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After Singapore last year, the 2014 Appnet Conference (9-12 April), went further afield. Conference this year was based in Ho Chi Minh City, Vietnam – formerly Saigon – the country’s largest and most populous city.
Ho Chi Minh City boasts a highly local fusion of the colonial and the modern. Hugely busy, it’s a melting pot of social and political cultures and there are some stark contrasts to be seen in both respects as you travel around.
Ho Chi Minh City has something like 9 million inhabitants, and at any one time it seemed 8.99 million of them were going somewhere astride small motorbikes, singly and severally, carrying both freight and whole families.
To a visitor trying to cross the street it all seemed totally chaotic. To the locals it was business as usual. But for Appnet in the coming year, “business as usual” isn’t acceptable.
“Being Betta” was the theme of this year’s conference and everything that took place in and around the Sheraton Saigon Hotel & Towers was about being better and doing better business.
“XIN CHÀO” TO VIETNAM
Having departed Auckland on the Tuesday night, I arrived in Ho Chi Minh City via Hong Kong, mid-morning local time on Wednesday 9 April.
With a few hours to kill until a welcome event that evening when the assembled delegates were bid “xin chào” (“sin chow” or “welcome”), a quick walk around the local environs brought some quick context to where we were – not to mention provoking a substantial “glow” thanks to temperatures in the 30s…
Bright and early the next day (Thursday 10 April), conference proper kicked off. Appnet Chairman, Mike Tomlinson, welcomed attendees with Appnet’s continuing and “very positive” story, saying Appnet “performed well despite the challenging environment” and on a par with the previous year which was “a pretty good result”.
Looking ahead, Chairman Tomlinson was hopeful for an increase in disposable income with the recovering economy at the same time as being confident that Appnet “remains the best group for mid-sized independent retailers”.
Why? He ticked off Appnet’s margin and profit focus, deliberately low cost set-up and “determination to add value to members”, effective marketing, in-house design and profitable website – not to mention reluctance to gravitate to the lowest price point.
Appnet General Manager, Grant Sheridan, followed with thanks for everyone’s attendance and support for this distant event and bigups to the Appnet team, all of whom were again present, for their tireless work pre-conference.
Last year, Appnet decided to opt out of the widespread “race to the bottom”, but 2013 remained “challenging” and retail saw even more aggression around pricing, he said.
Adding that although it’s been hard to lead the change away from this lowest price outlook, Grant Sheridan was confident that Betta at least has “acted responsibly”, had held margins as a result and rewarded members with a “solid” rebate at year end!
“Being Betta” is the theme of Appnet’s 2014 objectives. “Being Betta” is about being more outward focused and about increasing group volume through more buy-in from members and increased support of preferred suppliers. “Being Betta” is also about finding margin by embracing new product opportunities, of which we will hear more in due course.
Appnet Marketing Manager, Laura Stockton, talked of the past year being characterised by a cautious consumer and by retailers “needlessly playing silly buggers with pricing” and by the struggle to remain competitive in a price-led market.
So “Being Betta” in all this is about superior service and offering the customer more than just selling them the cheapest model, she said. Better information, better service and better promotions.
GOOD, BETTA, BEST?
In keeping with this theme, the next sessions were from two of the network’s “best”. Indeed, both members would be recognised for their achievements the following evening...
To start, Jenny Amies of New Generation Betta Electrical on Waiheke Island, shared some insights into her first decade. The store is not only “far enough from Auckland to be logistically challenging” but also faced an uphill battle convincing locals it could be competitive.
Through some difficult times, the store survived by changing its mentality around selling more higher margin items. Selling more led to buying more and at better prices so the store flourished and is now among the top 10 Betta members.
The “strong and passionate” sales team are also paid better but more is expected in return – in terms of customer relationships especially – and the relative longevity of staff means the store’s knowledge base doesn’t have to be retaught all the time.
Newgen Betta Electrical has also broadened its product range but is “ruthless” if products don’t work. Supporting key suppliers has also been important – “There’s no rogue products sitting on our shop floor!” says Jenny Amies.
