i3 - May/June 2016 - 44

Business

BY STEVE SMITH

DEALERS ARE LEVERAGING
EXPERTISE TO SELL, INSTALL IOT
Whether you call it the Internet of
Things (IoT), home automation or smart
home, the networking and control of individual
devices and systems in and around residences is
expected to be the next great market.
The size of the potential market is predicted to
be vast and it is not just
for consumer technology
products. For instance,
the Association of Home
Appliance Manufacturers (AHAM) estimates
the projected economic
impact of IoT-via appliances, security, safety
and energy management
products-to be between
$250 billion to $350 billion by 2025.

Dave Workman,
president/CEO
of ProSource,
said that this
year home
automation,
networking and
control will drive
15 to 20 percent
growth for its
members.

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MAY/JUNE 2016

Other studies on the
market, which includes
CE products and systems, also show the sales
volume will be massive.
But before we reach this
brave new connected
home market, a couple
of questions need to be
answered:
* When will the
market truly emerge,
or will it be a gradual
acceptance?

* Who is going to
sell and install these
systems?
The market is here
now, in its early stages.
Many believe that the
usual giants-Amazon,
Apple and Google,
not to mention Home
Depot and Lowe's-
along with cable
providers and utilities
will attempt to grab as
much of the potentially
enormous IoT market
as quickly as possible.
But independent retailers and installers may
have something to say
about that.
It's all About
Experience
I spoke with three retail
buying group executives
whose organizations
represent privatelyheld and independent
electronics and major
appliance dealers, as
well as custom installers. These retail groups,
and others like them,
believe their expertise
in consumer technology
and appliances uniquely
positions them to capitalize on IoT.
Jim Ristow is CEO of
BrandSource, a buying
group whose retailer
and integrator members
generate more than
$12 billion in annual
sales in electronics and
appliances, among other
categories. At the group's
recent convention he said
that its focus on appliances will now be in premium products. That's

significant because its
CE operation, ProSource
is successfully using the
same approach.
Dave Workman, president/CEO of ProSource,
said that this year home
automation, networking and control will
drive 15 to 20 percent
growth for its members.
But he warned, "We
must evolve" with these
categories and IoT in
general, "so we don't get
locked out" of the potential growth to come.
In a candid discussion
with both executives at
the show, Ristow said
that the "core strength of
the organization" is that
it is made of up retailers and installers who
understand the major
appliance and CT industries. Workman said that
ProSource is focusing
on business models for
IoT in all its forms that
need installation versus
do-it-yourself solutions.
Workman noted that
some see the BrandSource organization as
being too diverse-from
selling and installing
cooking products to
4K UHD TVs to home
security systems. But
in the near future, "The
last laugh will be had by
us since (BrandSource
has) the expertise," in
selling and installing the
wide variety of products
that will be part of the
IoT world.
Richard Glikes is
president of Azione
Unlimited, a buying group whose 140

integrators and dealers
have combined annual
sales of $450 million
and specialize in CT
related products and
systems. An industry
veteran and a realist,
he commented that the
talk about IoT "is a little
bit of hype at this time,"
but that in "two, three
or five years, that's a different story."
When asked if his
group might sell major
appliances down the
road, or accept white
goods dealers as members as IoT takes hold,
Glikes noted, "We sell
garage door systems
now and security systems. Appliances may
play a role for us."
Glikes said, "We have
to be open-minded
whether we partner
with appliance-based
organizations or take on
appliance members." He
added that in Azione's
ranks there are integrators and installers
"who have good interior
decorators on their
staffs. You could see
[an Azione member in
the future] sell electronics, appliances and
furniture."
Putting it in perspective, Glikes remarked,
"If you told me 25 years
ago we would be selling
lighting and shades I
would have said you
were crazy."
Steve Smith is editor at
large of TWICE and
was its longtime editor
in chief.
I T I S I N N O VAT I O N

Astronaut Images/Glow Images

R E TA I L ST R AT EG I E S
https://www.aham.org/ https://www.aham.org/ https://www.aham.org/ http://www.brandsource.com/
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