What Business Are You In?
As more of our core products become widely available commodities, C-tailers must rethink and refocus in the face of shrinking margins and well-funded, well-known competition.
What follows is a think piece on this topic from a longtime manufacturer's rep.
By Doug Henderson
The audio/video business has increasingly become a contracting custom installation business. Many dealers and individual salespeople have adopted an approach to sales that seldom or never involves a demonstration, or even much discussion about performance quality. The emphasis instead is on functionality, cosmetics, budget and the control interfaces.
Often, the client relationship is based on a referral or a relationship with a builder, architect or another tradesperson. The customer's desire simply is to have sound and TVs in certain rooms—and often the various other aspects of large home integration like lighting, shade and HVAC control—coupled with comprehensible control over products that have grown far too complex for the average person to use.
The specific products involved are secondary concerns. Performance expectations are largely undefined, if not deliberately downplayed. In some cases, the actual customer remains in the background and third parties, like the interior decorator, make the decisions.
In this day and age, then, is there any point to presenting audio products that aim for higher musical performance than background sound, or video that goes beyond the TV presentation that even the largest plasma provides? Is it worth the effort, expenditure and space to demonstrate better A/V products to a clientele that is so detached from the experiences they can provide?
I'll answer these rhetorical questions with another, borrowing a line from The Cider House Rules: What business are you in?
The Commoditization of Control
After a few golden years, we are seeing the rapid decline of the plasma TV as a profitable sale. The flat panel is steadily deflating as a big-ticket luxury purchase. A few short years ago, only high-end dealers and installers sold plasma TVs; now they are bulk-stacked at Costco and Sam's Club, and soon they'll be piled up at Wal-Mart. Early this fall, I observed a 50-inch HD panel at Costco for $2,999. A few weekends later it was down to $2,699. By Christmas, I'm guessing it will be below two grand.