During PrimeTime in Orlando, the discussion centered around getting “back to basics” in the fight for foot traffic. Patrick Maloney, NMG’s EVP of Membership, jumped on the Independent Thinking Podcast to expand on that message — and share some highlights from the show.
Rob Stott: All right. We are back on the Independent Thinking Podcast and if you’re watching the video version, it might be a battle of the short sleeve Ts, is that? Or a short sleeve button-ups. What we got going on?
Patrick Maloney: No, it’s just rolled up.
Rob Stott: Oh, it’s just rolled up. All right. Well the battle of the button-ups over here. Mine is not buttoned up, but I’m trying to hang onto summer here. You get the bright colors. You got the early spring vibes going, Mr. Patrick Maloney.
Patrick Maloney: Just I’m trying to draw attention away from my face.
Rob Stott: Hey, every day, man. Me too. I hear you. But no, I appreciate you hopping on early this morning and getting ready to chat with us on a podcast here. Our EVP of membership jumping into the podcast. And I think this is two weeks in a row now. I’ve had someone that I’ve podcasted with in a previous life, but not on this podcast. It’s nice to be able to have you on here and do this for the Nationwide family.
Patrick Maloney: Yeah, no, I appreciate you having me.
Rob Stott: Well, for those that don’t know, aside from being someone that has no problem making height jokes in front of our thousand of our friends in Orlando, what would you say, what’s the brief background on Patrick Maloney and who you are and a brief background on you?
Patrick Maloney: Yeah, it’s funny you say that. I don’t even notice that I say those things. And somebody, like four people come up and like, “Oh, man. I love that you can make those jokes.” I’m like, “What joke?” Yeah. But yeah, and I’m short so what are you going to do?
But hey, first of all, thanks for having me. I’ve been with Nationwide nine and a half years. Nine years and six months this month. And I have done a couple different things. Currently I manage our field team and our new events team. We’ve got a field team of about 50 folks that are in the market every single day, working hand in hand with our members and trying to solve real world problems.
The cool thing about it is they’re a conduit for us to get two-way communication to our members. Whether it’s us saying, “Hey, this is the latest and greatest thing.” But probably more importantly, we get information back from our members that we can make actionable. Here’s a real-world challenge that we need a solution for.
It’s been a very rewarding role for me and working with this really uber talented team of folks out in the field. When I first started with Nationwide, I worked in the merchandising piece of the business, so I ran our appliance business for several years. And then I took over all of merchandising over all the categories. There’s not a lot going on in this head, but there’s a lot of merchandising and member first focus that I’ve learned through the years of being here.
Rob Stott: Well, what do you think about that transition over from the merchandising side? Any advantage in your current role in what you’re doing?
Patrick Maloney: Yeah, for sure. I would say this. And this is, it’s funny, Tom Hickman our president and I, when we look back at our careers, we’ve had these, they’re paralleled. We never worked together until we got to Nationwide. But I would say both of us had manufacturing backgrounds. He was on the CE side of the business, I was on the appliance side of the business.
And then, both had some retail experience. And then jumped onto this side of the business. As those things in your mind, you know how the manufacturer works and you know what the retailer needs. And it’s very similar even within this organization. With each merchandiser, it’s the appliance deal or the furniture and bedding deal, it’s the most important thing that we’ve got to get out.
But on this side of the business, you understand that these guys, every single one of our owners, they’re like Chief cook and bottle washer. They’re doing everything for their organization every single day. They turn the sign open, they make sure the fuel’s in the truck and the insurance is paid. And sometimes, where you think it’s the most important thing, you’ve got to rush this to them, they’ve got other things going on in their businesses.
One of the biggest challenges we have is figuring out what message to deliver and what is the most important thing. And that comes with just listening to the members’ needs. And saying, “Okay, we’ve got this or we’ve got that for you.” Not just trying to hit them with a fire hose of information.
