In an address before the Home Theater Specialists of America (HTSA), executive director Richard Glikes implored members to adopt new business models amid a rapidly changing A/V landscape or risk going dark like many fallen CE retailing stars.
“Sunshine or sunset?” he asked dealers, who gathered at the Sheraton Wild Horse Pass resort here earlier this month for the buying group's ninth annual member meeting. “Sunshine or sunset?”
Specifically, Glikes urged HTSA members to move away from traditional retail roles and evolve into complete, one-stop design center that offer furniture, lighting and control, licensed electricians, and CAD capabilities, or which have first-priority affiliations with contractors and outside vendors that do. “Not everyone needs a showroom to do big business,” he said.
“There have been huge changes in the industry” in the 10 years since HTSA was founded, Glikes noted. “Many retailers and vendors are gone. Sony is in Costco and in Wal-Mart, and Best Buy is about to become a $40 billion company. If there's going to be a place for HTSA, we're going to have to morph and adapt. Dealers can't still do the same thing they did 10 years ago and think they'll be successful now.”
Glikes emphasized that in today's homogeneous marketplace, where “brands go where the business is because factories are driven by volume,” HTSA and individual dealers have become the brand. To support brand building on the group level, Glikes will continue to offer members a host of vendor-supported marketing tools, including the new consumer Internet site, www.myhtsa.com, and a member-only Intranet site for forecasting and purchase reports; training meetings and conferences; HTSA's quarterly magazine; and millions in marketing funds that will pay for six direct mail pieces, three inserts, several generic TV spots and ads on Google. In addition, the use of search engine optimization has made myhtsa.com a Top 10 hit on MSN.com for searches on the term “home theater,” Glikes said.
HTSA director David Wexler, a co-principal with wife Evie of Chicago-area The Little Guys, concurred. “The biggest change in the industry is that five years ago brands drove people to our store. Today, the manufacturers' brands are everywhere, so the brand is now us. It's 'The Little Guys' name that's most important.”
The Wexler's largely promote their business through radio, employing both ads and an hour-long call-in show hosted by the husband and wife team where consumers can seek technical advice.
Elsewhere, the $500 million group welcomed its 55th and 56th members, Aurant and Definitive Audio, to their first HTSA meeting, as well as new vendors Escient, Kaleidescape, Middle Atlantic and RPG Diffusor Systems. Core video suppliers for HTSA are Hitachi, Fujitsu, LG, Mitsubishi, Runco and Sharp.
Looking ahead, Glikes believes that 2006 can be a big year for HTSA, once new flat-panel production comes on line. “If the supply situation ameliorates, which it will shortly, we could have 15 percent to 20 percent growth.”
In the meantime, though, plasma supplies remains tight, particularly from Panasonic and Pioneer, despite another round of planned price cuts by the former. “It doesn't compute,” Glikes said. “You drop prices to get share, but what market share can you garner if you don't have product?”
To ensure sufficient inventory for HTSA dealers, Glikes urged members to forecast early and to support the group's core vendors. “You have to be important to your suppliers,” he said. Still, he anticipates “a race, a marathon,” from the end of August through January as retailers try to stay ahead of price moves in flat panel. On the bright side, the price declines will allow another new segment of consumers to enter the market, he said. “It will be huge.”
HTSA will hold its next member meeting March 11-14, 2007, in Savannah, Ga.