As it turned out, later in the conference, Newgen Betta Electrical was rewarded with the accolade Betta Member of the Year, so they must be doing something right.
Then came Paul Fenn, of Gisborne’s Fenns Furniture & Appliances, who also talked about his market and his business. Despite preconceptions about the local market, this 3rd generation retailer’s successes have been in the higher value categories
Having moved appliances under the same roof as its furniture operation five years ago, Paul Fenn says the key is upselling, and being committed to doing so, to the point that he is prepared to walk away from some sales.
“Selling the customer a good product from a long term value and performance perspective, you build a reputation. That’s important when you are selling a variety of product to the same customer.”
Fenns has a phrase – “the customer is always wrong” – meaning that the average customer is often willing to spend more than they say they are at the outset. “We just need to give them reasons to spend more, so it’s up to us to educate the customer,” says Paul Fenn.
“Back the good gear and it will sell,” he adds. Fewer aftersales costs and less stockholding are other benefits but Fenns is quick to exit products that cause problems or don’t sell.
The moral? Stock only products that work, ones that represent great long term value or great design and are well backed up. Back yourself to sell up – you will be doing yourself and your customer a favour. Support suppliers that have innovative, well designed products. Give a great level of service (service levels need to match the price level). And have passion for the product you sell – “passion makes it easier to sell good gear and it makes selling appliances fun!”
Leading the charge in “Being Betta”, Fenns Furniture & Appliances would be named Appnet Member of the Year the following night!
IT’S A KIND OF MAGIC…
Not a keynote speaker in a traditional sense, before lunch on Day One of the conference, thanks to a degree of anticipation about possible audience involvement, we were all focused on the next speaker.
This presenter was a hugely entertaining and engaging South Australian-Vietnamese “entrepreneur, speaker and magician”, Vinh Giang (www.vinhgiang.com.au), who uses magic literally and as a metaphor to get his points across.
He talked about achieving success by validating all of your assumptions about customers; through collaboration and seeking another perspective; by having the right culture; by staying connected; through positivity; by staying fresh; by being the best you can be; by always believing something is possible (make incremental changes!); and showmanship.
Of course with his magic connection, the power of suggestion also featured large in Vinh Giang’s session but that’s totally another matter…
HOW TO BE BETTA?
First up of the supplier presenters this year was Electrolux Small Appliances’ Alan Dalton, who as ever sought to guide the audience towards playing in floorcare’s premium space. With a reminder about the value of consumables in encouraging returning customers he also hinted at an expanded range of small kitchen appliances later in the year.
Next up were Electrolux Home Appliances’ Malcolm Bain & Louise Laloli who filled us in about the company’s global corporate progress and also emphasised the potential for value-adds with the brand’s cooking consumables coming later in the year. The availability of more non-cooking appliance products was also raised.
Breville’s Brett O’Neill encouraged the audience to invest more in SDAs with their high return on investment, adding that Breville would be looking to further leverage its involvement with Heston Blumenthal and Aussie smash hit TV series My Kitchen Rules in New Zealand with merchandising, advertising and giveaways.
Darryl Robinson and Brendon Horgan at BSH talked about the importance of Betta as a regional brand but also underlined that increased volume through consolidated buying would offer the group better prices and margins.
Upbeat, camo-clad Panasonic duo, James Keene and Carl Williams, gave us a Good morning Vietnam style presentation, emphasising the firm’s “guerrilla style” way of doing business – that is, physically calling on retailers and listening to what they’re saying. They had “no regrets” at having left NARTA…
The perfect antidote to the busy business of the day was just a 20-minute bus ride away through the narrow streets and alleyways of the city’s select District 2 area. Amid the high walls and massive gated enclosures with high security, we bussed to dinner at The Deck (www.thedecksaigon.com).
The Deck is situated right on the banks of the Saigon River and widely held as one of the most elegant al fresco dining experiences with its “contemporary fusion cuisine”.
IT’S BEEN EMOTIONAL…
The next day (Friday 11 April), Haier’s Troy Scragg and Fisher & Paykel’s Richard O’Carroll both asked how Haier and F&P could do better with Betta.