Rob Stott: Which I know can certainly be a stride. You’re talking to a communicator so I know that challenge man. It’s interesting to navigate for sure. But you mentioned the two parts of the business that you’re currently overseeing and I know we’ll dive into both.
I want to start on the event side because we’re just coming off, we’re just fresh off of PrimeTime. I was just saying in another episode too, it feels like it was either a day ago or a month ago. I’m not really sure. I’m in this weird feeling of how long ago was PrimeTime? But that first event we did it all in-house. I want to first get your take on having that new events team. It’s obviously in a very exciting time for Nationwide here. What’s just your initial takeaway from PrimeTime and what that experience was like?
Patrick Maloney: Yeah, I’d say a couple things. One is, yeah, we did take the events program in-house and we had been partnered with a partner for years that did a great job and taught us a lot of great things. But we felt like we wanted to practice what we preach. We tell our members, “Hey, they need to own the experience. All of these things you got to train.” And we were sourcing that out. It was a great opportunity for us to take it in and practice what we preach.
We had brought Melissa Stenson in a few years back to help run some of our VIP events and some regional events. And she put together this just world class team to help support her. And it’s one of those things where I knew she was awesome at what she did, but you just never know how someone’s going to be as a manager.
And she brought in great people and then gave them direction and got out of their way and let them do their jobs. And I mean the result was phenomenal. And again, this was our first one. We had people that, “Oh, what? We didn’t really even realize.” That’s probably the best compliment. “Oh, it seems like the same thing.” But we had a majority of folks came up and said, “Something’s different. Something feels… Something’s cleaner, quicker, faster, more efficient.”
We got a ton of praise for that. But I think the opportunity for us as we go into the future is to really own this and do different and unique things. We’re excited, really, really excited about that.
Rob Stott: And I mean the crazy thing is you see how quickly that team came together and just gelled. And it was awesome to see the… Sometimes some areas of the business, you got to wait a little bit for results. They got to see it in person in action as they were doing it. It was cool to see the proof was in the pudding, if you will, down there [inaudible 00:06:46].
Patrick Maloney: And it’s one of those things. I work with them every… We had meetings a couple of times a week leading up to it for months. But when you see there’s boots on the street and people are running around and everybody’s calm and everything’s working efficiently, I was humbled by how incredible they handled it.
Rob Stott: Yeah. How about on the… You mentioned a little bit some of the member feedback. Obviously great to hear that some of them didn’t even recognize. But just from the experience in general, what was the feeling coming out of PrimeTime for you from the membership?
Patrick Maloney: Yeah. Well, we think PrimeTime was a huge success, both for our members and for our vendors. But really, it just felt like we were back. Although we had a show in Phoenix, this one just felt like it had more energy. And I think it had a lot to do with what’s going on in the market, inventory starting to level. Manufacturers came with some pretty aggressive programming.
We had some really cool things going on in our luxury space, that focus continues. And we had SKS, we had a Thermador, a Monogram, Fisher & Paykel. Just really cool events going on on the show floor for those folks that were engaged in luxury. As always, our member to member interaction, that peer interaction is such a big piece of what we do. But exclusive brands like Element Appliance had a great show. I’d say overall for the member manufacturer relationship, that was really strong.
I’ll tell you, I had one of our largest members tell me, unsolicited, he said, “Listen, I got up every single morning with the birds to go to your Nationwide learning academies.” These MLAs, he said, “I’ve been going to them and they just keep getting better and better and better and they make me, I get up earlier and earlier and earlier just to be there.” But he said the content just continues to wow.
And it’s again, that real world problem solving, whether it’s a Service Leaders Network or human resources. There’s just so many different pieces of information that they can gain out of this. I would say we sat in a meeting where we had some members. And I looked around the room and each member had between five and seven folks with them sitting at this meeting. And I was like, “Wow, that’s interesting. Usually just used to be just the principles and the buyer came.”
