This spread originally appeared in the January 2016 issue of WiFi HiFi Magazine. This is a Web-exclusive extended version of that column.
We Asked...
If you could change one thing about this industry, what would it be?
Note: after an overwhelming response, we followed up by requesting that those weighing in think beyond the prevalent issues relating to pricing, including the need to increase margins, and eliminate the dreaded "race to the bottom." These are, of course, the first desired change on any industry member's list. That said, here's an extended version of a selection of some of the best answers we received beyond that.
Andrew Tepperman, President, Tepperman's Chatham, ON
"...Distribution. If we want a healthy independent network of retailers I would set up two distribution buckets: one for the nationals and one for the independents, with different features and benefits. Leverage the independents who have more professional and specialized sales people. Keep the commodity items mostly in the national big boxes."
Andrew Tepperman
Eric Lindenberg, Owner, Red Ball Radio, Belleville, ON
"The total disposable nature of many of the products we are selling. We live in an age where conservation of resources is held with high regard, yet we tell our customers to throw the old one out, no matter what it originally cost or what the fault may be."
Paul Frecker, Owner Paul Frecker Audio, Conception Bay South, NL
"...[Change] the focus of marketing from specification-driven to solution-oriented. It would be great if more consumers were directed towards approaches and products which would deliver optimal satisfaction, rather than having them swim in a sea of technical numbers which they only loosely understand and which are frequently in conflict with best choices for a given situation."
Benjamin DelGrosso, General Manager/Buyer, Certified Radio, Edmonton, AB
"Training has been lacking for quite a few years. Most manufacturers have cut costs on product training. They are not educating accounts on new technologies, how to install them properly, and when to sell them. I feel a lot of brands are not spending the quality time to make sure their brand message is fully delivered, which is also part of the training process."
Myles Kesten, President/Owner/Founder, RiverdaleMac, BeachMac, BloorWest Apple Specialist, Toronto, ON
"The growing tendency of manufacturers to reward big box with new product launches to the disadvantage of independent retailers. Over the past few years, we've seen product lines that we've sold consistently disappear from our shelves as the manufacturers hedge their bets with national retailers."
Grant Daoust, partner, Vice President, Sales, Trends Electronics Inc., Burnaby, BC
"We [should] trade in U.S. dollars. The constant change in currency rates has really hurt a lot of retailers, integrators, and distributors."
Grant Daoust
Kevin Sawler, Owner, Glubes AVU, Dartmouth, NS
"Remove destructive distributors! You all know who you are. The problem is, you just don't care. These distributors have entered the market with the sole intention of saturating product distribution, destroying gross profit margins, and all but eliminating the natural demand cycles that should exist to perpetuate the introduction of new and exciting products that retailers want to display, and customers want to own!"
Kevin Sawler
Linda Hudson President/Owner Kerrisdale Cameras, Vancouver, BC
"Particularly frustrating is waiting many months to get cash back from IR (instant rebate) and sell-through programs, and often having to wait months until they place an order to take advantage of the credits, while the vendors effectively hold onto the dealer's cash. This causes unfair cash-flow problems for many smaller independents. These programs have been the industry secret for long enough, as many were afraid to discuss. Many dealers aren't in a position to speak up or have to rely on their buying groups to do so, if at all."
Linda Hudson
Steve Thorne, Owner Hi Fi Fo Fum, Toronto, ON
"Salespeople who are less confusing is probably key right now. With all the streaming and network gear available, I find it's paramount to be able to explain all aspects to a customer from the how to set it up, including loading apps and ripping CDs to a NAS, from the type of software used for ripping and getting the data right. Explaining this in a clear and effective way, which the end user can understand, is necessary in order for this business to grow beyond offering Apple's Airport Express."
Mike Chorney, President, La Scala, Vancouver, BC
"Standardization and regulation. Standardization would ensure things just naturally work together as intended. In the computer world, they have managed to all drink the USB Kool-Aid, combined with Bonjour services with most accessories just working by plugging them in - well, most of the time. Regulations would keep the standardization on track but also ensure that integrators have the basic knowledge to warrant being deemed professionals. Our industry has many great and knowledgeable integrators that have invested time, money and education to ensure their systems deploy well and are built to work well into the future. Too often, our industry is transactional, and not with the client foremost in mind. The shiny black boxes on a quote seem to take precedence, rather than the skill set of the company doing the work. I often tell potential clients that a pantry full of ingredients does not guarantee you are a master chef. Imagine an environment where you needed to be licensed based on your skill set. That seems to have worked well for electricians and plumbers."
