland is changing the look of the stores to make them "brighter, and more visually appealing, with new colorful signage and displays," while sales advisors are newly casual wearing sweaters and polo shirts.

Garrison, who's familiar with the commissionless approach from a long stint with Macy's (he's also held top merchandising slots at Silo and Montgomery Ward), said vendors have been "very supportive" of the new approach. "They like the fact that our people will create a better shopping experience for consumers. [Vendors] are working with us real hard on training to make sure we have the right force."

Highland already has begun a promotional blitz detailing its new non-commissioned sales approach, playing up the consumer friendly while hoping to put behind it the used-car salesman image of the past.

A recent full-page ad appearing in Detroit newspapers was as consumer-oriented as it was a help-wanted spot. Run under the heading, "Calling All Angry and Frustrated Electronics and Appliance Salespeople," the ad portrayed Highland as a place where consumers can get advice rather than a pitch, and where service contracts won't be forced on consumers.

Mitchell Mondry, vice president of store operations and customer service at Highland, conceded the ad did equal time as a consumer appeal and added turnover has been kept to a minimum as a result of the new policy.

Taking exception to competitor reports that top-level Highland salesmen have been jumping ship, Mondry said, "Our turnover rate has been just about zero."

He called the new policy "pay neutral," emphasizing that a sales consultant's earnings "won't be affected by this." He said the company has been telling employees, "Whatever you were used to making, we've slotted you for that and so you will continue to make it."

Industry sources said Highland's new pay structure allows for three separate tiers of salary, topping off at the mid-$30,000 level. Asked if a salesperson making a commissions in the upper $50,000 and $60,000 range would receive that in salary, Mondry would only say "we have very few in [that] range."

Mondry conceded sales consultants also will be offered incentive bonuses based on a particular store's performance, with a bonus package divided among the store based on the performance of each staffer.

"They share in a store reward based on how they've contributed," Mondry said. "People who are used to earning more will get more of the store bonus," based on their performance.

While Highland has soft-pedaled the new approach as a concession to consumers, others viewed the move somewhat more cynically.

Dick Schulze, chief executive officer of Best Buy, which is making a major move into Chicago this year in what some view as a partial impetus for Highland's conversion, said Highland may have had no choice.

"They are the most disliked and mistrusted retailer in Chicago," he said. "The most research we've ever done on a city is in Chicago, and customers there tell us Highland is a company 'I just cannot trust.'"

In a statement earlier this month, Ira Mondry, president and chief executive, appeared to concede customers aren't happy with commissioned electronics stores, but said it's an industry (and not just a Highland) problem.

"All these moves are designed to respond specifically to customer concerns," said Mondry, noting Highland's own research "made it clear that today's electronics and appliance shoppers ... seek friendly, honest, knowledgeable assistance. At the same time, however, customers are turned off by the pressured atmosphere common in this industry created by a sales force working for commissions."

Mitchell Mondry said Highland, one week after the policy was implemented, has seen "some slight increase in sales," but said it was still too early to expect all customers to be aware of it.

He said the company has changed "some pricing" to "make sure we're at least at or better than market pricing." And while Highland still has a meet-or-beat-the-competition's pricing, Mondry said sales consultants "no longer negotiate" on pricing, a policy similar to that implemented at Newmark & Lewis after years of aggressive selling.

Highland's approach to noncommissioned sales will differ from front-runner Best Buy's in that Highland will maintain sales floor staffing from its commissioned days, whereas Best Buy reduced staffing levels. "In some cases, we've added people," Mitchell Mondry claimed.

He said inherent in the new policy is increased training, with more vendor oriented "product extravaganzas" where specific models and lines are targeted, and with a new monthly test of advisors on subjects from customer service to selling plans.

And the Highland executive noted the new noncommissioned approach won't immediately be reflected in the product line, though he said Highland is always discussing the possibility of getting new lines.

SEE ALSO: Best car door speakers

Garrison said Highland, as it implements the new policy and moves to close out merchandise from markets it has left over the past years, looks to return to profitability some time this year.

"We'd like to see Christmas be real profitable for us," he said.
Zuletzt geändert von david4121 am Di, 23. Okt 2018 5:01, insgesamt 1-mal geändert.

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Re: Firefox password?


Beitrag von schlingo » Do, 12. Jul 2018 11:00

david4121 hat geschrieben:
Do, 12. Jul 2018 7:46
Can we put a password on firefox ?
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Re: Firefox password?


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