55: Tom Hickman Tackles Nationwide Members’ Questions

Written by Rob Stott

February 2, 2021

We collected a wide swath of questions from you, our listeners, and boiled them down to some of the most-asked-about topics for President and Chief Member Advocate Tom Hickman to address.

Rob Stott: All right. We are here on the Independent Thinking Podcast, and Tom, it’s been almost a year since you and I actually got on the podcast. Sorry I’ve been talking to members and vendors, and haven’t had time for you in my life, but …

Tom Hickman: No. Those are much more important people. But, particularly the member part, right? I love hearing their stories, and I know they like to hear each other’s stories, and they like to kind of tell their stories.

Rob Stott: Absolutely, absolutely. There have been some interesting ones this past year. So, I mean-

Tom Hickman: We got some interesting members, right?

Rob Stott: Interesting members, and then you throw a pandemic on top of everything, and it’s made for quite the year of podcasts and stories and interviews. I want to start there, though. Since it has been a year, just take a second to reflect on what the last 12 months have been like since … I mean, really, we were all together in Houston, feels like the last time we were able to chat at least on the podcast.

Tom Hickman: Yeah. Yeah. Yeah, you probably heard the big sigh, right? So, yeah. I mean, I look at it, it almost feels like 10 years. Almost a decade in one year, right? Because there were many seasons inside that year. And so, if I go back, literally, to Houston and coming off of a fantastic show, it’s really kind of the first time we started to hear about the virus and some things, but it was mostly just in … candidly, around supply chain, right? We were going to have some challenges, maybe get into some product, and that, obviously, exploded into a completely different challenge.

And so, for me, if I had to just bookend it, it would be … The range of emotions from, frankly, just really scared for our membership and scared for the country and scared for the health of … You know, because to just … There was a whole lot of unknown, right?

And then, it felt like all that kind of reached a peak in maybe May, and we kind of navigated essential businesses. There was a moment to breathe at least for some of our … I know there was a large part of our members that couldn’t because they were closed, and particularly, the furniture and bedding space, and appliance and electronic space, there was just that kind of moment for them to take a breath, right? And like, “Okay. Maybe …” And then some government help came, and there was maybe the idea that we were going to get through this a little bit safer than we thought, at least from a business perspective.

And then you kind of ride … So, that felt like the top of the wave. I grew up surfing, so I just kind of think of things in that … Kind of riding into shore was a little more peaceful, right? We kind of found the normal. I would say at least a normal inside all the chaos sometime in September and October. And we found ourselves, in a lot of cases, back open, and I’m speaking for the membership, obviously, and in a lot of cases, way more demand than we had supply. And so, we had this tumultuous, I would say, 120 days where it was, “What was going to happen to our businesses?” Versus, “How are we going to get more business and be safe?”

We saw big box shut down, and the Independent had to step in and fill that channel. I don’t know … One of the stories you hear is little old lady whose refrigerator broke, and she’s crying, calling around, trying to find somebody to deliver it and couldn’t, right? And so, she found one of our members locally that was still willing to go inside safely and deliver.

And so, I think about how many times that happened. And so, I look back on it as … I told somebody the other day, we learned skills and tools to put in our toolbox that I hope we never whip out again. You know what I mean?

Rob Stott: Yeah.

Tom Hickman: It’s like that weird wrench you have to buy that one time because it’s the only thing that fits, and you put it in your toolbox, you’re like, “I hope I never have to try to figure that out again.”

Rob Stott: Yeah.

Tom Hickman: But, you know, it’s been … I think I’ve had every emotion in the last year, and you always have every emotion in a year, but not as high and as low as [inaudible 00:04:18].

Rob Stott: Yeah. It’s been quite the year, and I know, just the range of stories, too. You talked to members that did have their store shut down, and having to reopen and what that’s been like, and it’s just like you said, a toolbox you hope you never have to open again. I would love to kill the Back to Business hub on our website and never have to relaunch that page, but we’ll save it. It’s there. We built it. We’ll save it. And-

Tom Hickman: As I like to say, we have that muscle, right?

Rob Stott: Yeah.

Tom Hickman: But I’ll let it atrophy to the point that maybe we don’t want to use it, but it was pretty interesting to watch everybody adapt. And I mean, everybody, I mean retail, too, right? The membership, the vendors adapting, trying to figure out where’s the right place to put product, and then, nation-wide, obviously, adapting to serve different needs for the membership.

