Beyond the Clouds
Home Market Drives
The National Association of Home Builders regularly reported increased new home starts and more remodeling activity in 2013, but in early November NAHB’s Eye on Housing blog reported that “home sales are suffering due to lower affordability, increases in interest rates from early fall, and general uncertainty.”
That said, dealers generally reported increased home construction and remodeling in their markets, and a resulting increase in major appliance sales. “The appliance business is up (industry-wide) a little over 8 percent year-to-date on shipments,” Lawrence in late October. “About five to six percent of that is builder business, and that says that the appliance business we compete in is up two to three percent.”
In Chicago, Mike Abt, co-president of Abt Electronics reported, “The builders are happy and are building expensive houses again, which is our customer.” And
for the first time Abt saw hedge funds buying and fixing up houses, mostly foreclosed properties, for rental. All that drove a double-digit increase in appliance sales, yet Abt’s appliance repair business remained strong.
Nationwide in 2013 watched Lowes and Home Depot promote the same brands, the same SKUs and many times the same offers. Jeff Knock, Nationwide’s senior vice president of appliances believes that “has actually helped our members’ businesses stand out even more.”
Benefitting from Risk Distribution
Ever since the recession hit, with its video sales doldrums and pricing madness, dealers have scrambled for new sources of profit. In 2013, audio – especially headphones, sound bars and wireless speakers — continue to help retailers regain profit, .
Industry darling Sonos now faces new wireless audio competition from Bose, Lenbrook, Bluesound and others. The headphone market is softening, forcing dealers and distributors to develop new strategies. “We focused on higher ASP products within our high velocity categories such as headphones and televisions to ensure we did not join the race to the bottom,” said Josh Finkelstein, senior group manager – marketing for Ingram Micro Consumer Electronics.
In 2013, Bluetooth/Airplay-enabled wireless speakers became a market factor. “Our dealers are having greater success as they add wireless headphones, speakers and auxiliary inputs through Bluetooth receivers to their product mix,” said Bill Stewart, fonder of Petra Industries.
Custom integration and other services increased in importance as a profit center in 2013, something that will continue next year. “We want to be in our customers’ homes and change their lifestyle,” said Electronics Expo Owner Leon Temiz.
More dealers are adding security services, including Bjorn’s in San Antonio. Bjorn Dybdahl is setting up a company to do it. “We never before had anything with the potential of monthly recurring revenue,” he said.
Dealers are emphasizing whole house convenience and whole house control, said Richard Glikes, group president Azione Unlimited “Control and lighting have been really strong,” he said. “LED lighting is a particular point of interest.”
Increased competition from Comcast’s Xfinity, ADT and Verizon Fios aggressively promoting how consumers can monitor and control their homes via smartphones and tablets will bring attention to the categories and to independent dealers, he said. “People are more cognizant of what they can do remotely. I think that’s a benefit.”