Summer 2017 Marketing Group Digest
ELECTRONIC SYSTEMS INTEGRATION
Gary Ponto, CPMR
AV market is undergoing a shift
The AV and security industries are doing very well so far this year. Installation companies are very busy and looking to hire technicians to handle their current work demands. This is very encouraging as many companies, which experienced reduced workloads during the recession a few years ago, were laying off people. The forecast for both of these industries projects an increase in sales of about 6 percent over 2016.
The business, however, has shifted from bid work to negotiated work for the most part. Integrators are moving their existing customers into new technology, upgraded software and hardware solutions for both AV and security application improvements. It is more profitable for companies to go back to their existing customer base for upgrades rather than compete in an open bid spec. This is also driving brand loyalty in the channels because, in most cases, they don’t want to switch a customer from what was first sold to them. This is a nice change from the lack of brand loyalty we have witnessed in the past few years.
We are also seeing IT companies entering the AV and security space, specifically in tenant improvement projects and new construction where structured cabling and network improvements are a part of the overall scope of the project. This is mostly datacom, paging and sound masking; however, we are seeing datacom companies getting into AV as more products are becoming IP addressable. Integrators and electrical contractors are looking to grow by taking on as much as they can of the low-voltage projects. They are subcontracting less of the projects to other companies if they can manage these systems internally.
The move in the industry from electrical contractors doing more of the low-voltage work is driving a change in the distribution channel as well. Distributors are looking for more AV product lines to fill the requests from their contractors who are branching out into the AV space. In turn, the distributors who have primarily an electrical contractor, security or datacom customer base, are driving AV into alternative channels. As reps, we need to get a handle on these new channels of customers/integrators to capture the potential growth.
There is definitely a change coming in the AV market. National accounts and newcomers from the electrical side of the market are challenging the traditional AV integrators whom reps have worked with for years. Distribution is going to play a larger role in our businesses going forward, which is very different for this industry. However, national accounts, datacom accounts and security integrators that are looking to enter this market, or are already into AV projects, are buying through a national distributor, so we need to support this new channel as well.
MATERIALS, ASSEMBLY, PRODUCTION & SUPPLY
Impact of technology on business and day-to-day life
Do you remember the “Greatest Show on Earth?” No? Good, because now it is only a memory. Here in Tampa, Fla., we are only a few miles from the home of Barnum & Bailey Circus, and nostalgia reigns as we remember the excitement of the circus. The availability of entertainment at our fingertips, movies as close as the “select” button on the remote, and the desire for instant gratification make change inevitable. We see it all around us.
Do you remember when travel agents used to book our flights and hotel rooms? Do you remember standing in line waiting for a cab, or trying to hail one from the street corner? Do you remember when a company’s inventories played a large part in determining its worth? Now fast forward to today. We probably use our cell phones to book a flight or hotel room, or to schedule Uber, and the ride is waiting for us.
Now, about that inventory … Airbnb is the world’s largest provider of accommodations, and the company doesn’t own any real estate. Uber is the world’s largest car service but owns no cars. Both have no inventories to manage, no supply chain to manage and very little overhead to maintain. They don’t have to negotiate with any unions and don’t have too many employees who require full benefits.
Let’s look back with a little more nostalgia. Do you remember the “Sears Roebuck Catalog?” First you had to fill out the order form and mail it in. Maybe a week later you received your order. Now fast forward to Amazon where you place your order online, and in many cases, your order is ready the same day.
Do you remember the typewriter? Does anybody still have one in his or her office? How about the original 3M thermal copy machine and the innovative Xerox? Do you remember your first fax machine? Today you can do all of these functions using a desktop, laptop or your cellphone.
Think about the position technology holds in our world today. The “Frightful Five” — Apple, Amazon, Alphabet, Facebook and Microsoft are worth a combined $2.87 trillion. Who will be the next technology giant?
Technology continues to shape the way we do business, and indeed, the very way we live our day-to-day lives. What does that mean to us as reps? It means that we have to stay on top of our game and utilize every tool available or we will become another “Greatest Show on Earth,” a casualty falling behind as progress passes us by.