So, it was … Yeah. I feel like I aged a decade in the last 12 months.

Rob Stott: Well, I think you’re far from the only one to feel that way.

Tom Hickman: Oh, no. I think everybody feels that way.

Rob Stott: This year, it felt nice to close the books on 2020, for sure. And I know, it’s kind of a nice segue because with this episode, we got a lot of input from members. You know, I usually am the one asking questions, and I wanted to get at least one in before we dove into the meat of this.

We got some Ask Me Anything-styled questions. A mail bag episode. Have some fun with this. But we’ll start there because it’s a nice segue talking about you’ve been able to reflect now here to open this podcast, but now, looking ahead.

Question one that we got from members was about looking ahead related to how things are going, I know you may not have come prepared with specific numbers, but as you look ahead to 2021 and where you project things going, do you see things getting better with our verticals, with CE, and furniture, and appliances?

Tom Hickman: Yeah. I mean, I grew up in a Japanese company. I always come with numbers, right? So, I mean, the timing’s good because we kind of wrapped up in November, December of our 2021 plan. And talked to a lot of suppliers, talked to a lot of members. I think we’re going to see for some period of time, at least, in the first half of the year a lot of what we’ve seen in the back half of the year, right?

As we continue to kind of get our arms around what safe looks like at retail, and what safe looks like in the factories, candidly. So, I think we’re going to continue to see what I would call a demand outstripping supply, probably, for I would say at least another 120 days or so. Right?

And one of our partners talks about a tale of two halves, and it very much feels that way. It’s shaping up that way. And we were talking to some of our other folks that we look at economic … You know, the environment. And it feels very much that way.

So, I think we’ll see a lot of what we have right now. So, brisk demand across all categories, right? People are still home. There’s been significant back order. We’re digging into those and our members are digging into those. There’s not near enough inventory in the chain, in any category, but we’ll continue to see a lot of people at home and a lot of demand.

Rob Stott: Now-

Tom Hickman:

Rob Stott: Oh, go ahead.

Tom Hickman: No, no. You go. Ask the question.

Rob Stott: So, the impact on margin, that was another sort of follow-up to this. The supply and demand issue, does that impact retailer’s ability for margin?

Tom Hickman: Yes. But good for margin, right? Because you haven’t seen a lot of discount in any categories, right? We didn’t see a Black Friday of buy a TV, get a refrigerator for free, right? Now, obviously, I’m being facetious there, but the promotional activity, we just aren’t seeing it. And for good reason.

Demand is high. We’re hearing that supply is low. So, a lot of our partners didn’t have a lot of promotional activity for good reason, right? And so, the good side of that is our members make a little bit more money, right?

Rob Stott: Yeah.

Tom Hickman: So, margin, I think, is going to be good, and I think it has been good for a while and will continue to be good. And then, the interesting part is the vac happening, right?

So, what happens in a vaccinated world? I know you got a baby at home, but you probably promised your other one to go somewhere, and I know I certainly promised my family a family vacation once it’s safe to travel. And so, we do think there’s going to be this shift back to service and travel and entertainment that will affect overall demand. But every time I talk about a headwind, that being a headwind specifically for our business, I think good for the overall economy, but maybe specific to our business a little bit of a headwind in terms of keeping the same amount of demand in the channel. There is every indicator that demand’s going to stay the same, right?

I think being around the house is going to be a permanent behavior for a long time. The math doesn’t lie. The statistics don’t lie. Urban flight is real. Housing starts are still strong. The feds come out and said they’re not going to change interest rates for the next few years, which is the largest driver in new home builds.

So, we’re on this … We’re products being use, the duress number, the products that are breaking every day, it’s not rocket science, right?

Rob Stott: Right.

Tom Hickman: I mean, we’re running our washing machines, dish washers, refrigerators, all the things you’ve heard. So, we’re pulling for a duress. So, for every headwind of where we might see discretionary funding leaving the business, or leaving the industry, we have every reason to believe that it’s going to stay, that it’ll be offset by some really kind of cyclical and/or built-in demand.

So, although I do think we’ll see a lot more people traveling … And I think that’s great. I mean, we need a healthy overall economy. I think that’s great. I think we’ll still see strong demand in the back half. Maybe not … And we’ll have supply start to meet that, right? They can build product in a safer way.