Mike Chorney
Marilyn Sanford, Owner, LincEdge, Vancouver, BC
"Scaling our businesses is very tricky. If we can figure that out, we can build profitable long-term businesses, and have a lot more fun doing so. The core problem is the unpredictability of job completions, and the high cost of retaining labour. Unfortunately, in the residential custom industry, we have very little control over the timing of our jobs. I've seen high six-figure jobs unexpectedly last for years beyond planned completion dates. We can ‘peak manage, ensuring tight processes that minimize the unpredictable. But if we can't get on site, the project waits. If we sell more (jobs), that often feeds the problem. It doesn't solve it. During peaks, we often can't access enough trained labour to meet deadlines. Thus we're forced to onboard contractors, or pay overtime or, if we're lucky, find a technician looking for work. Our technicians get tired, new guys don't know the processes and are not familiar with our solutions, so costs rise. When we are in valleys, waiting for projects to complete, we continue to pay wages, because we don't want to risk losing our talent, especially to competitors. So variable costs go up during the peaks, and overheads rise in the valleys. Some dealers have actually talked about sharing labour. Perhaps this is innovative enough to make sense."
Marilyn Sanford
Matt D. Scott, President, Omega Audio, London, ON
"Increase training and certification options. Although many people in our industry are quite well trained, we continue to lose ground to the IT industry where certifications are worth their weight in gold. If we increase the quality and stature of our certification programs, our industry has the opportunity to become a stronger force."
Matt Scott
Martin Szpiro, President & CEO, Jam Industries, Baie D'Urfe, QC
"Move CES to a nice Caribbean island, or maybe Hawaii. I have already spent a year of my life at trade shows in Las Vegas. What happens in Las Vegas...should happen somewhere else."
Martin Szpiro
Roy Derrick King, President, Lens & Shutter, Vancouver, BC
"Margins. Improving the standard of our industry's independent retail landscape will require a base margin increase. It's easy to complain about wanting more money, but the hard truth is that sustaining a bricks and mortar store, which directly supports the regional economy and our industry, requires significant and regular cash flow. The resources required to maintain quality staffing, effective merchandising and stock levels along with strong marketing, in a highly competitive marketplace, would all be enhanced by a modest and fair margin increase from the key vendors."
Gillian Stein, CEO, Henry's, Toronto, ON
"I would love to see the customer at the centre of this industry. The most successful industries are focused on innovation that exceeds the expectations of their customers and provides them with tangible benefits. Our customers are looking for intuitive products that deliver great results, not just specs. As manufacturers and retailers, we need to innovate our approach to clearly communicate these benefits, and make it incredibly simple for the customer to get what they really want."
Gillian Stein
Fred Breitner, President, Great Metropolitan Sound, Toronto, ON
"I would refresh the idea of high fidelity in the minds of consumers, reversing the trend of commoditizing music reproduction. We've got a lot of work to do to communicate the idea that fidelity matters, that it enriches the enjoyment of music."
Richard Petit, Owner, Kébecson, Montreal, QC
"We are in show business, we need a good stage. Stores need more corporate looks, better design, less mix of all brands, nice displays featuring products by brands, not mixed together. We need to follow examples of other retailers: cars showrooms, Apple stores, Nespresso stores, clothiers, and duty free shops (yes, they are well-designed) to ameliorate the customer experience in our stores. If you visit CE stores, they show too many wires, accessories, and TV brackets. When you shop for a car, they don't take you into the parts department! We need more creativity...We are there to change the consumers' priority (to electronics). Our competition is not other electronics dealers: it's travel, vacations, cars, boats, etc...Other businesses sell $20,000 watches, which tell the same time as a $39 watch, and we all have clocks on our cell phones."
Richard Petit (photo courtesy of Michel Cloutier)
Bruce Schepers, Senior Director, Sales - Home Electronics, LG Electronics Canada, Toronto, ON
"Make far more 4K content widely available, unlike what is out there now. More of this content would definitely expand the horizon for UHD technology and drive consumer interest in technologies that best reproduce this content (like OLED)."
Austin Mayo, Marketing Manager, Atlas AVU, Victoria, BC
"Manufacturers refraining from direct marketing to customers to which we have sold products. Some manufacturers collect e-mail addresses during product registration/activation. Sometimes, the customer is then barraged by e-mail offers from the manufacturer with clickable links to make direct purchases. Most customers want to see products before buying. The manufacturer is leveraging our retail store and staff investments to make a direct sale to the customer for which we receive no further compensation."
