The Customizing Of Retail
By Steve Smith -- TWICE, 8/9/2004
It may be the beginning of August, but it certainly isn't usually a quiet time for electronics/appliance retailers and the industries they serve.
During these hot, muggy days (and don't air conditioner vendors and dealers wish they had more hot days earlier in the season?), three buying groups will have their second meetings of the year: BrandSource/AVB and Nationwide in Las Vegas, and MARTA in Scottsdale. (Talk about hot weather climes.)
In addition, many retailers and CE manufacturers are preparing for the CEDIA show, to be held during the first full week of September. As many of you know, CEDIA has grown in importance over the past decade as manufacturers use the event to preview new technology. But another reason for its growth is that more traditional electronics/appliance retailers are offering varying levels of custom installation sales and services.
The driving force behind this building interest in custom installation on the part of traditional electronics/appliance retailers is digital technology. With more HDTVs being sold and more sophisticated home theater systems to sell, as well as home networking (both IT and A/V based), many retailers feel that opportunities abound for them to cash in. And the word "cash" is an operative word, with custom's margins being higher than traditional retail sales.
So the publication of our annual "Retailers To Watch" feature comes at just the right time. The feature centers on best practices. One of the keys for national chains or local mom-and-pop locations is some form of custom installation capability.
Senior editor Alan Wolf, who covers retail for TWICE, and yours truly contacted retailers who are affiliated with traditional electronics or electronics/appliance buying groups to see how they are adapting to the new challenges of the custom market.
When you read the four profiles, which begin on page 16, you will discover some common threads. First off, as more than one buying group exec has told me over the years, "confusion is our friend." Digital CE products provide the magic and the frustration of new technology. Many of these local retailers have had the salespeople over the years to explain the products. Now they are going the next step to go to consumers' homes and install these products.
On the local level they have the in-store expertise Best Buy and several other chains would like, as some national outlets try to become more consumer-friendly to sell these new products.
Many of the dealers we profile in this report are long-standing factors in their markets, and because of it picked up on the custom trend before it became an industry mantra.
But the one negative trend that just about all of these retailers share is finding and keeping top-notch installers. When PC sales boomed in the 1990s, IT support became a thriving business, taking many talented people who years ago would have been involved in CE installation and support. The demand is on for quality installers, which is just another indication that custom installation, for typical installers or traditional retailers, will be a thriving growth area for years to come.
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