By Lisa Johnston
New products on display at the American International Toy Fair, held in N
One of the highlights of last month's first annual Home Entertainment Source (HES) Summit and Buy Fair (see TWICE, March 22, p. 1), was a vendor panel that attempted to tackle some of the issues and challenges facing the buying group's A/V specialty dealers and the suppliers that serve them.
Moderated by HES general manager Jim Ristow, the panel was comprised of Steve White, group account manager, Bose; Steve Caldero, VP/sales, Yamaha; and Bill Johannesen, director of accounts director for Sharp.
What follows is a synopsis of the discussion.
On resuscitating audio sales …
Steve Caldero, Yamaha: People are into music. In two weeks, Apple sold 100,000 mini iPods and Norah Jones sold 2.5 million albums. The customer also has more discretionary income than ever and the lowest interest rates in a lifetime. So we have to get the customer excited about what we're doing, and give them an experience and an emotional reason to come in.
We have to get back to demos. Compare the sound of an HTiB against separates. Why should they pay $10,000 on a plasma display and walk out with a home-theater-in-a-box that costs less than the sales tax on the TV?
But beyond separates, we also need to embrace all new technologies. Industry people look down their noses at MP3, but that's what consumers are using. Why fight that trend? Show them products that will integrate with MP3s, and demo them at better compressions.
Bill Johannesen, Sharp: The industry has to change to the way the consumer wants to buy, not the way we want to sell.
Steve White, Bose: I agree. We have to base our products on what consumers want — a "market in" approach — but also on technological innovations. Facing the drivers backwards on the Bose 901 loudspeaker was a technological innovation that consumers didn't initially ask for until they heard them.
On the rash of new off-brand video products from Asian factories …
Johannesen: There were 78 TV manufacturers at CES but only a few primary manufacturers made LCD panels. Most had computer monitors that were used as TVs.
You have to ask yourselves, "Do they support your business? What happens to your customer down the road?" Retailers shouldn't jump willy-nilly to these other vendors because of price.
The best thing you can do [in response to competitors' lower-priced, off-brand models] is to give consumers a demo and wow them with better products.
Caldero: There have always been cheaper products on the market — remember rack systems? Twenty-five points is a huge margin for the PC guys. But we give our customers value, we teach them how to use our products, and we will be there tomorrow.
I think we need to get back to basics. You have to give your customers a controlled demo, give them some value and a reason to shop at your stores.
On the new PC-based home networking technologies …
Caldero: We have to embrace new technologies rather than fight them. MP3 is the most popular device in the history of music, and at 160kbs in a headphone it doesn't sound so bad. Remember, music to kids was watching MTV on television. The sound was not that important. So our approach should be, "We can give you portability — and more!" Show them servers that can distribute their music throughout the house. Show them that you have a whole array of products that can enhance their experience.
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