ProSource, the $5.5 billion A/V and custom integration buying group, presented a gangbuster cluster of initiatives at last weekend’s Summit, the biannual conclave of affiliated retailer organizations under the AVB corporate umbrella.
Chief among ProSource's strategic tacks is a laser focus on lighting. According to president/CEO Dave Workman, the five-year-old tech group formed a 12-member lighting and shade committee with business development VP Andy Orozco. Their task: to get member dealers and integrators trained and fluent in LED downlighting, task and landscape lighting, and other profitable, high-growth sub-genres.
Some two dozen ProSource members have already flipped the switch on the category, Workman said, and are deriving upward of 25 percent of their revenue, and a significant chunk of their earnings, from the business. Lighting also ties in nicely with shades, a core ProSource competence; it can’t readily be commoditized; and the group’s home-control skill set gives it a leg up over traditional lighting retailers and a special place in lighting manufacturers’ hearts.
Orozco and the committee have already forged partnerships with Coastal Source, Colorbeam, DMF, WAC and other vendors, and are steering members toward the American Lighting Association for live and online training and accreditation.
ProSource is also leveraging the financial learnings of the Bravas Group of custom integrators led by executive directors Paul Starkey and Steve Firszt, to help make its members’ businesses more profitable.
Another boon to the bottom line is an alignment with MACHA (Making American Healthcare Affordable), a healthcare collective that provides a tailored, low-cost health insurance plan for ProSource's members, employees and management team with significant savings. Workman plans to eventually spread the wealth to sister group BrandSource and smaller vendors.
Conversely, ProSource is beginning to leverage the digital marketing prowess and showroom design know-how of AVB Marketing, a wholly owned AVB company. The former includes customized websites, original video content, and directed digital advertising and social marketing, all at a 40 percent discount to going rates, while the latter includes a vendor-supported showroom makeover program and a free remodel contest.
“Dealers need to rethink how they sell the products,” Workman noted. “The customer must experience it; they must see, hear and feel what we’re selling. It’s not enough for us to tell them about it.”
The collaboration with AVB — underscored by the Summit’s theme of “Better Together” — will continue this summer, when Workman plans to introduce a CE program for BrandSource furniture and appliance dealers. He described the initiative as “a highly directed packaged plan” with a good/better/best merchandising scheme that includes A/V and can be distributed through AVB’s Expert Warehouse logistics program.
Workman said the time is right for BrandSource dealers to reconsider CE, as Sony has targeted the independent channel and helped bring margins back to TV, while a new generation of smart appliance products “are dragging us into technology.”
Recapping the past year, he said ProSource’s audio business was up nearly 11 percent; its premium TV volume was down 2.6 percent; and CI products and accessories were ahead 17 percent amid an otherwise challenging Q4. Member churn was down to 3 percent, from as high as 15 percent in the past, and member ranks are expected to hit 600 in 2019.
Looking ahead, Workman hopes tariffs won’t exceed their current 10 percent rate and will continue to be a non-event for the CI industry. Based on the solid macroeconomy and positive member feedback, “We’re looking forward to a good year,” he said.
ProSource will next convene for its annual Spring Meeting, to be held April 29-May 3 at the LaCantera Resort and Spa in San Antonio.