HES: Embracing Connectivity Key To Growth

Connectivity is now where HDTV was in 2001 and independent retailers "need to embrace it ... and take advantage of these new opportunities."   HES executive VP Jim Ristow addresses his members at the Sunday morning General Session.
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Connectivity is now where HDTV was in 2001 and independent retailers "need to embrace it ... and take advantage of these new opportunities."

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HES executive VP Jim Ristow addresses his members at the Sunday morning General Session.


That is the view of Jim Ristow, executive VP of Home Entertainment Source (HES), the AV specialty division of the BrandSource, which he expressed on Sunday morning at the group's Summit being held through Tuesday at the Marriott World Center Resort, here.

Independent retailers need to "diversify" into new product categories and embrace change, such as the "250 million Trojan horses" -- tablet PCs and smartphones -- that they can use to connect their customers to new or more robust connected home systems. HES members must be "integrators that sell AV" and that products that are "commodities are not the solution."

Ristow outlined an economic environment where the stock market has "doubled in value in the past two years," the feared double-dip recession "probably won't happen," and that other economic indicators show that 2011 will be one of "slow, steady and building" progress.

But Ristow said that HDTV can no longer be relied on as the only driver of independent retailers' businesses.

"During the 2010 CES the only thing discussed was 3DTV, and sales weren't robust ... the big-box retailers didn't know how to sell it and there wasn't enough content," Ristow said.

At CES this January all the talk and product news was about "connectivity, wireless capabilities and content."

Ristow confirmed statistics from the Consumer Electronics Association (CEA) what his members now know only too well -- HDTV is now a mature category and the sales forecast "looks scary."

He showed that HDTV sales peaked in 2008 and that average selling prices (ASPs) have been down in double digits since then, meaning, in effect, "we have to sell 25 percent more units to get the same dollars we got the previous year."

Ristow noted that independents must take "a new approach" and that profitability can't just be on "each piece of hardware" which is getting smaller, but the "total profit on each project."

Click here to read the full story at TWICE.com.

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