By Lisa Johnston
New products on display at the American International Toy Fair, held in N
KnowledgeFest 2003 opened earlier this month at the National Convention Center here with record-setting attendance. The Mobile Enhancement Retailers Association (MERA), the show's sponsoring organization, said it had to move to the facility at the last minute due to an unexpected 66 percent increase in supplier exhibitors.
MERA executive director Rick Mathies said attendance was up over 200 percent, exceeding 1,200 showgoers, with exhibitors numbering 83.
The 12-volt community was advised to expand business and cross promote. In addition, retailers were educated on the direction of autosound, which is expected to change dramatically over the next 10 years. Installation training classes were also packed to capacity.
A key goal for MERA in 2003 is to become for the auto performance parts dealer what it already is to the 12-volt specialist, said Mathies, noting, that while the Specialty Equipment Market Association (SEMA) represents performance parts suppliers, "there's nothing for retailers on that side."
"There's no MECP (Mobile Electronics Certification Program) for performance accessories. They've started certifying for sunroofs but that's it. We're working with CEA on including certification [for performance parts] in MECP," he said.
Knowledgefest seminars on performance parts ranked highest in popularity with several intermediate-level courses offered this year for the first time.
OEM integration was another hot topic. In a presentation, Rob Putnam, president of Soundgate, outlined key directions from Detroit that will impact the aftermarket. "Car companies are increasingly tying in radios to critical car systems such as climate control. As a result, car stereo in the future will de-emphasize head units sales as we know them today. Detroit is already merging HVAC and radio controls in luxury cars, a trend which should trickle down to key Gen-X and -Y car models in the coming years," said Putnam. "The electronic climate controls use the same screen as the radio, so if you pull out the radio, you lose the screen," he explained. Honda is already designing this into the Accord, he said, adding, "We're heading in the way of the aftermarket being an amp and speaker business."
Following the seminar, Alpine marketing VP Stephen Witt responded, "If we project five to seven years out, there's no question, we will be selling fewer head units. Product planning roadmaps are already changing." But he said head units will take different form factors in the future, such as a black box, which generates a user interface on a separate screen. That user interface, however, will be brandable, said Witt. The market will also focus more on sound processing as well as amps and speakers, he said.
Putnam's second point on OEM integration, which is positive for the aftermarket, is that the MOST (Media Oriented Systems Transport) network is gaining a foothold as the preferred standard in new cars. He said the aftermarket is currently working on products that will be able to plug into the network. Putnam said he expects to see prototypes of MOST —compatible products at the next International CES.
Steve Cook, CEA staff director for Mobile Electronics and MECP, commented that 10 percent to 12 percent of new vehicles, mainly luxury cars, currently use the MOST network, with Witt adding that this will impact more common vehicles in three to five years.
CEA is already working on an application standard so that aftermarket products can plug easily into the MOST network. A working group to develop this application standard held its first meeting on Feb. 4 and Witt and Cook were encouraged by the progress towards the standard. Technology companies, such as Dolby, are cooperating and sharing information, they said. At Knowledgefest, Dolby automotive marketing director Patrick Artiaga noted, "We're putting our cards on the table and offering what we think would be a solution for MOST. We've been doing this standards process with digital TV with what was the Grand Alliance and now we're doing it with MOST." The next step, said Witt, is for the OE companies to share information with CEA.
New technology was also a key topic at Knowledgefest with seminars on HD Radio and surround sound.
Artiaga lead a seminar called "Marketing and Selling Surround Sound," which offered market research statistics to show the potential of surround sound. Artiaga pointed to various studies, which found:
Most people spend more than 30 minutes a day in their car,
52 percent of car buyers said they would pay more for surround sound,
47 percent of consumers are interested in mobile video and 17 percent are interested in MP3 in the car,
Car companies including Audi, BMW, Cadillac, Lexus, Mercedes Benz, Toyota, Volkswagen and Volvo are rapidly adding center-channel speakers to new vehicles.
Artiaga offered several suggestions for promoting surround sound including cross-promoting with local movie theaters. He said retailers should take advantage of the upcoming movie "2 Fast, 2 Furious" due for release on June 2, by contacting local theaters. "Many theaters offer pre-arranged packages with radio that will promote your store, allow you to park a demo vehicle in the front of the theater, encourage radio listeners to win free tickets to the movie, and give you movie posters for the store," said Artiaga.
"There are one or two movies a year like this which work. You will open up a new audience for your store. They'll upgrade to get that connection with the film," Artiaga explained.
Another suggestion is to encourage customers to bring their own CDs into the store for demonstrating head units. "This works especially well with Pro Logic II. If they bring in Faith Hill, they are used to hearing it in their car and then they hear it on a PL II system, it will bug them when they play it back in their car again," Artiaga said.
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.