The country’s leading retail buying groups are gathering once again in Las Vegas for CES, to check out emerging new categories for 2020, as well as networking with existing vendors, and possible new ones.
Retail group executives say the connected home, smart appliances, 8K TVs, and the rollout of 5G will be hot commodities at CES, along with a couple of surprises, no doubt. They believe their independent retailers and installers, with their expertise, should sell these categories profitably as they roll out.
Nationwide created its own Connected Home Division and began a partnership with AT&T to offer smart home services last year. Tom Hickman, president and chief member advocate, says, “This will be an inflection year for [the connected home] and for our dealers.” But he cautioned there is no shortage of vendors offering connected products. He says, “You can go to a custom integrator for a great experience but there isn’t a great mass experience at retail.”
Hickman says Nationwide’s Connected Home and AT&T effort will change the retail experience. “It’s a huge opportunity. We offer solutions for independent retailers that put it all together. That’s what Nationwide is focused on delivering in 2020.” And he adds, “We have to tell [consumers] stories, why they need it and how connected products can improve their lives, those are the kind of things that will drive the business.”
AVB/BrandSource also sees opportunities in the connected home, as well as the premium 4K and emerging 8K TV markets with its appliance and electronics expertise. Jim Ristow, CEO of AVB/BrandSource, remarks, “In ultra large TVs, 70- to 75-inch and larger, the market is growing at an unbelievable pace and it is profitable. Over 90% of them are sold at brick-and-mortar locations or true click-and-brick,” with dealers delivering and installing these big boxes. “It’s in the wheelhouse of our members.”
He adds that many BrandSource members signed up for a special Samsung turnkey solution which enables independents that are re-entering the premium TV categories to bundle them with “simple, elegant audio solutions. I think this whole turnkey solution has been a bigger missing link than anyone thought.”
In the smart appliance business, BrandSource members’ appliance expertise is “our pedigree and history,” but it is new technology. Ristow adds that ProSource, the affiliated specialty electronics and custom integration group headed by CEO and President Dave Workman, is working with their retailers “to help our appliance-centric members on this. What we’ve learned is there isn’t just one silver bullet to get truly engaged in smart appliances. It has to be a multi-pronged approach, just like we discussed with ultra large TVs — a turnkey strategy.”
Workman said TV inventories go through ProSource’s system “in one way or another.” In connected home “there are some exceptions,” such as do-it-yourself products. But ProSource’s premium TVs are “Samsung, Sony and LG and we actually make money on TVs. If you focus on the profitable part of the business, that’s why Jim and his team are talking about revenue growth to get [some BrandSource dealers] back into TVs.”
Workman notes connected home products are, “a little different” for BrandSource dealers versus ProSource members. “For BrandSource you have to come up with more of a turnkey solution” when installing smart appliances that are attached to the internet. That is in comparison to a typical ProSource member because its members do “more full-service installations.”
Everyone will be watching how 5G develops this year, but question marks are still there for these groups. Hickman says 5G, “could be a game-changer” and is hopeful it can drive the connected home, but is unsure. Workman notes that in the short term for 2020, the question is, “will 5G produce any benefits for our type of dealers that we can monetize,” since his group and others do not rely on video games or smartphones for growth.
Jerry Satoren, executive director of the NATM Buying Group, says that 5G “will change our lives and the process starts now,” but wonders what will happen in 2020. As far as the connected home category NATM, an organization of a dozen of the nation’s largest local independent electronics and appliance retailers, members have done well with Google and Nest-related do-it-yourself items.
For more extensive and upscale installations, “Our members have tried smart home displays in packaged settings” with some members “making the investment to drive that business,” Satoren says. “What’s gratifying is that members share expertise on this and other new technologies to come up with best practices.”