Whether you’re a specialty consumer electronics dealer or a custom integrator, you must embrace both higher-end and lower-end solutions to capture a new wave of sales opportunities that is set to flood the channel.
“We have to do it all,” said Jim Ristow, executive vice president of Home Entertainment Source during the general session of the HES Summit, held this week in Orlando, Fla., as part of the BrandSource Summit.
Ristow explained that HES dealer members typically benchmark 80 percent of their business at a certain price point, whether it’s at the higher-end or more in the middle of the market, depending on a dealer’s business model. But a new wave of products – as well as the fact that a dealer’s core competencies, no matter what segment they sell into, can often handle the sale and installation of a wide range of solutions – is opening up a broader range of markets and opportunities for a variety of dealers to capture.
For example, dealers selling into the mid-markets should consider step-up solutions such as enterprise-grade networking; shades and lighting; higher-end audio solutions like premium Bluetooth speakers, sound systems and digital music conversion systems; and commercial solutions. At the same time, high-end custom installers should be showing their customers music streaming systems (such as those from Sonos and a new round of similar systems expected to launch this fall by a handful of competing audio manufacturers), premium headphones, computer speakers, soundbars, and high-priced computer speakers.
In other words, dealers of all stripes should leverage customer relationships built around their heritage legacies to capture whatever new revenue/profit streams and market segments that make sense, Ristow said.
“There’s a huge opportunity coming … but we have to think a little differently than we did in the past,” he told the HES crowd, which included members from the newly formed ProSource, a combination of HES and PRO Group dealers.
Ristow and Bob Lawrence, BrandSource CEO, encouraged the dealers to work at forming tighter relationships with several key BrandSource/HES vendors, all of who are hungry to partner with them. Considering the state of some of the major large CE retailers – including Best Buy, Radio Shack, Sears and even Amazon.com, which suffered declining profits in 2012 – “you are the strongest group,” Lawrence said.
Ristow added that HES and ProSource members have a combined buying power of about $3 billion. The group experienced double-digit growth last year in audio, home control/automation, large-panel TVs, lighting and shades, and commercial.
HES executives urged the dealers to do more in leveraging social media and other types of new marketing strategies to promote what they can do better than their big-box competitors, including product and solution demonstrations, across-the-board installations, the merchandising of better-and-best product categories, pushing higher ASPs, and the ability to be the consumer’s go-to technology expert and solution provider.
While a multitude of challenges continues to plague all segments of the CE and custom industries, there are plenty of bright sides, including a near-record DOW, increases in new housing starts and remodeling, and a resurgence of the luxury market. “It’s not perfect,” Ristow said of the current business climate, “but we can feel the momentum.”
Some of the major solution trends driving that momentum include wireless speakers (“Every speaker vendor is not just looking into this technology, they’re all investing in it,” Ristow said.), new audio, a variety of better and best home control and automation, large-panel TVs (“We’re selling a better class of TVs at higher prices,” he said), shades and lighting, and headphones. Providing consumers with the advice and products they need to leverage the cloud and its related technologies is another category that dealers must begin to leverage.
Ristow also heralded Samsung’s AllShare software as the mainstream alternative to Apple’s AirPlay and TV streaming solutions. “This stuff will be part of our business,” Ristow said, addressing all levels of dealers.
“The tidal wave of opportunity is coming,” he added. “We’re going to dominate in our legacy categories and grow in new areas.”