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HHGregg launches rebranding effort to improve sales

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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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  • Julie Lyle - Walmart?
    Wondering why the article states that Julie Lyle came over from Walmart in December. I looked up her LinkedIn profile and it says that she hasn't worked there since 2006. She has worked at two other companies since Walmart. A bit misleading.
  • bad time in store
    on may 2 Friday I went to your store in Huntsville,al to see if it would match an on line price of $244.00 your manger got out the lense at your price of $399.00 he then went to a computer in the back of the store looked up the web site and said that is a good price. Went back to the cabinet and put the lense up I ask him if the box was empty he said no he could not sell the lense for $150.00 less than $399.00. wht could he have told me that at the back of the store? then I left togo to my truck and releized I hed lost my credit card so my wife and I went back in the store where NO ONE offered to help look my wife and I retraced my steps and did not find the card we had to cancelled it. I will not be back I will buy on line from now on (better prices) and I at lest don't have to put up with employees just standing there and looking at you or mangers who lead you all over the store then when you ask say oh we can't sell it for that.
  • Same Book, Different Cover
    While I applaud the effort, changing a logo and offering "improved services" isn't going to help this place. At the corporate level, this company is held together with duct tape. It's a wonder they are still in business with how cheaply they try to skate by with systems and processes. Don't get me started on the stores. I've been to several and each time I stand and wander around, waiting for someone to "help" me. (No wonder they dropped that annoying campaign.) And when I have purchased an item, they have managed to screw up delivery EVERY SINGLE TIME. Good luck to them. They're going to need it.
  • Customer service is likely part of the problem
    The last two times I entered an HHGregg story w/the specific intent of purchasing something, I stood directly in front of the product for 5-10 minutes and was never asked if I needed assistance. First time, shame on you. Second time, shame on me. Haven't been back since....and have no intention of doing so in the future.
  • Very Competitive
    In my experience, the sale people are very good. The electronics guy I have used for 10+ at 96th street is exceptional. The kitchen and laundry people are knowledgeable as well. However, they have to compete. I bought as fairly expensive oven 2 years ago, I assumed I was going to buy it there and they wouldn't meet the prices others had. I ended up buying it from Home Depot of all places and I really wanted to buy it from gregg. They need to make sure they are competitive and it is an extremely competitive market segment.
    • Business Model Needs the Help
      I think the only group in this story that is "filling their home with happy" is Leo Burnett. Anyone who has walked into an HH Gregg recently knows their business model is what needs the face lift. Dumping millions into watering down the brand, creating a new tagline, etc. is not the long term fix. Announcing a faster web site and order tracking is not worth mentioning. In fact, mentioning those things as though they are a big deal further amplifies how out of touch this retailer really is.
    • Can't be any worse
      There advertising has been terrible. Cheap looking. Makes me think all their products are cheap too. I remember hearing that they wanted to be like Target, and boy is their advertising anything but that. Haven't seen the new work, but it couldn't be any worse than the old stuff.
    • Amateurs
      Very uncreative, obvious ways to attempt to increase sales and it won't work.
    • won''t work
      Seems that closing some underperforming stores would make more sense, like the one in Avon. Also, rebranding does no good if they don't have their own products, perhaps with the rebrand, they need to have some of their own product line. People go to stores less frequently and the demise of Sears and many electronics superstores have preceded this. They don't have a chance unless they make their stores a destination rather than a store within a shopping center. A store by itself makes more sense. Best Buy realized this a long time ago. HH Gregg margins are slim, I don't sense they have well trained sales people, just sales people that are persistent and actually cause irritation to many customers. People do like to shop instead of being constantly asked if they need help. The consumer is much smarter than they were 10 years ago and actually more informed in many ways and smarter than the sales people.

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