But with our expanded touch points, with like I said, whether it’s service or HR or whatever it is, delivery and install, we’re seeing our members bring more people from their organization that head up different parts of their organization to learn. And that’s rewarding and challenging. We need to come up with more and more content and solve more problems. But I was blown away at how many folks actual individual members brought.
Rob Stott: Yeah, and I mean you said it. That member example again up earlier, when you go to a breakfast, you see 7:00 AM on the schedule and you’re expecting it to be able to just walk in. I’ll walk in, I’ll get whatever I want, get right to the front of that book. And it’s packed, it’s a really eye-opening at first experience the first time.
And then you’re like, “Well, yeah.” You see what’s going on there and you get it. It’s like they’re engaged with the show, they’re engaged with the content and want to be up and talking with one another. And it was very much that. And this segues into the next question, but almost like a getting back to normal feeling for what PrimeTime has always been like.
You think beyond this pandemic as things are turning around and things. But I know that too, that getting back to normal, back to the basics, that was a big push at this show and we heard it on the main stage and both when Tom was on stage and then you and Aaron took the stage as well. Talk about that a little bit, about this message of getting back to the basics as a retailer and why you guys were trying to drive that home at the show.
Patrick Maloney: Yeah, yeah. And when you say it, it sounds overly simplified. Hey, let’s we’ll get back to basics. No problem.” And to your point, we said it in the keynote, we said it from the main stage. And one of the things we said, and I said it to the group was, over the last several years we could be less than perfect and still run this wildly successful business.
Essentially customers just came in and said, “If you have it, I don’t care what color it is, I’m taking it.” I wouldn’t say fat and happy, but we created some bad practices or tendencies. I think about how many dealers tell me they were holding inventory for customers. They were overstocked with inventory, but they didn’t have anything to sell because they were holding it for customers for this one last piece. Making multiple trips to the same consumer’s home, taking your eye off the extended warranty attachment.
Just simple stuff that, things that they would do every single day that got them to where they are today. And so we said, “Just got to get back to basics. Look at your floor, look at your planogram.” Over the last couple years, they’ve been filling it with whatever they could. If they’re even filling it. There could just be a hole. But we actually, we joked from the main stage too. I think people were going into every single corner and recess of their warehouse and just pulling whatever they had out, putting it on the floor so there wasn’t an empty space.
And we said, “Raise your hand if you have a Harvest Gold refrigerator on your floor today.” And unfortunately, there were a couple hands that went up. Just that type of thing, that how do we just get back to focusing on the strengths that got you there?
Rob Stott: No, that makes a lot of sense. And I mean, you mentioned it from the merchandising and what is on the show floor perspective, is there other areas of the business that you think they can focus more on or that should be given more attention right now that maybe weren’t over the pan?
Because I mean, not to say that business was easy, but to your point, if a customer was out looking for something, supply chain issues were a challenge. It was almost like everyone was in this mindset of if you have it, I’ll take it. And obviously, as things get back, that’s not where we are anymore. But are there certain areas, whether it is on the show floor or is it other parts of the business that really need to be emphasized more for from the retail perspective?
Patrick Maloney: Yeah, I would say almost across the board, within their entire organization it’s time to focus on just getting back to your efficiencies. Where again, prior to the last two years, our folks were running these wildly efficient businesses that they knew exactly how many stops that truck was going to make. They were looking at attachment rates of extended warranties, they were training, training, training.
The salesperson knew exactly what models they were going to push this week. They knew exactly what promotion was happening. And like I said, over the last couple of years probably, it just got easier to do a transaction. There was no sales involved. And so, through the course of this, these last couple of years, I would say there’s new folks in the store that don’t know the old ways, they don’t know the process. And so, what we’ve emphasized with all of our dealers is just, it’s your business, run your business. Don’t let the business run you.
