Another Transition

As we reach the halfway mark on the calendar, many retailers, distributors and suppliers are looking to fall merchandising plans and holiday sales.

Three longtime A/V specialty chains that made major contributions to the industry — Flanner’s Home Entertainment, Ken Crane’s and MyerEmco — have closed and won’t be around to explain, sell, install and deliver 2010’s products.

Combined they represent a staggering 236 years in U.S. retailing: Flanner’s opened in 1891, Ken Crane’s had a 62-year run, and MyerEmco served the Washington D.C. market for the past 55 years.

The CE industry is always in constant transition, and consumers have been trained to buy based on price. But what are today’s reasons? The departed retailers all must have made a bad decision or two along the way. (Who hasn’t?) But they couldn’t overcome the worst economy since the 1930s, as well as a fundamental change in the CE business where the margin for error is smaller than ever.

What does this say about the CE industry? Technology is not going away. Just the opposite … it will thrive since consumers love the industry’s products.

National retailers will thrive, which is why our June 7 issue focused on Walmart and how the largest retailer in the world is planning to compete in CE. Walmart will keep its core customers and maybe take a few more with its improvements.

But no matter how CE evolves technologically, it always gets more complicated for the average consumer to understand. For instance, Best Buy has identified a plethora of “average consumer” groups to serve.

With an industry that will offer more products that have to connect with each other, consumers need someone to guide them up on a vast learning curve where profits usually follow for everyone.

Social networking is great and manufacturers should communicate with consumers directly. But retailers, whether online or in stores, are still a critical link from vendors to consumers to explain all the technologies and brands available, and put the right product at the right price in their hands.

Of course, regardless of the usual gloom and doom after such news, regional and independent retailers aren’t going away. The expansion of hhgregg has been chronicled here, along with Sixth Avenue Electronics and P.C. Richard & Son. Days after the news about Ken Crane’s, Ultimate Electronics said it plans to expand into California, which follows its moves into the Northeast. And there are countless more CE retailers out there that are expanding or considering a move.

What these entrepreneurs need from the manufacturers selling their products are long-term support and partnerships. If vendors don’t, they do so at their own peril and at the peril of the entire industry.