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Capitol’s Kussard On Changes In A/V

NEW YORK — Retailers and custom
installers have to change to find their
way in this new economy.

In addition, residential systems contractors
have to go out and sell customers
rather than just take orders, and 3D
TV sell-through rates are at the same
pace as top-of-the-line HDTVs of the
recent past.

These were just some of the observations
of Jeff Kussard, strategic development
director of Capitol Sales, the CE
distributor that serves retail, custom
installation, residential system and premium
incentive markets.

Kussard, on a media tour to discuss
Capitol adding Sherwood America’s
Sherwood and Newcastle brand audio/
video receivers (AVRs) — and its revamped

— talked about the changing specialty
A/V market.

When asked what discussions between
suppliers and retailers might be like at
CEDIA Expo in Atlanta next month,
Kussard said, “Many of the discussions
will be about the economy rebounding.
Have we reached a bottom and begun
to climb? Or have we reached a bottom
and are just sitting?”

Addressing the residential systems
market, Kussard said, “I hope they realize
that they can’t look for the return
of the housing market as a savior. They
have to redefine their businesses.” He
said Capitol has stressed the No New
Wires initiative for that market over
the past two years, which “is a change
for them but creates new opportunities,
a new paradigm for the market.”

He noted, “Many in the residential
systems market used new-home construction
as a cash cow in the past decade.
Their business plan was more
‘lead management,’ making connections
with architects, real estate developers,
etc. to get in on projects. What
they have to do now is go back to selling
services and packages to previous
customers and making cold calls. They
have to go out and begin selling again.”

As for the retail market Kussard
said Capitol sees growth “with well-established e-tailers. and
others are doing well. It is challenging
for traditional brick-and-mortar A/V

He noted that the “shift in consumer
behavior” about buying online started
when “the big boxes took market share
and made the in-store demo irrelevant
because they did them badly.”

However, Kussard noted that while
national chains have made many consumers
believe CE is a commodity
“there is a market for the enthusiast,
which is why I’m still optimistic”
about specialty A/V, but they have to
change their approach. “As Jeff Huber, past president of CEDIA, once said,
specialists and custom installers need
to become ‘technology concierges’ for
their customers.”

And Kussard disagreed with the
spirit of last week’s iSuppli forecast
that shipments of Internet-enabled
TVs will be the major selling point in
selling TVs this year as compared with

“Three months ago I would have
agreed with that, but now … there are
only a few 3D [Blu-ray] titles out there.
But [Capitol’s] sell-through sales rates
for 3D versus top-of-the-line TVs in
the past year and a half is the same. It
looks like what consumers are saying is
that if they want the best HDTV they
can buy, they are buying for the future,
and that is a 3D TV.”