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Effects Of The Economic Crisis

TWICE:How is the global financial crisis hitting home with your company? What, if any, effects are you feeling? If you don’t find your company has been affected, what have you been doing to avoid the fallout?

Trevor Hansen, Volutone: vWe have seen a downturn in business but not enough to change course. Some dealers of ours have been doing better than others.We continue to support our dealer base with training, business advice and the best products at the lowest prices.

Jeff Davis, D&H Distributing: The overall consumer mood is changing. There is fear and there is doubt in the ability of the marketplace to sustain itself through this downturn period.

At D&H, we can say confidently that we haven’t felt the tremor of the economy on our business. Although of course, if the economic pattern continues to decline, all aspects of business (small, medium and big-box retail) will feel an impact.

D&H continues to keep a tight rein on expenses and costs. We will also keep an eye out as to how this affects our partners and vendors going forward, to see how we might react to help support them. A crisis can bring out the weakest links in a business, but it also gives that business an urgent reason to correct those vulnerabilities quickly. We’re watching to see what shakes out.

David Kaplan, Digital Delivery Group: Slippage in housing starts, housing sales and the availability of home-equity financing is having unavoidable affects on the custom integration industry. DDG members have been lucky in the sense that we’ve been on a significant growth curve all year but it seems we are not invulnerable. October is off to a slower start than we are used to. We are doing everything we can to improve our ground game. We are stepping up our email marketing and training efforts to make certain we add value. We are launching a national direct-mail vehicle in mid-November. We just added some strategically important lines such as Cool Components and Soundcast to help us continue growth in tough economic times. We developed and just launched our Full Circle Product Protection program designed by and for custom integrators.

Brian Wiser, Ingram Micro: The negative financial impact on the U.S. economy, and that of the world, is continuing to intensify and is impacting growth opportunities in all industries. The ripple effect will continue, making it even more challenging for the IT industry. That being said, we are continuing our laser focus on our customers, partners and shareowners. Our logistics, growth-focused services, and credit and financing programs are critical growth components, especially in a soft market.

RJ Hirshkind, ADI: Our sales are near where we forecasted them to be. We did plan ahead for a slowdown based on the residential housing market, but now we are faced with more challenges from the recent market activities. We understand that homeowners may be hesitant to spend money on high-end luxury items right now with the uncertainty of the market.

John Sullivan, ADI: Some of our small to midsized custom installers are expressing challenges including the inability to get credit lines for payroll with banks they’ve been dealing with for years. There has also been some financing slow down for some customers as they work with banks to recapitalize their business.

We manage our day-to-day business operations very effectively, and provide support to customers to ensure they are able to successfully complete their jobs. We remain in constant communication with our vendors and customers to make doing business with ADI as easy as possible.

TWICE:What have you been hearing from your customers regarding the crisis? How have they been faring?

David Weisman, The Advantage Group: Some of our dealers are having a difficult time lining up new jobs and some are experiencing cancellations. It is a challenging environment for businesses and our dealers are feeling it like everyone else. There’s an awful lot of focus on the financial news and election right now and consumers are holding off on larger unnecessary purchases. Add the housing slowdown into the mix and it is just tough right now.

Trevor Hansen, Volutone: We talk to many of them on a daily basis and they seem cautiously optimistic. Our dealer base operates mostly on a referral basis and have been keeping busy.

Jeff Davis, D&H Distributing: D&H customers are definitely concerned. So far, however, smaller retailers and dealers have remained strong and steady.

Usually, when the economy is in a downturn, small dealers become more resilient. They can be agile and change with the market.

David Kaplan, Digital Delivery Group: Dealers are looking for new and creative ways to reach-out to previous clients and prospects with unique offerings and services. They tell us that there are simply fewer jobs to be had and they’ve got to fight harder to get them. Value equations are changing and dealers are hungry to learn about new technologies and opportunities such as building control systems utilizing the Z-Wave ecosystem.

Brian Wiser, Ingram Micro: One bright spot is the fact that there are no signs of a return to “IT doesn’t matter” or “good-enough computing” models.

Enthusiasm for new software tools and solutions remains strong amongst end-users. There is evidence that some IT solutions are identified as the solution to current economic challenges, rather than the problem (in contrast to 2001).

Consumer spending in the next two to three quarters is still crucial, with potential negative spillover into other sectors of the global economy.

John Sullivan, ADI: Customers focused in the commercial space are faring well and those in the residential space have had some challenges due to a slowdown in new construction and credit issues. Going forward, I think a lot of dealers are going to begin feeling the effects of the recent financial market activities.

We are seeing integrators become interested in new areas to diversify their business, and offer more solutions to homeowners. For example, traditional security dealers are becoming interested in customer electronics, and CE dealers are looking at security products they could offer. ADI offers a series of training opportunities to help customers diversify their business and learn to install new solutions. We also work closely with more than 200 vendors in our ADI Expo training series, which allows our customers to interact with manufacturers one-on-one and attend seminars on the latest developments in the industry.

Joel Blank, executive VP, ArchBrook Laguna: This time is unrivalled in recent history and as a result, it requires distribution partners to truly understand their customers and manufacturers businesses to deliver the efficiencies necessary to maintain and grow.