ProSource, the industry’s largest buying group for A/V specialty dealers and custom integrators, has an aggressive growth plan. President/CEO Dave Workman believes the ranks of the $4.5 billion group can grow from the current 540 businesses to upward of 800 members within the next five years.
ProSource expects to kick off the plan with the addition of 40-50 new members in 2017, after bringing in 58 new custom-install members and $100 million in total new-member volume last year.
Revenue for the CI tier was up 10 percent last year while retail members enjoyed low-to mid-single digit gains, thanks to the resurgence of audio and up-market demand for oversized, fully-featured 4K Ultra HD TVs, Workman noted. The increases, and targeted selling, has given the group “a seat at the table with manufacturers,” he said.
Also on tap for 2017: a digital marketing initiative that integrates vendors’ digital assets and promotional roadmaps into a cohesive marketing product that’s designed specifically for the independent specialty dealer, the group said.
The program was developed by an in-house ad agency shared with sister group AVB/BrandSource, and is currently undergoing a 120-day proof-of-concept beta test by 15 dealers and a predetermined focus group of manufacturers under the aegis of ProSource’s newly formed marketing committee.
“We’re fine-tuning everything for a rollout this fall,” Workman told TWICE.
The group is also implementing a recurring revenue model — considered essential in monetizing the smart-home category — and announced a partnership with Salesforce.com to “identify and quantify non-group brand volume and work with each dealer to better support group partners,” ProSource said.
Also driving revenue is a continued focus on the audio category, where the group holds a “commanding share.” Despite a decline in audio business on the custom install side, ProSource is buoyed by partnerships with the industry’s top audio manufacturers, and is moving beyond Sonos by selling advanced multi-room audio solutions through Bose, DTS, HEOS and MusicCast.
Workman said high-quality audio sales can offset declining average selling prices (ASPs) in other CE categories, and to that end ProSource’s merchants have rounded-out the group’s audio assortment with the addition of even higher-end, “pure luxury segment” brands.
He said ProSource dealers have an eager audience for their headphones, turntables and wireless multi-room and Bluetooth audio products in millennials, “who love audio and are growing into the sweet spot” as their incomes and wealth rises.
Other ProSource initiatives include the creation of a membership committee to identify opportunities to improve member services, engagement and health, and to assist in the recruitment of other high-level dealers.