Keith McCumber, SoundsGood Auto, Burnaby, BC
"Get more installer training; offer incentives for car stereo companies to grow (training, media knowledge, SEO info, etc.); manufacturers giving us a better back end than the Internet gang so that the brick-and-mortar stores survive the global Internet purchase phenomenon; have companies like AvidWORX, Del Ellis, Kingpin University, Mobile Solutions, Sonus promote their products and services to the masses so that we all have the opportunity to grow; instill a sense of pride to join things like MERA KnowledgeFest, CES, PNW, and SBN because it helps us to be more feasible in the public eye; encourage everyone to visit other shops to offer insight on what works for you and to learn what makes them thrive."
Kevin Main, Vice President, Sales & Marketing, Torus Power, Toronto, ON
"Succession planning. Most of the industry leaders are getting close to retiring, and we need strong leaders to replace them. We have spent the past 20 years resisting transformative change within our industry, and today, we remain an old boy's club that has missed an opportunity to engage the next generation of strategic leaders, both men and women. I routinely see businesses that will ultimately close as the founders wind down their careers without the necessary human resources in place to take the business into the future. I was recently at an event with many of our industry's foremost North American business leaders when the guest speaker asked for a show of hands: "How many people in the room are grandfathers?" Almost everyone in the room had his hand up! It sure would be better for us all if we could make this a younger, more vibrant industry that equally attracts women and men to participate."
Kevin Main
Mike Brawley, President, Premium Imports Limited, Blue Mountains, ON
"We need industry investment from all suppliers and retailers alike (inclusive of online). Investment in merchandising (so an independent or a buying group can differentiate from a big box, multi-category retailer). Training from the vendors so that the salesperson on the floor can provide the value-added service of education to a consumer who will therefore be willing to drop his money there rather then seeking out a "better price" of inconsequential measurement. And last, an industry platform trade show [that can] bring the industry together, which can further lead to creation of the first two items mentioned. It can create a community for positive exchange of ideas, technology introductions, seminars and merchandising solutions. The Power Group/AVU vendor fair in Montreal was the closest thing we have seen to this in many years. Of course CES is still relevant to Canadians but fewer of us are attending because it is not our show, it is America's show. And as much as Canadian participation still goes on to a small degree, we need a Canadian event. If you look at other industries, Canada has its own industry gatherings in many other categories: car shows, boat shows, RV shows, hardware shows, sporting good shows. It's hard to believe that a multi-billion dollar industry in Canada such as CE cannot muster one of its own."
Igor Kivritsky, General Manager, hifi centre, Vancouver, BC
"I don't know if I'd change too much about the industry right now. It's done a pretty darn good job of changing itself into the perfect model for stores like ours. The race to zero has actually been extremely helpful because it's weeded out a lot of unnecessary competition and left a massive gap between big box stores and high end stores like ours. Before, there was this confusing middle ground where stores that were a little better than big box (but not much) kept biting at our ankles by picking off some customers who would happily spend more but were never given a chance. Now, these stores are gone. We're setting sales records year after year, so not too much to complain about."
Igor Kivritsky
Geoff Woods, K&W Audio, Calgary, AB
"The commitment to reliability, [which] has all but vanished from the landscape. I realize that manufacturers want to have a certain degree of planned obsolescence built into their products. Otherwise, you sell an amp or a pair of speakers to somebody and they end up handing it down to their kids, who hand it down to their kids and nobody buys anything new for three generations. But nowadays, brands that used to be famous for building gear that would last 15-20 years give you the shrug when you ask them why a $2,500 receiver becomes an irreparable paperweight after four or five years. And I'm not talking about new features or HDMI versions that limit access to new features, I'm talking about failing power supplies and HDMI boards. I can confidently speak for my clients when I say, "we're tired of being your beta-testers!" If your stuff doesn't work, don't bring it to market until it does! The generally cavalier attitude by a lot of the suppliers, especially since the dawn of home computers, has been "Hey, it's just AV, nobody dies." And they'll put something out before it's ready and fix it on the fly if they find an error...In all fairness, the majority of speakers and basic two-channel amplifiers tend to be solidly reliable, which is perhaps why two-channel is enjoying such a renaissance right now. But the bleeding edge technologies seem more concerned with what they can promise than what they can actually deliver. So my plea is to those manufacturers: why can't you build some stuff that just eff-ing works? Stop concerning yourself with delivering the next big thing and just make the previous thing solid!"
