Revisioning Custom Retailing: Part 5: Disruptive Innovation Will Transform Home Integration
Multi-Purpose Platforms and Killer Apps
In the ancient history of AV (a little over a decade ago), if you had an electronic task you wanted performed, you left your home, traveled to a local AV store, and bought a product specific to your need: a TV to watch; a stereo to listen to. Sources? “Glad you asked, sir. We have AM-FM tuners, turntables, cassette decks,” and other analog product categories. A chassis for every task meant lots of attachment sales. Those were the glory days of retail.
The digital revolution has changed the formula by simplifying every waveform (at every frequency) into a string of 1s and 0s. In the process, it reduced the number of electronic tasks from many to just three: transforming analog signals to digital data, managing the data, and presenting it to humans—preferably on a single, hand-held wireless chassis. This process has reduced all those wonderful analog add-ons to inexpensive applications (or “apps” for short, which, you may have heard, are sold on the Web by an obscure, vertically integrated little company named Apple). Thus was born the smartphone—the universal specific that, with hundreds of thousands of apps, can do (almost) anything a human might need, electronically speaking.
This digital hub approach has revolutionized the world of consumer electronics, and has done much to damage traditional custom retailing. Apple stores today generate, on average, $6,050 of sales per square-foot per year (versus $823 for Best Buy.) In addition, the Apple stores serve as a catalyst for countless Internet purchases. What’s your yield?
Steve Jobs’ vision is a long way from the 19-inch racks populated with the premium gear we know and love. But how can we sell a proprietary $10K control panel system with another $5K of custom programming, for example, when a $500 tablet and a handful of free or inexpensive apps can get pretty close, functionally speaking? This is the sort of question for which we must find compelling answers.