Orlando, Fla. - Home Entertainment Source (HES) is looking to new unilateral pricing policies by video manufacturers, and group support of dealer-friendly vendors, to help return profitability to the TV category.
Addressing members and manufacturers during the buying group's spring Summit meeting here at the Marriott World Center, executive VP Jim Ristow said vendors are taking action in response to "a sick industry."
Pricing policy rather than products was the focus at International CES last month, he said, and vendors appear committed to putting profits ahead of market share and production.
[Editor's Note: Senior executives at the Nationwide Marketing Group, a rival independent dealer organization, have separately confirmed that Samsung will be instituting a uniform pricing policy for TV. Nationwide is holding its own spring meeting concurrently at the nearby Gaylord Palms Resort.]
The new policies, plus mounting pressure to enact a national Internet sales tax collection statute, bode well for the pendulum to swing back to a more level playing field for brick-and-mortar retailers, Ristow noted.
To further press their advantage, Ristow called on all 550 members of the $3.6 billion specialty CE and custom-install group to throw their purchasing power behind the most supportive manufacturers, and to extend that focus down to even the SKU level.
Ristow also urged members to consider the margin and profit opportunities for whole-system projects, compared with sales of individual products, and showcased the group's first two Connected Source showrooms. The turnkey merchandising and design program was developed to help members tap into the burgeoning mainstream control and integration market, and features five in-store stations for demonstrating streaming content; home theater, gaming and 3D TV; distributed audio; headphones; and whole home control.
Other big profit opportunities for dealers include LED lighting, component audio and commercial automation, Ristow said.
Also addressing the rank and file was HES president David Pidgeon, CEO of Dallas-based Starpower, who warned that one-third of the industry's dealer base will dissipate due to changes in the industry and consumer habits, and independents must evolve with the times to succeed.
Pidgeon later told TWICE that unilateral pricing, should the policies stick, will help move showroom discussions past TV-model price points and free up sales staff to attach other products and services.
Bob Lawrence, CEO of parent group BrandSource, also spoke to the assemblage, telling attendees that HES now represents the buying organization's largest division. BrandSource's own spring meeting kicks off tonight, and buying expos for all members will run through Wednesday.
- Additional reporting by Steve Smith
Check TWICE.com and the March 12 print edition of TWICE for further coverage.