Navigating The Complexities Of Retail, Distribution, Or Manufacturing

In an industry characterized by rapid innovation and dynamic consumer demands, insights from industry leaders are invaluable. TWICE recently had the privilege of delving into the perspectives of Michael O’Shaughnessy, President of Element Electronics and Appliances.

With a distinguished career spanning over two decades, O’Shaughnessy has been at the forefront of pioneering advancements and strategic growth within the electronics and appliance sectors. His leadership has not only propelled Element Electronics to new heights but has also influenced broader market trends and practices.

In this exclusive interview, O’Shaughnessy shares his vision for the future, the challenges and opportunities facing retailers, distributors, and manufacturers, and the strategies that have driven Element’s success in a highly competitive landscape. Whether you’re navigating the complexities of retail, distribution, or manufacturing, O’Shaughnessy’s insights offer a roadmap for thriving in today’s evolving market.

Founding and Early Days

TWICE: Can you tell us about the origins of Element TV and Appliances? What inspired the founding of the company?

Michael O’Shaughnessy (MO): Element Electronics was founded in 2007. We started the company after discussions with Circuit City and identified a market need for a family of high-quality, affordable consumer electronics. The world was different then. Several new technologies were in the consumer electronics categories and a few fundamentally value-focused brands. We saw that as an opportunity and seized on it.

A lot has happened since then, but Element has remained fully committed to delivering exceptional value – and that’s what our brand is all about. Seeing the same opportunity to deliver consistent value where other companies don’t is what led us into the major appliance category a few years ago.

TWICE: What initial challenges did the company face when it first started?

MO: Well, besides all the challenges of starting and scaling a new business, Element lost its anchor retail partner about 18 months after our start (which happened to coincide with the Great Recession). The loss of Circuit City in late 2008 was nearly catastrophic. It took a few years before we really regained our footing, but we did and eventually emerged as a better, more complete company. And now, years later, we again faced numerous and difficult challenges through the Covid economy, including the impact it had on the supply chain as well as consumer demand.

So, in retrospect, Element’s 17-year history has been bookended by incredible challenges. We have been hardened and shaped by them. And I think our successes are a testament to our commitment to our value-first mindset. Through it all, one constant has proved itself time and again: consumers want value and will reward the brands that can deliver it.

Growth and Expansion

TWICE: Can you describe the significant milestones in the growth of Element Appliances over the years?

MO: Sure. With our electronics business and brand position generally established, we turned our attention to the diversification of our business. Having spent many years in the major appliance industry before starting Element, I had a strong desire to expand Element into the category. There are many similarities between appliances and electronics – and some key differences.

The differences are what attracted us. In particular, the major appliances industry has robust independent retailer participation – and our Element brand business is committed to serving that important segment of the industry.

So, the milestones begin with our simple beginning: participation with the Nationwide Marketing Group in 2019 at their PrimeTime show. At that show, we had an opportunity to speak to a subset of their members and tell them about our plans and introduce some products. Then Covid hit, and we pushed pause as we couldn’t effectively start the new business with all the limitations around travel, supply chain, and so on.

But by the time we emerged from Covid, we had built out our extraordinary leadership and sales team, curated a portfolio of value-leading products, and created our “one-touch” service infrastructure that allows us to solve a dealer’s problems in one phone call.

Since that start only a few years ago, we have been able to more thoroughly reveal our regional, market-by-market, dealer-by-dealer approach to delivering our brand value. We’ve expanded to a full range of products, and we have improved our supply chain efficiency. And I would be remiss if I didn’t mention the help we have received to that end from ADC, specifically, and NECO Group (ADC, DMI, INTERCOUNTY, NEAG) generally. Together, they were able to help us bring focus to each step, which has quickened our growth and helped us scale much faster than we originally imagined.

TWICE: How did the company expand its product offerings beyond its initial lineup?

