HES Stands Firm On Flat Panel

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We at Home Entertainment Source are committed to flat-panel TV.

Our best-of-class members sell best-of-class goods and provide complete home integration services, and we have not stuck our heads in the sand over this category. Certainly, we have felt and will continue to feel the pinch of what is happening in the market, and there’s no question that it effects how we do business in video. The difference is that we saw this development coming years ago and built an infrastructure for our largest and smallest members to not only to survive under the present market conditions but to prosper.

With that said:

• We will not abandon flat panel, nor lower its importance within our members’ businesses.

Most things that are important to a company’s success do not come easy. We simply need to be smarter than our competitors. We are on the verge of a period when tons of TVs will need to be converted, and we believe that for the next few years flat-panel displays will continue to anchor the system sale.

• We have not given up on flat panel. Rather, we will focus on the areas of the flat-panel industry that involve expert advice, knowledge and installation.

We want to sell audio, integrate IT and lighting, and connect the entire home for our customers. Video is a major part of our customers’ needs, and we plan to be the ones to fulfill them.

• We will use flat panel to sell everything else.

Everything, that is, that makes the client’s entire sale profitable. Our goal is to maximize every customer’s sales potential, build relationships with our clients, and get repeat and referral business.

• We fill a very important niche for the vendors.

We have forged very deep relationships with some of the best vendors in the world. They look at our best-of-class dealers as a solution to sell not only their best-of-class display products but their entire solution as well. We are as committed to them as they are to us.

• We fill a very important niche for the consumer.

We are the only national alternative to the box stores for specialty A/V. For all those consumers who do not believe a warehouse club is a proper place to shop for complex consumer electronics (and industry data shows that there are many of them out there), we will be that national alternative. And flat-panel TV remains an important part of consumers’ overall A/V needs.

• This is not just talk.

We are sharing merchandising strategies with our members on how to work around the boxes and clubs and still remain profitable. These strategies include selling solutions that feature high-speed and LED-backlit LCDs, best-of-class plasma displays, multi- and single-zone audio/home theater, Blu-ray high-definition disc players, lighting, integration, extended service plans, quality connections, iPod solutions, servers, furniture and more.

Essentially, whatever it is our customers and clients need, we want to provide and install the solution. We don’t want to give up any of the sale.

We even named our March 2008 Annual HES Summit “Mission Possible,” since it is possible to survive and prosper. We have a laundry list of the best consultants in the business addressing our members to help them keep their businesses successful. Flat panel, and the ability to compete in it, is a very important part of that success.

The video industry will undergo the same consolidation experienced by the computer industry. Vendors and resellers will leave TV, just as they did PCs, and those that are left standing will be the survivors that actually prosper.

HES saw this change coming years ago, and we knew that if we didn’t take drastic action our members would eventually be forced to exit the category. We feel that our warehouse delivery model and aggressive stance on flat panel overall, along with our forecasting and strategic planning with our vendors, will be the tools that keep our largest and smallest members in the business profitably.

Rather than avoid flat panel and become industry causalities, we will take market share and become the national A/V specialists that are left standing.

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