HES Focuses on Content, Exclusive Lines

Home Entertainment Source (HES), the specialty electronics leg of BrandSource and strategic partner of Progressive Retailers Organization (PRO) Group, laid out some ambitious goals during its group meeting at CES 2010.

It told members that it plans to branch out or expand its offerings in several areas:

• Gaming
• Mobile devices
• Home automation
• Computers
• Energy management
• Subscription-based content
• Self-branded or exclusive product lines

While the first five revelations probably fall into the no-brainer category, the latter two are somewhat innovative — at least, there aren’t many established formulas for success.

Content

HES doesn’t have a formula for dealers making money on subscription-based content either, says HES executive director Jim Ristow. The plan is to figure it out.

With 564 dealers — it gained 34 dealers in 2009 — Ristow feels that HES holds a lot of cards. He says the group plans to take that specialty audio/video volume “and go to service providers, solution providers and leverage the group as a whole with PRO.”

Collectively, Ristow expects that the buying group and content providers will be able to come up with solutions for members to earn money on content.

Product Branding

For many HES members, there isn’t enough segmentation between their specialty and custom installation arena and the retail channel, according to Ristow. During CES, the buying group told members it will put pressure on manufacturers to private-label products or create specialty-channel exclusive lines.

Vizio, for instance, recently announced a line of LCD models that will be available exclusively to specialty and custom dealers, but it hasn’t announced specific distribution plans.

“Leveraging a manufacturer’s brand for exclusive or derivative models or a series exclusively for PRO/HES” is one way to create “a higher degree of channel segmentation,” Ristow explains. So would HES- and PRO-branded products, he adds.

Exclusive lines are important to the specialty channel, which needs to establish itself as a step-up to big-box stores, according to Ristow. “Some suppliers consider regional box movers specialty A/V and our belief is that many of them don’t have the wherewithal to explain the robust features and benefits of premium products. This is a strategy to make sure that suppliers will maximize their best of class features and benefits.”