By diversifying its offering and developing into a hybrid retailer in the late ’90s, this consumer electronics company put itself in a good position for 2009. By diversifying its offering and developing into a hybrid retailer in the late ’90s, this consumer electronics company put itself in a good position for 2009.
In an age when electronics attract a broader demographic of consumers than ever before, retailers are pressured to adapt to a constantly evolving market where new technology is developed on an almost instant basis. Headquartered in Gaithersburg, Md., the team at MyerEmco is aware of this fact, and it’s following suit.
MyerEmco was founded as a radio repair shop in 1955, but through the past 50 years, it developed into a business that specializes in a range of consumer electronics. “By addressing people’s lifestyles, as opposed to just their hobbies, we knew we could strike a broader note in the marketplace and attract non-traditional consumers,” said Gary Yacoubian, president.
The advent of the home theatre craze in recent years opened a hole in the TV market, allowing MyerEmco to move aggressively in that direction and further broaden its appeal. Through its hard work, the company, which has nine locations on the East Coast, developed a reputation as one of the best places to purchase electronics in the Washington, DC area.
According to Yacoubian, the evolution of the company is due, in great part, to the development and dedication of its 150 employees. In retail, employee turnover is relatively common, but at MyerEmco, the executive team works hard to retain its staff.
This is especially true in today’s economic environment. “Our staff knows this is a tough time, but they love the company,” Yacoubian said. “We’re all fighting through the recession together. We haven’t had any voluntary attrition in the past year. Our average sales associate has been with the company for five years.”
As a hybrid operation, MyerEmco stores are void of the counters one would expect to see at a Best Buy. The stores are designed to make customers feel like they’re in a boutique, rather than a retail outlet.
With this setup, it’s important for MyerEmco sales associates to be highly knowledgeable and well trained. Because Yacoubian and his team manage to retain associates for lengthy periods, the investment in initial training is one that doesn’t cost the company much. However, updated training sessions occur as needed.
As part of the company’s plan to expand into different areas of the marketplace, Yacoubian and his team became involved with custom installation in the late ’90s. According to Yacoubian, this move reinforced MyerEmco’s reputation as a value-added service operation.
“We noticed the consumer electronics world was moving in two directions,” Yacoubian said. “On one end, there were very low-added-value, high-velocity, big-box stores, and on the other end was custom installation.” The team at MyerEmco knew it would struggle to compete with the likes of Best Buy, so it turned its focus to the latter.
Now, with an even split of revenue stemming from custom installation and sales, MyerEmco is one of the most successful hybrid audio/video and custom installation retailers in the US. Since the introduction of its new model, the company has grown from about $1 million in revenue to almost $40 million.
The custom installation area of MyerEmco’s service includes anything from hanging a flat panel TV to installing a complex multi-room control system into a customer’s home. Additionally, the company owns a security business, which enables it to interface with customers’ systems and provide them security and fire protection.
“We cover almost any piece of technology that an individual might desire in his or her home,” Yacoubian said. “Custom installation consists of about half our revenue, but it couldn’t exist without its retail counterpart because it isn’t a diverse revenue stream. Both sectors play a part in driving the other, so we never want to go wholly into one.”
According to Yacoubian, companies that dedicate themselves fully to custom installation don’t have the ability to promote their business via internal sales. “Those companies are dependent on the housing industry and builders,” he said. “When things go south in that arena, they’re left out in the cold.” In terms of today’s recession, the team at MyerEmco is fortunate that it’s developed a balanced business.
“One of our strategic cornerstones is to maintain duality,” Yacoubian said. “It helps us in times like these because our focus isn’t on a single entity.”
On January 1, 2009, Yacoubian became chairman of the executive board for the Consumer Electronics Association (CEA), a group MyerEmco has partnered with for years. Yacoubian is the first retailer to be chairman, and his vice chair, Henry Chiarelli, president of DBL Distributing, is also the first of his kind to be elected.
As chairman of the board, Yacoubian is responsible for running meetings and interacting with staff, but he stays away from the organization’s day-to-day operations. “The CEA is a great organization,” he said. “Because of our involvement, the team at MyerEmco gets access to incredible market research.”
Through CEA, Yacoubian and others like him get the opportunity to contribute to public policy discussions and lobbying efforts regarding changes in the industry. Because so many companies are involved with CEA, executives also use the organization as an opportunity to network and consult with other leaders.
In December, it was announced that Sony chose MyerEmco as the regional dealer of the year for 2008. The award is proof that the company’s hybrid model is working. Looking to the future, Yacoubian doesn’t see the brand expanding any further in the Washington, DC area, but he would like to see it stretch into other regions of the US. “Nine stores is an appropriate number for the area,” he said.
“There will be opportunities to expand into other regions in the future, although that’s on hold for now, with the recession in full gear,” Yacoubian continued. “When things begin to lift and credit is more readily available, we’ll begin to look forward.”