And again, I had another member that’s a really large member. I went down on my floor and just said, “What are we doing? What happened?” And it’s not one of those, I think they probably knew in the back of their mind that, “Hey, we got to get this right, but I’ll do it tomorrow.” Well, it’s tomorrow. And so, really figuring out efficiencies on your floor, delivery, install, all of those things where you can get better. And utilize, whether it’s product training or sales training where I think that their focus needs to be. The other area I’d say is probably advertising. Things are changing. Foot traffic is down and P maps are starting to come back. Promotional advertising prices are coming back.
It feels like Big Box, they only have one lever. Their lever is, “Hey, we’re going to cut price.” And so, we’ve had really successful businesses fighting that same fight for years, again outside of the last couple years. We know that, but it’s just getting those muscles back in shape to do that. And so, when we talk about advertising, maybe it’s not a big remodel advertising, but more focused on customers that are coming in under duress and replacement. Focus on in stock, on display, that type of thing. And then, even those ones that aren’t coming in under duress or are more discerning. They’re not just saying, “Hey, you’ve got it, I want it.” They want to now know how the piece works or they saw this other price. You just need to be ready to engage a customer at that level.
Rob Stott: It’s another maybe bad metaphor, but it’s like the pandemic 15 that we all put on that we’ve realized like, “Oh, crap. We got to get back to the gym. Gyms are open, we got to go work out again.” And there’s not one set of body muscles that you work out, you got to work out the whole body.
It’s similar for the retailer. They might have gotten a little relaxed in how they went about business over the last couple of years, the pandemic was going on and business was a little different. But now it’s time to all right, we’ll get back to what we were doing. And rework the retail muscles, if you will of how they had to fight for business and compete with the big box across the street, that sort of stuff. I mean, it makes sense the way you’re describing it.
Patrick Maloney: And it’s not, as we have those conversations and these conversations come from members as well. There’s not like, “What you call me?” They’re like, “Oh my gosh. You know what? You’re right. I do.” And I think it just takes either… And again, some of this comes up in those peer-to-peer communications. I think when you hear it from somebody else that’s been fighting the fight a couple of counties over, they go, “Oh, you know what? You’re right.” And so, we’ve got a ton of tools in place to help get back to the gym. We’ve got the gym. We got all the equipment here. How do you get to use it?
Rob Stott: Absolutely. Well, that’s a great transition because I want to dive into some of those things. You talk about getting the show floor right or getting your showroom right and showing the right product, that sort of stuff. I know we’ve got, I think, to PriMetrix and everything that has happened in that area. You talk about the multi versatile workout equipment that exists in gyms where you can do 17 different workouts. PriMetrix seems to be that sort of tool bench there.
And we’ve got market, we’ve got the assortment rationalization tool and the POS benchmark. All that stuff that we’re a couple years in now. It’s what are you seeing from the tool and how members are using it and the benefits it had?
Patrick Maloney: Yeah, I will say this is one of those ones that’s, for Tom and I, it’s been this passion project for the last five or six years. And again, coming from the manufacturing side. And we both ran independent business on the manufacturing side. And so, we would sit in meetings and let’s say, “Hey, we ran this event over the weekend.” Monday morning come in. Lowe’s would say, “I sold this many.” Best buy would say, “I sold this many.” Depot would say, “I sold this many.”
And you’d just go, “Well, I don’t know, I think we did good. I talked to two dealers, I think it did well.” There was no… And so, unfortunately, independent retail is getting overlooked in some of those, in the Benton Harbors and Charlottes of the world, Louisvilles of the world where they’re just not getting a seat at the table. Not because they’re not really important to the business. And I could argue more important than Big Box just because of mix, but because of lack of information.
