We sat down with BrandSource and ProSource MVPs at the group’s Summit in Orlando, Fla., and asked them about the year ahead. Executives there included:

  • David Workman, President and CEO, ProSource
  • Jim Ristow, President and CEO, AVB/BrandSource
  • John White, Chief Marketing Officer and Executive Vice President of Appliances, BrandSource
  • Dave Meekings, President, Expert Warehouse

What programs or initiatives are you promoting to help members market to Millennials?

John White: It’s primarily around our digital assets and digital marketing in terms of making it turnkey for the retailers.

Jim Ristow: We’re going for internal communication with beta testing – very specific text services as a way to communicate with members, or specifically, our Millennials. They can opt in or out but it will be very specific to what might be happening at that moment with that brand or promotion.

Dave Meekings: The Group [BrandSource] also runs Young Professionals for the members. That’s done to make sure we have young professionals in the group, and overall, we’re getting feedback out of that on what translates for Millennials in the group.

David Workman: That [digital assets] is a good example of the strength of this organization… You have to rethink what you’re doing in terms of the marketing to that particular demographic. We have dealers that are very prominent in ecommerce and otherwise. You would assume they would have it all figured out, and they’re, in fact, even using the digital assets available through AVB.

What do you believe is the hottest topic at the convention and how are you addressing it?

Ristow: When we get positive feedback about having our conventions or summits, it almost doesn’t matter the division, it’s about our members interacting with other members.

Workman: One thing I hear is that a lot of the guys who are members started from the technical side of the business. I think learning to be a business person and not [just] an enthusiast is a thing that they recognize they need to develop, and us bringing tools for them to do so is a hot topic.

[On the topic of succession planning, Workman said of BrandSource] On their side, they’re trying to figure out how to figure the succession plan; our guys are trying to figure out how to build a business so they have someone to inherit it.

Ristow: The good news, I think to answer that question, what we try to do is look at everyone’s curriculum for this event – we try to focus on what the members are telling us they need. So succession planning is one of the core education classes.

How do BrandSource’s and ProSource’s Q1 sales compare to last year’s?

(The executives unanimously agreed that both groups are outpacing the industry.)

What factors, technology or market wise, do you think will slow down or build momentum through the next year?

Workman: I think you’re still really dealing with the continuation of growth trends: The 4K option, the technology support within television, wireless multiroom and how that comes forward this year in the marketplace. Within the traditional verticals that we have on the electronics side… it’s really a continuation of the same with evolutions going on underneath it to produce growth.

The whole automation [trend] – home, shades, lighting and everything else – that’s where the Internet of Things comes into play because that market is the one that we are, with pretty strong confidence, believing that we’ll grow 15 to 20 percent again this year. It’s more longer range in the way you can predict the business, and all indications show that we’re off to a very good start.

Because of the tough weather in the Northeast last year, we’ve had an easy quarter [compared to last year’s]. We got a running start.

White: I’d say, on the appliance side, new home construction still looks good, especially single family. We’re not quite to that million starts [level] but we’re getting close from a single family home construction [standpoint], which obviously impacts all of us on both sides of the fence, but really on the appliance side, because there is so much stuff that goes into every new home regardless of what it costs.

We still have some industry windfalls, some holdbacks from some tough years that are still kind of coming into place. And then, certainly, some of the colors that manufacturers have brought out, it’s really driving the consumer to change more than just “what broke.” So if you decide, hey I love this new color, whatever it is, black, stainless, slate, whatever those are, it doesn’t look good to put that in if it doesn’t match the other stuff, so that’s driving additional sales in the category.

Ristow: And on the appliance/TV side as well, we’re trying to get our members to diversify even more. We’ve done a great job putting them into bedding but we actually put a marker in the sand that we’re going to double our bedding business in the next three years. We need more profitability, more footprints, so that’s going to be a great opportunity.

How quickly do you think margins will deteriorate for a 4K Ultra HD TV?

Workman: We still think that there’s probably another year of really good margin; we can’t really see beyond that. I think the programs we have in place, which are, if you sell up, which is always the game in any margin story, there’s enough technology for us to protect margins this year.

Do you think that pricing declines will be as rapid as in the past?

Workman: Of course, but the fact is – and this is one thing I truly believe in any of the categories – customers will buy performance. The industry tried to save itself with gingerbread features, 3D, whatever, that could never create enough value premium that a customer would spend one nickel more than they would have otherwise. So all we ended up doing was packing more stuff into a set and still seeing the price go down. The exception to that is performance and HDR, OLED, call it what you will, Super UHD – those are all performance stories that are demonstrative. That’s where you get the value premium.

That, combined with the fact that content, which is the one thing we haven’t had yet in 4K, content always drives greater adoption, and for the most part, 4K has been sold as a concept without reality. So once content becomes available, that’s where we think it’s so important for our type of dealer to demonstrate with either 4K Blu-ray or whatever, demonstrate to people what HDR looks like, instead of just talking about it. And if they can do all that, we are actually very optimistic about the television market for this year.

Because of the increasing strain on home networks that have to handle signals from multiple devices, there is more pressure on your membership to gain expertise in installing more robust networks in consumer’s homes. How are you helping your dealers get up to speed on this area of expertise?

Workman: Actually this is an area that our dealers have become pretty proficient in. This is one of those things that just happened. Three years ago, these guys were saying, ‘I don’t know how to do network, I’m not a computer guy,’ or whatever; now, they’re subject matter experts. They’re there. They’re there. We don’t have to really help them.

Ristow: The ProSource channel is there today and as the Internet of Things becomes even more and more relevant, ProSource is going to help BrandSource.

Workman: That learning curve is behind us, but I do believe there is a migration that has to occur to other channels, and that’s where the strength of this organization works.