As a custom installation professional, do you ever get the feeling that youre being used? For instance, isnt it your company that manufacturers call when they need to beta test a new product before releasing it to the market? Arent you also the guy that a new company always looks to before sticking its toe into the broader consumer electronics channel? And arent you the one who gets left in the dust when that same company determines that you cant provide a high enough volume of distribution for its products to succeed?
I dont think you would be alone in feeling the way you do, and yet it is the nature of who you are and what you do for a living that creates this recurring scenario. And, I would guess, you wouldnt want it any other way. For it is in your nature to be the guy who gets to play with products based on bleeding edge technologies, impressing your clients with your insider knowledge of what the next hot trend in home electronics will be. And you must realize by now that the honeymoon always ends as soon its time for your suitor to move on to greener pastures.
I bring up this topic because of this months announcement that Exceptional Innovation has signed a new distribution pact with Best Buys commercial installation arm, Best Buy for Business. At a glance, this news may have appeared ominous for the custom channel. It was as if EIs CEO Seale Moorer and his team, like so many before them, had spent big marketing dollars to court the CI market and to establish credibility with high-end consumers, only to grow impatient with the slow rate of return on investment and move full-steam ahead toward the mass-market retail channel. Further examination, however, reveals this to be an inaccurate assumption. As Moorer made clear in a widely distributed letter to his companys CI dealers and EIs VP of marketing Mike Seamons clarified to me late last month, EI remains firmly grounded in the high-margin CI channel, while also offering ConnectedLife.Home, which is a self-described lite version of EIs Life|ware, through Best Buy stores.
For those unfamiliar with EIs Life|ware line of products, the original system is designed to serve as a simple, but multifaceted, home automation and digital media control system layered over Microsofts Windows XP Media Center. It expands the capabilities of a Media Center by giving consumers one-touch control of their homes climate, lighting, security, audio, and entertainment systems. Now, with Media Center soon to become a standard feature on all of Microsofts new Vista operating system releases at the end of January, EI is anticipating a huge opportunity in the market. By partnering with Best Buy, they can provide a $15,000 packaged home automation package designed for a broader consumer base, without undercutting their loyal and well-trained CI partners.
A cynic might still question EIs motives. However, having spent enough time with the companys executives over the past six months, I can attest to EIs long-range plan. In fact, CI dealers should feel nothing but relieved that a company of EIs caliber can provide 50-point margins to them, while simultaneously opening up the channel to the much broader middle-market through highly visible Best Buy retail stores.
The CI channel will never grow any bigger than it is without having a jump start from strong manufacturing partners who can play on both sides of the fence. CEDIA doesnt have the marketing capital to spend on promoting its members, so most of them are left with only referrals, the phone book, and their websites to generate customer leads. With EIs plan, ConnectedLife.Home customers who like what they see in the packaged system at Best Buy but desire a little more than it can offer, will be referred to an EI custom installer in their area as part of an upgrade program. It is EIs hope that its dealers will see the potential of this initiative and the benefit of introducing home automation and digital media systems to a much larger and broader market.