So, I think it’ll be more an equilibrium in the back half, and then we might start seeing promotional activity again, which, depending on how you feel about that, might be great, might not be great.

Rob Stott: Right. And you touch on it there at the end, but the supply … If demand stays high, I guess waiting on that vaccine to get around, that’ll ease the restrictions on manufacturing. But is there …

And I know it’ll vary from industry to industry, from appliances to CE and furniture, bedding, but is there a guesstimate on when you think margin … Or, not margin. Rather, supply will start to catch up to ease the supply chain issues?

Tom Hickman: Yeah. Well, I mean, we’re already seeing some supply catch up, right? Just because they’re learning to operate safer in the factories, right? And so, we’ve been seeing it, I would tell you, probably since late-October into November and December. But they’re still working at half-capacity, socially distanced.

So, a vaccinated environment may look different than that, and so, overall yield’s going to go higher. It’s going to get higher. And so, it’ll get back in line faster. Feels like Q3, you know? But they’ll be able to get that all caught up, and then maybe we’ll actually have stock, you can go walk out to the back of the warehouse and load it up in your truck or deliver it the next day. That’s my hope.

Rob Stott: Fingers crossed.

Tom Hickman: It’s a great competitive advantage for independents to be able to deliver next day, right? We haven’t been able to do that for a long time.

Rob Stott: Right, right.

Tom Hickman: We haven’t been able to deliver next week in some cases, but we need to get back to where we can lean into our competitive advantages.

Rob Stott: Right. And related to that, kind of following up with the next member-submitted question we saw a lot of, was, with supply being an issue right now, lot of questions around what Nationwide’s doing, how we’re talking with vendors to ensure that independents continue to get their fair share, and certain supply isn’t being sent to big box stores and things like that. So, what is Nationwide doing with the vendor community to ensure that we continue to get our fair share?

Tom Hickman: Yeah. It’s a great question, and one I feel with varying degrees of enthusiasm, let me put it that way, from members just about every day.

You know, there is kind of the strategic, and then the tactical, and then the actual what happens, right? So, we know by looking at what’s going on around year over year orders that the independent channel is getting its unfair share, right? There’s a lot of reasons for that. We don’t need to get into all of why.

The bottom line is is that, we’ve gained a lot of share. The channel’s gained a lot of share. You know, Best Buy was closed. Depot and Lowe’s … We’re a better experience. We can still service. So, we have … Although it hasn’t felt that way, and I want to be very clear, because there’s going to be some members that listen to this and call me completely out-of-touch, right? Because they haven’t seen their unfair share, and I understand that, and I’m not suggesting that inventory is in line in any way, shape, or form.

I do know and believe that we are getting our unfair share because we have weekly meetings with all our major suppliers, “Hey, where are we? Give me a factory update,” you know what I mean? Doug Wrede, and Mike Derro with Jeff Rose, it turned into supply chain, right? Because I’ve been on the calls. They’re talking about what factories are going down. We’re trying to share that information back out. How is that affecting us?

So, you have to trust that those guys are in there just fighting on your behalf. And there’s a lot of good reasons for product to come out late, right? Higher ASP, better experience for their retailer. We were still delivering in a lot of cases. So, again, I know there’s a bunch of … People are going to listen to this and tell you I’m completely out-of-touch, but the guys are working their butts off with the vendors weekly, and then, sometimes twice a week, to talk about supply chain updates, where the challenges are, where we can our unfair share, and in what categories.

Rob Stott: Definitely. And you know what? Along the lines of category questions, I think one of the most popular we’ve gotten, and I’m sure you hear this constantly, too, is maybe not something we’re thinking about … Well, I’m sure we’re always thinking about it, but in the middle of a pandemic and given other issues, the immediacy of something like this may not be right front and center.

But, as far as expanding categories, Nationwide looking to stand up on their verticals and other areas of adding to what vendors might be able to come in, what sort of …

I’ll make it a two-part question. A, are we? And B, what’s the process like as you evaluate where we can expand?

Tom Hickman: Yeah. The answer to the first part of your question is, always. Right? I mean, if you look at … I mean, go back 15 years, 20 years, we weren’t in the bedding business. So, that was something that we expanded into. And then you look at more recently, outdoor, connected services, AT&T, smart home, you know?

