Retail AV Hit Hard by U.S. Economic Woes
Nov
5
Written by:
Jeremy Glowacki
11/5/2008 7:09 AM
There’s always been a Catch 22 for the custom installation channel when
it comes to mass-market retail competition. On one hand, most retail
outlets -- particularly the big-box stores like Best Buy and Circuit
City -- often under-serve customers looking to make big purchases like
flat-panel TVs, computers, and digital cameras, because of their lack
of product training or simple apathy. Even the “installation
departments” of these retailers typically provide nothing more than a
hang-and-bang attitude with no customer service to speak of.
On
the other hand, retail does provide the custom channel a decent
recruiting tool for customers who aspire for more quality and better
service. Wealthy individuals might walk into a big box store only to
reach the conclusion that there must be something better out there.
That’s when a word-of-mouth recommendation leads them to a specialty
retailer or custom installation firm that can properly educate them
about what they really need in their home, work with their builder and
interior designer, and train them on how to use their system once it’s
installed and integrated.
I bring all of this up after learning from the Boston Globe
today that Tweeter is finally done for good, a year after filing for
bankruptcy protection with about $165 million in debt. The Canton,
Massachusetts, electronics chain is reportedly preparing to close in
the next four to six weeks, according to store employees. This bad news
comes on the heels of a similarly ominous story that Circuit City has closed 155 of its stores across the country.
Admittedly,
retailers like Tweeter and Circuit City have been easy targets for
veteran CI guys who take pride in their own work and customer service
and find these competitors to be sub par. However, it’s sad to see the
slow death of AV retail continue to drag on as consumer spending dries
up in the wake of a collapsing U.S. economy. Even with a more affluent
demographic as its target, it is hard to imagine that the CI channel
won’t feel the repercussions of this news. Yes, hungry consumers always
have the Internet for research and even direct purchases, but the
retail sales floor and demo showrooms are where the excitement really
happens. If every retail outlet dried up, I’m afraid of what that means
for the CI channel and consumer electronics as a whole.
Case in
point: my Uncle Steve is a typical Midwestern, middle class kind of guy
who has always loved his toys. Over the years he never skimped on cars,
boats, or any other hobby de jour. He has always purchased the best
bass fishing boat, the best trap shooting guns, the best (a biggest)
American-made SUVs, and has always has been an early adopter of
consumers electronics. Somehow, however, Blu-ray basically passed him
by… until last weekend when I received a breathless phone call from him
after seeing one in action. He finally got a demo and he could not
believe how much better Blu-ray was from the HD cable picture on his
50-inch Sony HDTV at home. He just wanted to share his amazement with
me and ask me what I thought. It surprised me a bit that it had taken
his so long to see what I agreed was an amazing piece of video
technology, so I asked him where he finally got a taste. Wal-mart was
his answer. Yes, with the demise of AV retail, Wal-mart might be all
that we have left. God help us all.