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4K King Of The Holiday For BrandSource

BrandSource is betting big on 4K for the holidays. Dave Workman, president/CEO of ProSource, the buying group’s CE and CI specialty wing, said in a convention presentation that 4K UHD in general, and LG Electronics’ OLED displays in particular, represent the keys to winning the fourth quarter.

4K already comprises better than 50 percent of ProSource’s TV mix, Workman said, and that figure is expected to rise to 70 percent by the end of the year, as the category enters a pricing “sweet spot” that will make it affordable to more consumers while still providing profits to dealers.

More specifically, the specialty group plans to support a major marketing, advertising and promotional push by LG behind its OLED display technology, as the manufacturer leverages its current production monopoly. Leading the charge is the price-protected 55-inch 1080p model, which can help drive showroom traffic with its stunning picture quality and $1,999 price point, he said.

ProSource is also partnering with Samsung, which has the No. 1 market share in TV; has kept industry pricing stable through its UPP policies; has the best inventory in the country; and, along with LG, is providing a unique 90-day product-return window to BrandSource dealers via the group’s in-house Expert Warehouse distribution program.

In response to a member’s query regarding Vizio and its recent CI-channel outreach, Workman said the group has taken “a very firm position” against the brand, which was born of the discount channel and had contributed to the category’s margin erosion.

“It would be like letting the fox in the hen house,” he said. “Its margin structure is too low, and it would erode our relationships with our premium partners,” namely LG, Samsung and Sony.

“We can’t be everything to everybody,” Workman advised.

Overall, the group’s foot traffic, a consistent challenge, has been “spotty” and online business is doing well but is largely driven by opportunistic buys. Bright spots include the super-premium tier, and the group’s CI dealers, who are up 15 to 20 percent overall.

To help maintain margins, Workman urged dealers to deemphasize soundbars, where the growth is in sub-$199 models, and to upgrade themselves and their customers to multi-room audio, which can provide healthy profits, recurring sales and a future-proof purchase for end users.