ProSource had much to celebrate at this month’s annual Spring Meeting, which returned to the La Cantera Resort in San Antonio.
Riding the wave of economic recovery and home building, the $5 billion specialty A/V and CI buying group cited gains in each of its core categories, with its overall TV business up 14 percent last year (and ahead 34 percent in premium models of $1,400 and above); audio up 23 percent in electronic components and 12 percent in home speakers; and its overall custom install revenue rising 13 percent.
The latter, CEO David Workman told TWICE, was limited only by the availability of labor, and could have easily increased by 25 to 30 percent were his CI members fully staffed.
Also driving the gains was the addition of 16 new vendors and 44 new members in 2017, Workman reported, while the return to robustness lifted a dozen members to “Power” status — reflecting annual sales of $4 million or more — for a total of 67 within that elite club.
As ProSource chairman Murray Huppin of Huppin’s said in an address to the troops, “Many of us have enjoyed great success, some of it unprecedented,” thanks to the improving economy; close vendor partnerships; a smart, hard-working team led by Workman; and a multichannel business model that spans premium integration, best-in-class brick-and-mortar and online sales.
Huppin also credited members’ ability to adapt to rapidly changing times, noting that their mere presence at the meeting meant “You have brought something to the table, you’ve made adjustments, you’ve taken risks that have panned out, you’ve invested in your people and you’ve stayed in touch with the consumer and the market for our products.
“New technologies usher in products never imagined,” he continued, “while simultaneously obsoleting categories that were once the bedrock of our industry. Business models evolve, and sometimes change radically. We can all think of core vendors and leading consumer electronics retailers who were not nimble — and are now a faint memory.”
Huppin, who delivered a heartfelt tribute to TWICE’s late content director John Laposky, also cited new challenges in the form of stock market volatility, import tariffs and the possibility of a trade war with China. Quoting Winston Churchill, he reminded all that “The problems of victory are more agreeable than those of defeat, but they are no less difficult.”
Nevertheless, the future appears bright for the group, which has already added 12 new members in the first quarter of the year, representing $49 million in new revenue and raising the membership roster to more than 550 specialty retailers and custom integrators, while projection call for another 40-50 additions by year’s end.
Stock gyrations and global trade aside, Workman pointed to rising home values, employment and consumer sentiment in his annual State of The Business address, which sets the foundation for another year of strong growth.
To capitalize on the macro environment, he outlined a four-point plan that begins with greater member engagement, to be reflected in more town hall dinners, 11 tech and business summits, a new 10-member working groups, an increase in member visits by district managers and a continuation of member business reviews.
On the product front, ProSource is further brightening its outlook by making a major push into lighting and shading. The group has already created a core collection of vendors including Coastal Source, ColorBeam, QMotion, Screen Innovations and Vantage, and plans to add additional partners, establish a lighting committee, share best practices and create seven regional roadshows for the category going forward, Workman said.
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Another key initiative is on the managed services side, where ProSource is collaborating with Parasol and OneVision Resources to provide members with customized solutions for customer tech support. As Workman explained, remote monitoring and management represents “a reinvention of the service model, and is so important to the future of this type of dealer” — and their earnings growth —as the cost of tech products continues to decline. Citing data from Parasol, he noted that 55 to 80 percent of truck rolls can be eliminated with such automated systems, which, along with the concomitant revenue stream, goes straight to the bottom line.
Workman is also collaborating with affiliate group AVB on the digital marketing front in order to better crack the millennial market. “The industry is very good at fishing at the baby boomer pond,” he said, “but millennials are now the big spenders and we need to learn how to communicate with them as they enter their best spending years. That’s the challenge for the industry.”
But challenges aside, Workman acknowledged that times are good, and that the members are energized. “It was one of our best shows, if not the best,” he said.
ProSource will return to La Cantera again next year.