STORES Magazine - January 2009 - (Page 32)

EXECUTIVE SUITE / MULTI-CHANNEL Now Available in Stores! Late-night icon Ronco reinventing itself by boosting retail presence BY CRAIG GUILLOT onco has been a household name since company founder Ron Popeil b e g a n st a rring in his own infomercials in the mid-1950s. From the Ronco Spray Gun to the Veg-o-Matic and Pocket Fisherman, Ronco has generated more than $2 billion from the sale of items “not available in stores.” R Popeil sold Ronco to holding company Fi-Tek VII for $40 million in cash and a $16 million note in 2005, but the pioneering infomercial company was in bankruptcy two years later. Ronco was recently taken over by energetic businessman Larry Nusbaum, who has helped the company generate $1 million in EBITDA (earnings before interest, taxes, depreciation and amortization) following 28 months of consecutive losses. From its inception, Ronco was built upon a business model that called for heavy use of television spots. Already a successful in-person pitchman by the time television reached critical mass in the 1950s, Popeil transitioned his skill set to a medium that allowed him to pitch to thousands at a time. As kitschy as it was, his technique worked: By the 1960s, Popeil and his inventor father Sam became wealthy from the sale of kitchen gadgets like the Dial-O-Matic and Mince-O-Matic. Revenues grew from $200,000 in 1964 to $8.8 million in 1968. That success continued throughout the ensuing decades because Ronco relied on a simple-yet-effective model: Introduce America to one product at a time with informative, clever32 STORES / JANUARY 2009 “TV drives retail and it drives viewership and awareness. When we spend a lot of money on TV, sales go up; when we’re off TV, sales go down.” – Larry Nusbaum ly-pitched infomercials that continuously espoused the item’s benefits. Staged shows with audiences would feature “experts” working with and providing testimonials about the quality and usefulness of Ronco’s products. “Everybody knows Ronco,” says director of sales Barry Gasmer. “It’s a name brand. Whether you get a little snicker or a laugh, they are great products. The rotisseries alone have sold over 10 million [units] worldwide.” Ronco’s infomercials use a systematic reduction in price to establish and reinforce a value proposition, and virtually every mention is followed by the ubiquitous “But wait – there’s more!” as accessories are added to sweeten the deal. Popeil went into semi-retirement years ago, though he continues to develop products like the Electric Food Hydrator for his former comWWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - January 2009

STORES Magazine - Jauary 2008 Contents Executive Editor's Page President's Page Mechanical Marvel P&G Invests in Ocado Now I Remember What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Breaking the Monotony Multi-Channel Concept2Watch E-Commerce Analytics Category Management IT Systems In-Store Technology IT Systems Communications Website Strategy Communications SOA Energy Video Surveillance Employee Theft Online Fraud Industry Perspective Loeb Retail Letter ARTS Update Point of View NRF News Retail Crossword End Cap

STORES Magazine - January 2009

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