So, yeah. Part of our job, maybe a little heightened or dampened, in the pandemic is to look around corners and go find new products, new categories for our members to carry. And I just think about … The…PJ Orsini is popping into my head, and he’ll love the fact that I talked about him on … One of our members, one of our really progressive guys. But just listen to him tell you about his outdoor story and how it’s changed his business.

And so, when I’m watching the outdoor business grow, and now, watching a fledgling connected services business, AT&T, broadband, grow as well, yeah. I mean, I think there’s things we’re going to learn out of the pandemic, and more things around the house. Now, I don’t know specifically. I think we got a huge run coming with smart home. Maybe that got shelved a little bit with all the chaos, but I think there is … Home and health is going to be big, right? Monitoring what’s going on around your house, monitoring what’s going on with you. I think it’ll continue to expand.

Yeah. The biz dev team’s charged with that. They’re always bringing us stuff, and we’re like, “Okay. That’s too far outfield. Let’s try to get a little closer to our core business from time to time.”

Rob Stott: Right, right. No, that makes a lot of sense. And it’ll be interesting too, because like you said, there’s sort of parallel verticals of everything that makes sense around that. And smart home, specifically, right now, is … You know, as people sit around their homes, and we’re just coming off of CES not too long ago, seeing all those things always gets me excited to see what sort of things … Did you see KOHLER’s smart bathtub, by chance?

Tom Hickman: No. I didn’t. But it doesn’t surprise me. We’ll probably have a smart bathtub before we have autonomous cars, and probably use it more often than autonomous cars.

Rob Stott: Yeah. That and the toilet’s that flush themselves and put the seat down so you’re not getting yelled at at home. Those things are always awesome.

Tom Hickman: Yeah. Those are real value-adders, right?

Rob Stott: Absolutely, absolutely. So, related to other … Not on the product side, but the services side, a lot of other questions we got were about … You know, we’ve seen things like the Tech Smart partnership, and product protection and things like that get stood up. What other areas could Nationwide possibly expand into as far as on the customer service side of things for members and those types of offerings, whether … I don’t know. Delivery. You talked about delivery earlier. Any other of those areas that are being explored or looked into?

Tom Hickman: Yeah. You’ll see a giant push onto service for us, and it’s not that we haven’t been highly-focused on it. We’ve had Service Leaders Network and performance groups for a long time, but it continues to be and will continue to be two things: The bane of existence of the independent retailer. Service is just a tough part of business. But it will also be an opportunity and a competitive advantage, and I think it’s going to stay that way. And so, anytime you have a problem that has to be solved at retail coupled very closely with an opportunity to have a competitive advantage, it’s going to require training and focus and some groups, but you’ll see a big push and a big effort out of us around service and solving that challenge.

The other thing I would tell you is I talk to a lot of members, and not one that I have talked to has been able to get enough talented people in their business, right? And so, you think about human capital, and human assets, and what drives their business. And so, maybe a little bit slightly further down the path, but you’re going to see the group use its scale and size to try to solve that problem in a way that helps our members be more efficient in finding good folks and helping them find good folks, because it’s … I was reading … A member visited the other day. Somebody hired 20 people in October.

Rob Stott: Wow.

Tom Hickman: And that’s great because we have people that have been looking for people since October. So, I would tell you in the business services side, there’s definitely room for service and we’ve got a road map there and a plan there. You’ll see it pretty quickly. And then, human capital is going to be a big deal.

Rob Stott: No, that’s awesome. And I mean, right now, it feels like that’s always a struggle, especially, it feels like, for smaller businesses finding not just the people, but the talent that can fill those roles. So, a lot of people looking for work right now, too, unfortunately, but it obviously breeds opportunity for businesses to find people that would fill their needs.

Tom Hickman: Yep.

Rob Stott: So, similarly, you talk about the scale of the group and things that can be done. Another couple questions came in related to … Is Nationwide doing anything nationally to talk to consumers about pushing consumers to dealer stores, and things like that? Is that something that’s ever been thought about, or is that something that makes sense for Nationwide?

Tom Hickman: Yeah. I consider us the great transactional lubricant for retailers in between them and their customers. So, yeah. I would tell you, nationally, we are. I mean, we’ve got … Jeez. 60 million unique visitors to our websites as a group, right? So, you take those thousands of websites that are running. We’re running campaigns on those every day, brand awareness, member awareness because, really, you don’t want to be driving people to your store and a product you don’t have, but kind of pivot it to more of a, “Hey, we’re here. We’re safe. We’re serving. We’re still operating.”

