Richard Glikes, president of custom integration buying group Azione Unlimited, may not have seen it all, but he certainly has seen most.
With a career that began in the 1970s at iconic regional retailers like Wall-to-Wall Sound and Bryn Mawr Stereo, and included 15 years as the executive director of Home Technology Specialists of America (HTSA), he has witnessed an extraordinary number of trends come and go (and come back again — hey, vinyl!).
Currently Glikes runs Azione, a buying and resource-sharing group he founded, that’s comprised of more than 200 of the top custom installation businesses in the U.S. and 50 of the industry’s leading manufacturers.
TWICE sister resource Residential Systems caught up with Glikes right after CEDIA Expo and a few weeks before Azione’s fall conference, dubbed “The Donnée in Denver,” to get his views on the challenges facing the industry now, and how to overcome them in the future.
Resi: What trends do you see emerging post-CEDIA and as you head into your own event?
Glikes: I saw professionalism at the show. People acting more business-like and dressing the part.
The business seems to be maturing and, at the same time, the products are evolving. There is both definite motion and stability in the whirlwind we call integration. One example is lighting. Our integrators have been doing light control for years and a small amount of lighting fixtures. Now they are being asked, again and again, to supply fixtures. Television is another example of stability and motion. The category has always been a staple, but now not only are the sizes going up, but we have 8K TVs and very little 4K content.
Our fall conference, The Donnée in Denver, is focused on ideas and interaction. Our Inspiring Insights — a series of “Ted Talks”-style presentations — promises to be thought-provoking, with nine guest speakers talking for 15 minutes each about topics from perfect light to Bitcoin. Surrounding the talks are 11 different face-to-face dealer/vendor one-on-ones and a myriad of small group meetings with dealers networking on best business practices. We’ve got a great meeting on our hands.
Resi: What do your members see as their greatest challenges right now?
Glikes: The number one problem is not having enough qualified people to do the work. There is a tremendous shortage of labor, particularly installers. However, there is a new profit center waiting for us to fully embrace, and that would be lighting fixtures. The only issue is education and confidence. At this point, there is trepidation because dealers are at the start of the learning curve. But soon it will become old hat and we’ll be enjoying additional profits while satisfying our clients.
Resi: What solutions do you recommend to them?
Glikes: With the unemployment rate so low, there isn’t a short-term solution. We do have a long-term plan to ameliorate the problem, but that doesn’t help us today.
Resi: How has the custom integration market changed over the past five years, and how have your members adapted?
Glikes: Five years ago dealers thought of themselves as purveyors of home theater. When theaters slowed down, the bright integrators became proficient at selling and installing control systems. That has since evolved into the number-one profit center: shading. The other dramatic change has been the profitability of television. Thanks to the leadership at Sony, TVs are now very lucrative, whereas in the past, they were a necessary evil.
Sony did a number of things that made the category more profitable, including hiring reps; establishing a MAP program; developing a product strategy that had models for each channel of distribution; and incentivizing dealers with rebates, and salespeople with spiffs.
Resi: Polishing up your crystal ball, where do you see the industry in five years, and what role will Azione Unlimited play in it?
Glikes: We recommend getting really good at physical things. By that I mean things that companies such as Amazon, Google and the like can’t or don’t want to do — things that require labor, such as installing speakers, shades and now, lighting fixtures. These can’t be taken away from us. Our model must adapt to be service companies first and sales companies second.