It was just easy to go, “Okay. We know these three factors, let’s go this way.” And so as a result, weren’t getting the nod in, it became apparent through COVID, inventory. And new product development and all of those things along the line. As we built this out, we’re up to I think three and a half billion dollars in retail sales coming in. And it’s every category, every brand. And to your point, we’ve taken that and instead of just downloading all this information, “Hey, we got a bunch of numbers.” We’ve put it into something that’s digestible. And so, whether you want to look at what your market looks like and who your competitors are and who’s selling, here’s a tool for you. If you want to see what your point of sale is doing against the total, here’s the tool for you.
And then I think you mentioned that this assortment rationalization tool, I think is probably one of the most unique and will be the strongest tool that we have in our toolbox for now. I mean we’re going to continue to build on this thing, but this assortment rationalization tool essentially takes the top 50 SKUs by category. And we don’t just rank them by units. There’s an algorithm in there that says, “Hey, this is the most productive SKU that you could put on your floor.”
It has every single price bucket by the industry. Between 2,99 and 3,99, here’s the volume you’re doing down there. And then you can put the members’ lineup. From 10 feet away, it’s looks like a checkerboard, you can see where the holes are and you can see where the opportunities are. From a member standpoint, they can use that to say, “Okay. Well, this is the piece I have, but this is the number one selling piece. I can either go back to this manufacturer and negotiate a better price or I can sub this one out.”
And then, our merchants use that with the manufacturers to say, “Hey, if you want to be number one, what needs to be true.” We are super sensitive about the information. We sign NDAs with all of our members so that we don’t share individual information. But in total you can say, “Hey, here’s where the puck is and here’s where you are, if you want to be.” And then the manufacturer has a choice.
As opposed to in my prior life, it was we didn’t have a choice. It was like, “We’re going to go this way and hopefully,” and then try you to fight for a SKU. We’re seeing manufacturers actively engage our merchant team to say, “What do you need? What needs to be true for us to be one through five?” Or, “We have this opportunity or we have these parts or we have this product. What can we build to really win in this space?”
It’s been, and it’s going to get so much better. But I think a couple things. One, scale alone, just the sheer volume that we have in there. When we first started, it was manual. We were like, “Hey, just send us an Excel sheet or whatever.” Now it’s all being funneled in. We’re working with the POS partners way upstream and they’re sending us the information. And then we’ve taken the information and put it into these, like I said, digestible formats. And so, instead of just getting a bunch of numbers, you’re getting a report that says, “Here’s what I want. Or if you want, “Hey, listen, I only want to see dishwashers. Or I only want to see top load laundry.” Boom, you can do that.
We actually are seeing our manufacturers really, really hungry for it just because it never existed. And then, the second part of it is we’re getting information on Sub Zero, Wolf biking that are traditionally, they’re sold through distribution, sold direct. They haven’t really involved anyone in the independent channel. And we do 95% of the business. Those luxury manufacturers are super engaged in saying, “Oh, okay, this is what our target is.” It’s been really successful.
Rob Stott: The cool thing is on the manufacturer side, it seems like it’s almost creating competition for them. Getting them excited about, “All right, well what can I do?” And wanting to more actively work with our teams and our dealers to improve their rankings, if you will in the tool. But on the member side, I think one of the best examples I heard was that I believe it was at a regional event, where there’s a member who was very active with it.
And I mean the easiest way he described was it took all of the guesswork as a merchant out of his daily life. He could just, instead of saying, “Well, I think.” And I mean this goes prior to the couple years that PriMetrix has been around in this art tool. Is you’d go around and you’d use your gut. What do you think works? What do you think your customers are going to want? And there’s ways you could talk to them and things like that. But now to have hard data to go and make those decisions. And I’m sure something, think back to your retail days, you probably wish you would’ve had.
Patrick Maloney: Oh yeah, yeah. Well, the cool thing about it is it’s just the facts. And from there, you can still use your gut. You can say, “Yeah, I like it, but I still like this piece better because of this and this,” and local market knowledge and all of those things. But it’s funny you say that because we call it art, the science of retail. And so, there is a science behind it, but at the end of the day, you can still finger paint if you want.