And so, in my mind, that’s a national effort. It may be 3,000 rifle shots across the country, but the cumulative effect of that is we’re seeing about 60 million folks, right? So, that’s a lot of people that are hearing, in one shape or another, very tailored to the individual retailer, but the independent story. And that’s pretty amazing if you think about it, you know what I mean?

It’s a pretty powerful message. And so, you get Steve Bryant going, there’s always a global shock and awe campaign, right? But we’re going to stick to our brand promise of helping those retailers, and our retailers and members, thrive on their terms. And so, what their local message is, yeah, we’re pushing it hard, but we want to make sure it’s their message and not a Nationwide message.

And when there’s a need for an overall independent versus the big box SOBs, then we’ll run that ad to you, right? And there’s plenty of those available at PrimeMedia for our members to run that if they feel like it. My favorite is the one with the … Every morning, you get up … You know? That still gives me chills when I see it.

Rob Stott: No, that’s awesome. So, that kind of did it for the business-related question. We got one that was submitted anonymously, that was off-the-wall, that I thought would be fun to close with.

Tom Hickman: Oh, cool. Yeah. Hit me.

Rob Stott: So, here we go. You’ve been told you have one week to live. How would you live it differently? What would be important to you during that week? And would you do anything differently than what you do in normal day-to-day?

Tom Hickman: Yeah. If I only had a week, I’d probably stop working out. I would eat. I try to eat decently. I probably wouldn’t do that. I’d probably drink a little more than I probably should, if I only had a week.

But nah, look, I always kid people, and we talk about it a lot at Nationwide, if you can’t get fired up about helping independent retailers fight big box … So, strangely, I’d probably still come to work a couple of those days. And I’d spend some time with my family. And probably, just the way I’m wired, I’d try to do something on my bucket list stupid to try to edge it in at the 12th hour. You know?

It’s an interesting question. It forces reflection.

Rob Stott: Yeah. Right?

Tom Hickman: Yeah.

Rob Stott: Well, and speaking of reflection, I’d be remiss if we didn’t at least mention sometime on here the hall of fame nod that you recently got with Dealerscope.

I swear I had nothing to do with it, first of all. So, a congratulations on behalf of the Nationwide team and anyone listening. What was that like for you?

Tom Hickman: You know, it felt very much to me the same experience I had around ADL where I just look inwardly, and … It’s fantastic because it means that the group is being recognized in some way, shape, or form, and I have the privilege of leading the group and the people that are in it.

So, it means that we’ve showed up on someone’s radar who’s making a slight difference somewhere in the business over time, and that’s what you want, right? Everybody talks about legacy, and in some ways, it feels like … My dad would say, “If you hang around long enough, you get a participation trophy.” Right?

And so, maybe that’s a little bit of it, but I would like to think it’s more … I have spent most of my career in the independent channel and working on behalf of independents, and if it means that that channel, or that message, or that mission gets raised to a longer arc, then man, give them all to me, right? Give me a chance to get in print to talk about the independent channel. I’ll take it.

Rob Stott: Yeah. No, that’s awesome. And I think it’s always … Even pre-Nationwide days for me, it’s been reflected in the work of the group, and seeing how everything kind of unfolds, and having that sort of mission always be around the members. And it’s infectious. Maybe not the time to be talking about infectious things-

Tom Hickman: No, no.

Rob Stott: … but there’s still positives with that mentality spreading throughout the group, and it’s awesome.

Tom Hickman: Yeah.

Rob Stott: Well-deserved and always awesome to see.

Tom Hickman: I appreciate that. And it’s an honorable position to be able to speak on behalf of the group and in such an incredible group of independent retailers to be able to be the face and the voice of those folks in some boardrooms, in some meeting rooms where maybe it’s not heard as loud as it should, I take that pretty seriously.

Rob Stott: That’s awesome. Well, I appreciate it, and I see the clock behind you telling me that we’ve been doing this for a good chunk of time.

Tom Hickman: Yeah.

Rob Stott: So, I want to let you get back to working on behalf of the independents.

Tom Hickman: No worries. I appreciate the time this morning, Rob, and thanks, as always, for giving us a platform to talk about the channel.

Rob Stott: Yeah, you bet.

Tom Hickman: All right, man.

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