After a frank and open discussion revolving mainly around price, there was discussion about F&P’s Profile Distribution Strategy (in itself a reaction against the current no-margin, price-led marketplace), leading to an equally frank and open discussion of the realignment of the two brands and their emerging strategic directions (which will be the subject of a separate article).
Less emotional news from Haier was around its new branding and promotional activity, not to mention a broadening of its offering to include new products like top loader washing machines, TVs, heat pumps and even small appliances. And yes there would be entry level products but Troy Scragg was quick to advise looking up, not down, when it came to selling to customers.
Ever innovative in its approach to such events, Parmco – Trevor Preston & team – explored the wants and don’t wants of the assembled members. The retail-orientated “Let’s Cook with Parmco” programme had been a success and Parmco’s branding was being finessed upmarket across all collateral. Parmco also revealed a range of future offerings designed to aid Appnet in competing with the “pricefighter” appliance brands being seen in the hardware channel.
LIGHT AT THE END OF THE TUNNEL?
After last year’s Sentosa Island team building exercise – which you may recall involved such ordeals as toe-nibbling fish, scorpions and a progressively more and more spicey laksa – you may imagine that the venue and format of the conference’s mandatory team building event was highly anticipated…
An hour and a half’s drive to the north of Ho Chi Minh City is a network of connecting underground tunnels located in the Củ Chi district. The Củ Chi tunnels were used by the Viet Cong as refuge during combat, as well as serving as communication and supply routes, hospitals, food and weapons caches and living quarters.
This 120km-long complex of tunnels has been preserved as a war memorial park and was the site of the 2014 Appnet Conference’s bravest hour…
From crawling up to 60m through one of the tunnels (not for the claustrophobic), to maintaining your balance while tiptoing through a make-believe minefield produced some of the 2014 event’s lighter and most meritorious moments.
Shooting off AK47 and M16 rifles rounded off an intense day out, followed later in the evening by a colourful, dance-, music- and food-filled boat trip on the river, with plenty of local colour and the brightly lit cityscape as a constant background.
TANKS FOR THE MEMORY
With the morning of Saturday 12 April devoted to closed member sessions and the Appnet AGM, we looked forward to an evening devoted to the Appnet Awards.
These festivities inevitably go on until late and are equally inevitably followed by an early checkout for the flight home the next morning…
But back to the awards. The transport to our mystery venue was a convoy of open top military jeeps, thanks to a local club, in which we threaded our way through the still hectic evening city traffic.
The destination was the Reunification Palace. One of the key landmarks in Ho Chi Minh City, this was the home and workplace of the President of South Vietnam during the Vietnam War.
It was also the site of the very end of the Vietnam War during the fall of Saigon on 30 April 1975, when a North Vietnamese Army tank crashed through its gates.
On arriving, the impressive venue was resplendent with conference banners (including sponsor logos!) and a formal welcome comprised a pair of saluting marshals dressed in whites, a red carpet and a brass band!
The results of this year’s Appnet Awards can be found in a separate sidebar on page 27.
Topping last year’s rooftop venue in Singapore was going to be difficult, but, honestly, this one was … Betta. “Gặp lại” everyone (“see you again”)!
Inevitably, we couldn’t fit in half as many photos of the event as we would have liked but do visit the special section on our website (www.wares.co.nz/industry-events/appnet-conference-2014) where you can download them and see (www.facebook.com/WaresMagazine) for a few more. Feel free to browse and download the photos for personal use!
WHO IS “BEING BETTA”?
The 2014 Appnet Awards were held on the final night of the conference. Which of the suppliers and members have been doing best at “Being Betta”? Read on…
Appnet’s thanks go out to the following conference sponsors, without whose help none of this would have been possible:
Premium sponsors: Bosch; Electrolux Home Appliances; Electrolux Small Appliances; Fisher & Paykel; Haier; Panasonic; Parmco.
Other sponsors: Breville; DéLonghi; BDT/Mitsubishi Electric; Advance Retail; Direct Imports; Kärcher; Miele; Omega; Pudney & Lee; Sharp; and Q Card.