MO: I just mentioned the efficiency of listening to ADC and NECO Group and that is how we work. Element expanded its product offerings by listening to feedback from our retailers. All of them. All of the time. We are refining, expanding, and contracting our offering in constant pursuit of the best value, item by item, in the marketplace.

TWICE: What strategies did Element Appliances use to enter new markets and expand its customer base?

MO: We try to keep things as simple as possible. In this regard, we first seek out strategic partnerships with the buying groups (AVB, NATM & NMG) and independent retailers and focus on providing high-quality products, services, and prices. We employ a “less is more” approach.

We aren’t trying to be all things to all people. Simultaneously, we set out to hire industry veterans who bring forward incredible knowledge and relationships. We hire the best people, teach them our way of doing things, and then fully empower them to run the business. The combination of these forces, when working in synchronicity, is hard to beat.

Innovation and Technology

TWICE: Can you discuss any significant innovations that Element Appliances has introduced to the market?

MO: Element Appliance does not see its primary role in the marketplace as launching new technology. It’s deliberate. Our focus is on value. It is now. It will be tomorrow. That said, we have access to some of the most important digital technology, and we believe these platforms will simplify consumers’ lives. Over time, some of our products will include access to these platforms.

Aside from innovating the product, we believe we are quite innovative within our business at eliminating or minimizing cost drivers, including wasted time or resources, inefficient uses of capital, excessive inventory, space, or touches, human resources, and so on. We have gotten very good at doing much more with a lot less. We think that kind of innovation matters just as much as product-centric innovation.

TWICE: How does the company approach research and development to stay ahead of industry trends?

MO: As mentioned, Element Appliance benefits from its relationship with its “sibling” electronics business and its parent company. We have a long-term strategic point of view about technology and innovation and what will be most important to consumers over time. That said, we must remain disciplined and not over-invest or overplay our hand at any given time. We are committed to being America’s premier low-cost, value-first appliance brand, and we will remain focused on that playbook.

TWICE: What role does sustainability play in the company’s product development and manufacturing processes?

MO: We are committed to sustainability and being a responsible partner. A couple of examples include ensuring that many of our appliances are ENERGY STAR® certified and meeting stringent energy efficiency guidelines. Another is Element’s use of eco-friendly materials and designs that reduce environmental impact while providing cost savings to consumers.

Current Status and Future Direction

TWICE: What is the current market position of Element Appliances, and how does it differentiate itself from competitors?

MO: Today, Element Appliances barely shows up on market share reports. We are selling a limited number of our value-focused products to a limited number of independent retailers. However, our plan to focus exclusively on independent retailers and to consistently provide them with an expanded assortment of affordable, high-quality products will win over time. This, and by focusing on making Element the easiest company to do business with within our industry.

TWICE: How does the company maintain its competitive edge in the current market?

MO: I don’t really see it as Element having an “edge” but rather a very disciplined, proven way of doing business. Everyday low cost is not a fad or an edge – it’s a way of doing things. A commitment to value isn’t an edge; it’s a strategic point of view. Solving our customers’ problems is our reason for being – and it’s something we believe at our core. This is what we are all about.

TWICE: Can you discuss any upcoming product launches or innovations the company is excited about?

MO: The appliance business is rolling out a number of products. New ranges and dishwashers right now, and more refrigeration in the fourth quarter.

TWICE: What is Element Appliances’ vision for the future, and what steps are being taken to achieve it?

MO: Element wants to be the major appliance partner of choice in the value segment for the independent retailer. A once important category for every retailer that was, for one reason or another, often abandoned or overlooked in recent years. Element’s commitment to the category and the retailer should bring a new focus and meaningful success for many.

To achieve this, the company is expanding its product lines, enhancing manufacturing processes, and investing in sustainability initiatives. Element aims to continue delivering products that improve everyday life for customers while maintaining a strong commitment to independent retailers, low-cost and high-value, exceptional service, and meaningful win-win relationships. That’s the future we imagine and strive for every day.

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