Service Merchandise Company Inc, a 400-store catalogue showroom series, has survived in an age when other catalogue showroom chains have neglected. Primary to the company's survival has been its ability to present its stores a 1990's merchandising look.
BRENTWOOD, Tenn. - Where a lot of its catalog-showroom competitors have fallen, Service Merchandise has risen. How to choose car speakers
Together with the style of a department store as well as the prices of some discounters, the 400-store chain has averted the Chapter 11 bankruptcy filings which have promised counterparts such as David Weiss, W Bell and Best Products Co..
Within an Service Merchandise's ability to steer clear of financial straits that plagued its competitors rests in its ability to modify.
"It's a '90s retailer in comparison to a '80s retailer," said Isaac Levy, vice president of advertising for Sanyo consumer electronics products. "Every step from the real catalogs into the displays in the stores, they have made the transition into '90s imports while some of those other catalogers have not."
The retailing transition is perhaps best located at the prototype store's 4,000-square-foot "Sight and Sound" consumer electronics section in which the crowded, dimly lit look of retailing in the '80s has been replaced by an open, airy version which features interactive displays.
Dozens of personal CD players line wall and also lead straight into car stereo head units, speakersand radar detectors. And while glass display cases were in trend from the '80s, the sole products featured in glass include radar detectors; receivers, tuners and speakers at a house sound sound space that anchors the back of the section; along with a wide assortment of cameras out of point-and-shoot models to single lens reflex (SLR) units.
Virtually 40 direct-view televisions have been stacked along a back wall making the popular "wall of eyes" impact, whereas 52-inch RCA and Magnavox projection sets are added into the mixture - a large departure for a series that depends on 31-27- and also 25-inch units for strong sales.
"We sell a great deal of TVs at popular price points, and we've got consumers coming to us to look to the bigger screen sizes. We have always just dabbled in it today."
While Service from the past supported some esoteric brands, it has moved in the past several years to brands names such as IBM, Compaq, Packard Bell and Apple.
"We've been able to merchandise with those manufacturers features and price points which we weren't actually able to perform over the last 3 years," said Buehler, that combined Service Merchandise in June 1992 following a 13-year stint at Best Products.
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"The [pc] manufacturers are becoming more conducive to the retailers' needs as those folks have started to conduct business with retailers such as ourselves."
The most important reason such manufacturers as PC vendors have done business with Service Merchandise, according to industry officials, is the series has stayed consistent.
Fellow catalogers sometimes shortened their books or did not publish them all from the face of fiscal problems.
In reality, the series has changed very little since Harry and Mary Zimmerman sold off a 10-store five-and-dime series in 1956 to focus on Service Wholesale Co., the forerunner of Service Merchandise, that was established in 1960. Service Merchandise sent its first catalog to 5,000 Nashville residents in 1960, and since that time has shown gain and expansion.
Throughout the second quarter ending June 30, Service Merchandise had $8.4 million in earnings on sales of $804 million against $6 million and $781.4 million per year ago.
"If you look at them, they are the older catalogue house which has succeeded," said Thomas Edwards, assistant general director for television at Panasonic Co. "They are kept up with what the consumer expects from their operation. They have become value-added product, better selections, and started offering some assistance to consumers coming to the stores."
This assistance to consumers has arrived through commissioned sales people it started hiring in 1991.
Since that time, Service Merchandise has added 200 commissioned sales people to about half its stores, but also continues its "Easy Shop" self-service order forms which are located at most of its departments.
To further boost its own image, Service Merchandise continues its four-color printing advertising campaigns and specialized mailings and throughout the fourth quarter will start a 30-second television commercial online and cable television featuring comedian Bill Cosby as its spokesman.
"They have created a much better assortment and started to bring in some larger ticket items, " said Joseph P. Clayton, executive vice president at Thomson Consumer Electronics Co..
"I believe they have done a remarkable job of rebounding, and that I believe people might have counted them from there for a short time."
The advertising and promotion is blended: witness Service Merchandise's ongoing attempt to push its personal Garrard-brand sound products, which fulfilled the low price points to the series since the mid-1980s.
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"We see [Garrard] covering a great deal of different price points, and we believe it could produce its own niche," Buehler said. "Certain items most fit in at a higher price while others might come in lower."