Justin Cloghesy, Resonance A/V Inc., St. Laurent, QC
"Distribution, and how open brands and products are. I can buy the same URC remotes from three different places here, I can get the same HDMI Matrix from my supplier that any "Alarm Guy" or "Trunk slammer" can get from ADI. I have a 5,000 square-foot showroom/warehouse and salaries to pay, so we have a bit more overhead than the guys who run their businesses out of a caravan. Today, if your Visa card is accepted, you'll get an account through most distributors. I understand my suppliers need to sell, but these mega-type distributors make it too easy for the DIY and hobbyists to procure products. I'll never forget the conversation I had with a "Trunkslammer" who told me he sold a high-end AV receiver for over 30% off list. He justified this with "I mark up all receivers $50 and make my money on the labour.
"The other part of distribution that I think needs work is local representatives. We have our Crestron, Samsung, Control4, Totem Acoustic reps who are dedicated and work solely for those brands. If I ask them a question, I get the right answer. On the flip side, there other "reps" who have 100 lines as they are representing multiple distributors. If you've ever heard the expression "Jack of all trades, master of none..." I am painting this a little black and white. Of course there are exceptions to every rule, and we do have great distributor reps. Just don't tell me you can keep my team informed on the 50,000 SKUs you can sell me."
Elliot Cohen, Best Buy Canada/Geek Squad, Vancouver, BC
"Eliminate the use of different and colourful terminology to describe similar technologies used by competitors."
Kevin Kelly, President & COO, Stampede, Buffalo, NY
"If I could change one thing about our industry, It would be compatibility. Too many manufactures design and produce products without looking at the industry as a whole. Example, why would a company manufacture a product without discrete power commands, knowing that integrators are programming systems that should be easy for consumers to use on a universal remote, why use toggle power. Same thing with some new remote controls that are only Bluetooth- or Wi-Fi-capable. With the new Samsung 9000 series TV, they supply a "one connection" box that uses a proprietary connector supplied in a six-foot length! I laugh every time I open a TV bracket box to find 16 different screw sizes. Could they not have chosen one thread size and saved the other 15 sizes from landfill?
Greg Forrest, Owner, FM Audio Video, Brantford, ON
"...Vendor control of fixing retail prices to serve their goals. We have got to get focused on the creativity of retail electronics, and not spend our day chasing pricing and STAs."
Greg Forrest
Shawn Tokarz, Owner, Audio Dezigns, Ft. McMurray, AB
"Our suppliers' distribution techniques. They will sell their products to anybody: box stores, Amazon, and countless other online sources. Margins have gone down, while inflation, rent, and staff costs have gone up. Most importantly, pizza and beer have gone up, and they are required for any after hours custom work to get done! This makes it difficult to be a specialty dealer when you have your customer able to buy anywhere the same products we have online, and cheaper than from you. We put a lot of effort to build up these brand names then some online company or box store blows it out for cheap. Often, the big box stores will sell at 10 to 25 per cent above cost, which is too little margin for independents to price match and still be profitable. Sometimes our suppliers have B- stock, which is refurbished product, and now I see this B-stock inventory being offered on box store Websites for a heavily discounted price. I feel that the brick and mortar stores will eventually vanish. If we could somehow as independents get suppliers to offer their products to us only and not find them all over the Internet, that would make us more profitable, and then we would sell more of their products as well."
Saxe Brickenden, Director of Marketing, Evolution Home Entertainment Corp., Toronto, ON
"Our industry has a tendency to get in its own way by chronically announcing new technology waaaay before the manufacturers have even been given the specs that define the standard! It's a lose/lose/lose proposition. Manufacturers, distributors, and dealers all lose, by scaring the consumers away from what is available, before you can ship what you just announced!"
Sam Schwartz, President, Ebony TriStar Agency, Markham, ON
"Simply put, I would only allow the Internet to be used as a tool to provide the end user with the information they are looking for, and as a conduit to direct consumers to a reseller close to them. These are resellers with the product on display, can properly demonstrate the product and, of course, offer a high level of professionalism throughout the transaction, including set up of the merchandise in their home or at their place of business."
Ed. Note: All answers were edited for clarity, and to avoid repetition. Check the Industry section at WiFiHiFi.ca to a longer selection of answers we received to this very important industry question.
Photo by Mister GC; freedigitalphotos.net