Rob Stott: I like that a lot. That’s awesome. But I mean, you mentioned some of the… I know things are way in the works and down the road and probably above both of our heads as far as the possibilities and data and things like that. But what’s ideal state for what PriMetrix is or how it’s used, from on both the member side and the manufacturer side?
Patrick Maloney: Yeah. Yeah. I would say this, we’re probably just by nature, by virtue of our member type and base today, we’re more heavily skewed from a volume standpoint to appliances. That said, we have hundreds of million dollars in mattress sales that are going through there as well.
The short term, and I think we’ve worked out this market, this art and this point-of-sale comparison to where we can continue to scale that up and with excellence. That was one of the things that, as a group, we got together and said, “There’s all these things that we could do down the road, but let’s perfect these, then the process and the system.” And that’s where we are today.
There’s the next step is bringing that mattress furniture and bedding, that piece into that same structure. Now we’ve got the bones, we can just put that meat on it. It’s a unique business, all of those. Because in appliances, it’s a SKU is a SKU is a SKU. And in mattresses, there’s so many different variables. But we’ve got a system in matching and some algorithms built into that that can take like products and push them together. We’re down the path on building that up and I think that will be really powerful in that space.
And then, listen, we’ve talked about this. Maybe I won’t mention any names. But we’re going to be the best resource for independent retail sales, period. Regardless of the category. And it’s something that has been our North Star from day one. I mean when we didn’t have anything, we’re like, “This is where we need to be.” And it’s not for any other reason than to get, to your point, better deals or better values or become a voice at the table for the independent channel within these really important manufacturers’ home offices.
And then we’re always going to work on making it easier for our members to access the information. Because we just, we don’t want to slide a big ream of paper with numbers on it. We want to have actionable things that can come out of it. Because that’s one of those, we always ask ourselves, “So what? Okay. Here are all the numbers. So what?” Well, we want to say, “Hey, here. Do these three things and you could improve your business. Those are our goals to make it something that we can diagnose and then give the medicine, here’s a prescription for solving it.
Rob Stott: No, that’s… Well, to bring it full circle, I mean you think where career path started for you and what you’re doing now. The passion is awesome to see. And the drive to lead the teams that are working on these tools and things like that. And getting the tools in front of our members and obviously on the event side. And helping members bring it all together themselves. Got to be cool from your seat right now to see what you’re working on. And do you miss appliances at all? Do you miss merchandising at all?
Patrick Maloney: Well, yeah, I mean it’s funny. It’s not like I’m out of… You’re never out of it. It’s like The Godfather. But because when I talk about real world challenges with our members, I mean those challenges are with, whether it could be manufacturers, it could be marketing folks. They’re challenges that we’re trying to solve for relate right back to businesses that we’re in. Maybe I’m not on the day to day firefight.
Rob Stott: Sure.
Patrick Maloney: But I don’t feel like I’ve been removed. And to your point, the passion coming to this side of the business nine and a half years ago, I haven’t lost. And Tom is the same way. I credit Tom with that too. What we’re doing every day, trying to keep independent retailers, not only in business but thriving. That, you can put your head on the pillow at night going, “All right, we did, we moved a little bit closer to victory today.” And every day is a fight, every day changes. But I think that passion is what fuels us and hopefully this organization.
Rob Stott: No, it’s awesome to see. And it’s infectious too, man. I mean that wholeheartedly. It’s awesome to talk to you guys and pick your brains and see what the team’s doing. It’s been a pleasure to not only cover but be a part of as well. This is a lot of fun and I know, you got a lot still going on. We’ll end it there and certainly not the last time you’ll be on a podcast for sure. But we appreciate you taking the time, PJ, and diving a little bit into it. It’s cool to see both on the event side and the data and everything else we got going on for our members, what’s going on. We appreciate it.
Patrick Maloney: I appreciate the time. Yeah. Thanks, Rob.