HHGregg and Retailers and Retail and Real Estate & Retail

HHGregg launches rebranding effort to improve sales

May 6, 2014
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HHGregg Inc. unveiled a new marketing campaign Tuesday in an effort to boost sales at the slumping Indianapolis-based electronics and appliance chain.

The wide-ranging “brand transformation” includes a new company logo and television commercials, in addition to an improved website and more services offered to customers who purchase big-ticket items from an HHGregg store.

The final piece of the company rebranding could be the most noticeable—a total redesign of HHGregg stores slated to start next year, said Julie Lyle, the company’s chief marketing officer, who arrived from Wal-Mart Stores Inc. in December.

“We play in a highly competitive space; that’s the reality of the business,” she said. “But we think we have an opportunity to deliver an experience that is much better than a Best Buy or a [Home Depot or Lowe’s].”

HHGregg has struggled to find a winning product mix. It began focusing more heavily on appliances, furniture and fitness equipment after sales cooled in the TV and video markets.

To reflect its broader array of offerings, HHGregg has added the word “furniture” underneath its logo, which previously only listed longtime staples appliances and electronics.

Its 30-second advertising spots, dubbed “fill your home with happy,” highlight the joy a new television or appliance brings to a household. That’s a shift from HHGregg’s last marketing campaign, which focused more on the challenges of choosing the right product as the Beatles song “Help” played in the background.

The advertisements are the work of Chicago-based Leo Burnett, which last year wrestled away HHGregg’s account from incumbent agency Zimmerman Advertising in Fort Lauderdale, Fla. HHGregg’s annual media spending typically exceeds $100 million, according to Nielsen.  

The latest effort to improve sales is much broader than past campaigns, HHGregg says.

Customers, for example, now can track deliveries and receive improved support during installation. HHGregg also has increased its online advertising and increased the speed of its website to improve digital sales.

“We’re refocusing the business on the consumer and the relationship,” Lyle said.”From a transformational standpoint, this has not been done [at HHGregg] in many, many years, if ever.”

But how effective are these types of campaigns and do they translate to better sales? That depends, said Richard Feinberg, a Purdue University professor of consumer sciences and retailing.

“The question really is, if the status quo isn’t working, do you slowly die or do you try to take steps to reinvigorate the internal organization and differentiate yourselves from the competition,” he said.

The company's executive ranks have seen big changes in recent months. In March, Gregg Throgmartin stepped down as chief operating officer to become CEO of Fort Lauderdale, Fla.-based Bikestreet USA. He’s been replaced by Troy Risch, former executive vice president of store operations for RadioShack Corp. Chief Financial Officer Jeremy Aguilar left in December and took the same job at Sports Authority.

Standing out from rivals in the highly competitive consumer electronics business is difficult, simply because there’s not much difference among televisions and appliances, Feinberg said.

Online competitors such as Amazon only add to the pressures, making it even more important for HHGregg to establish a strong digital presence.

“It’s not that people buy only on the web; they do their research on the web,” Feinberg said. “If you don’t have a good web presence, they’re never going to come in.”

HHGregg is in the process of deciding on its new store design. It’s narrowed the field of finalists to three and should choose a winner by July, Lyle said. The company has more than 220 stores.

Company shares have taken a beating since late September, when they traded for more than $20 each. They stood at $8.52 around midday Tuesday.

Last month, the company announced it expected to report a 10-percent decline in fourth quarter sales when it releases its earnings report May 20. 

 

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