In the Event: HTSA's Bob Hana on the Nationwide Deal, Industry Optimism and More
NASHVILLE- At the HTSA spring conference here on Wednesday, we had a chance to sit down with HTSA Managing Director Bob Hana. The interview came the day after the buying group announced a new alliance with Nationwide Marketing Group. In the interview we discussed the Nationwide deal, dealers reactions to it, and the overwhelming sense of optimism throughout the group.
SS: To start off with the Nationwide alliance, the first question is why now, and can you elaborate on the reason HTSA went through with the deal?
BH: We took a look at where we believed the market's headed and trying to anticipate that kind of environment, where people are going to live in an incredibly connected world. It is not science fiction that your car is going to drive itself, and at some point order a pizza and have it delivered as your garage door opens automatically and your furnace is turned on at the right temperature. It's not science fiction. And as it gets more and more robust, we honestly believe that we have to strengthen the specialty channels.
There has to be a home technology specialist in small markets and in big markets to be able to serve the need of these customers who are going to have a phenomenal experience but are going to require resources and people to be able to do that with. And believe that the smaller member has to have the same access to those resources as the larger ones. So whether you live in a small town you're still going to be connected and you're still going to need someone to manage those networks and do thing for you as you're going to if you live in downtown Manhattan.
The ability and the vision of this alliance is to enable members to have that, whether they're small or medium or large. To have resources that they may never have been able to do. HTSA has been doing that for a number of years, but we also realize it's going to require another level of scale to really be able to provide more and more of those services, more and more just-in-time inventories, all of the things that we're going to need to have, to have very successful and profitable members to be able to deliver that experience to the customers.
On the Nationwide side, they also realize they need to do the same thing for their Speciality Electronics group, and be able to refocus that organization, and that I think is driven by their rebranding of their organization on that side, as Home Technology Specialists of Nationwide. Because at the end of the day, our members are the home technology specialists. That if you were going to google it- if you were looking for a plumber, you need to go to "plumber," or to "carpenter." Where do you go when your network isn't working or your smartphone stopped doing this or your garage stopped talking to your app- you need to go to your home technology specialist. And that's where we are.
SS: Are there any financial terms of the deal that you can talk about? Is it you paying them? Them paying you?
BH: This is an alliance. We're still independent companies like we were. It's an opportunity to get very smart people together with other smart people. Its number one in [their] space, from the buying group world and the marketing resources on that side, and we're number one in our space. So it's two of the best of the best in the industry, getting together to figure out how we can get better together.
There's no financial aspect.
SS: The benefits that are being touted to HTSA members: You mentioned the access to video, you mentioned the better credit terms, you mentioned the access to the eXchange. What are some of the other ones? Are those the big ones?
BH: You know, we don't know what we don't know. The opportunity to have those conversations about what are the needs we're going to have. We now have combined resources that we can deliver, on those needs and as they evolve. The immediate needs are the ones you mentioned, there are some very short-term opportunities there which are substantial. Yesterday, 30 minutes after the announcement, delivered to every one of our members was a personalized video, explaining the experience of what they can deliver to the marketplace. Immediately that was forwarded to their websites. Those kinds of resources can be forwarded to the designer. Say they just completed a conversation with a client and they want to be left with something, they have access to communicate those things.
The other side of this is training. Everybody in this industry needs to get better and better at it. It takes sometimes eight years to ramp up a new employee to get really good at what our members do, and that's insanely long. If we're going to be the leaders in this marketplace and we're going to be able to provide those services to our clients we have to get much more efficient in training people in things. So imagine the day when your installer is sitting there and maybe it's been two months since he installed that particular brand and can't remember it. So he goes to his phone and opens that particular video and says "oh, yea, that's how I do that."
And that's the benefit that our vendor partners receive- it's the ability to now work together, collaborate and have resources and tools and delivery methods that I think will streamline the entire process.
SS: So what's been the reaction at the conference to the news, from what you've heard?
BH: I think our membership loves it. And that was the number one goal because we are a member-focused, member-owned, member-driven organization. Every ounce of not only our energy but our resources are plowed back to our members. There is nothing taken off. When a vendor is kind enough to give us support monies, every dollar of that money goes to helping our members get stronger. And they know that, and they appreciate that, and i think quite frankly our vendor community appreciates the fact they do know their money is being spent exactly how they would like to spend it, and support it, and hopefully we're spending it on intelligent, high-return-on-investment activities, and that's why our membership really appreciates what's going on at HTSA and now really appreciates this vision that we have for this alliance as well.
SS: Aside from the Nationwide announcement, what have you heard people talking about at this conference? What's been the main topics of discussion from what you've heard?
BH: Well, business is strong, and it's getting better. We see the resurgence of high performance audio and video coming back. The average price points of theaters are increasing and everybody's pleased about that. Everybody is pleased that people are appreciating the performance products that they sell. Our networking business is phenomenal as one can expect. So there's a general feeling of enthusiasm and optimism and growth. And they're experiencing it, so what's we were hoping for, and now we are actually experiencing this.
The vendor community is very excited about our mentor program. Because as we've committed to them that we're going to continue to increase their benefits for being part of HTSA. Having a process in which we can now identify how exactly who of our members will mentor others, and also be partnered with them to help them in many aspects of it. It just adds another level of credibility to the process.
Members will listen to me only so much, and they'll listen to the vendors only so much, but they will definitely listen to the testimonial and the support of another member and their experiences. And that's been very powerful.
SS: What are you seeing in the second half of this year, just in terms of industry trends that we've not necessarily seen yet?
BH: More of the same, I think. I don't see anything substantially changing. As I mentioned, the single biggest challenge that we have is dealing with our growth and finding quality people. We put that resource in at our member meeting to have access to a company that will help identify good people and train them and things like that. Just being able to scale and deal with this. Dealing with that level of success and growth is going to be part of this.