By Lisa Johnston
New products on display at the American International Toy Fair, held in N
TWICE:What is the future of the independent custom A/V installer?
Burkhardt:For anyone to be successful in any business, you must provide exceptional customer service. The thought of “doom & gloom” for the CEDIA-type dealer is a joke. Our dealers can better serve the market better than any other group... be it mass retail or computer nerds. The end-user only wants one thing: the system to work at the push of the button. Of course, technology will enable many new business start-ups, but to be successful, you must cultivate, maintain, and grow your client database.
Detmer: There is a tremendous future for independent custom A/V installers. As equipment becomes increasingly more complicated to integrate, the demand for installation will grow. The business model enables independent A/V installers to quickly adapt to the market changes without much legacy costs or overhead, so their breakeven point is quite low and they can show a profit. Efficient and focused installers will continue to thrive.
Skaf: People are networking their homes like never before, so those [installers] who are most effective at integrating all of these networks together in a cohesive fashion will dominate this market. Selling individual devices, such as plasmas, high-def stereo systems, and PCs without networking them together is a commodity market that will not grow the installers' businesses. Installers will grow their businesses by expanding into whole-home networking and digital media. Those who combine their expertise will grow and be around for a long time; others will not.
The custom A/V installer will have to evolve as technologies do, stay up-to-date on their product training, and get into the service management of homes and devices. Historically, installers have gone from one job to the next without using services to retain current customer relationships and establish a long-term financial relationship to produce recurring revenue streams.
For instance, it's important for installers that they have the ability to create recurring revenue streams through things such as remote monitoring and diagnostics. Dealers must capitalize on the service-based business model in order to maintain and grow their businesses well into the future.
What I just discussed is from a maintenance perspective, but there are also informational services, such as providing weather, news, local restaurant menus, among others, that these installers can offer.
Starkey: The knowledge and labor requirements for advanced systems create a long-term viability for the custom-installation company. Developing scale to serve a critical mass of clients over time reliably remains a challenge for most. Improvement in business systems and methods will help many of these companies. Being able to replicate system sales Jump to Page 8 and becoming more efficient in installing focused systems can be the ultimate success for those that will lead the industry for the next ten years.
While national retailers are becoming more install-conscious, the level of systems they are able to provide are still in the bottom quarter of capabilities that can be offered. As the market moves up from the bottom, custom installers will be in a good position to capitalize on differentiated sales. Most of the custom installers already have relationships with the early adopters at the high end of the chain.
Lepper: The big guys will, of course, do installation. How custom it is will depend on their tolerance for pain. I think they'll use independent contractors, a lot like the cable companies do. They don't want or need the HR hassles of employing thousands of field installers. They'll offer a range of services that fit their product sales aims, not the other way around. I think we'll see the large retailers employing many of today's smaller, more-entry-level independents as contractors.
At the higher end of the business, electronic systems contractors will continue to provide highly personalized design-build services that offer quality, performance, and experiences that the mass market companies can't. The classic market pyramid doesn't go away. What businesses are doing in the segments is what changes.
Witten: We see many of our installers broadening their scope to include lighting and automation. With the advent of streaming media and all kinds of media storage, we still see a brighter future for distributed audio. You still need great “bones” in the house to get good quality sound and video distributed around the house and great speakers to fully appreciate it.
We have narrowed our focus as organization to stay true to our core competencies so that we can continue to offer products and services that solve unique problems and applications for installers. We believe that this will help the independent A/V installer stay unique in the business by offering creative solutions and solving problems for their customers that no one else can.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.