Ultimate Electronics: Meet The Hybrid

With 32 superstores in nine states, each averaging about 31,000 square feet, Ultimate Electronics exemplifies the good fruits a great marriage can produce. Coupling retail stores with installation services, it has hit upon success with the hybrid formula. This comes in the wake of turbulent 2005 in which Ultimate filed for Chapter 11 bankruptcy protection and closed about half of its stores.

Things are looking up in 2006, according to Ultimate Electronics. Headquartered in Thornton, Colo., the hybrid dealer sells every recognizable brand spanning television and accessories, home audio and theater, video players and recorders, camcorders and digital cameras, car audio and electronics, satellite radio and TV, and portable electronics. It installs what it sells, ensuring what it terms "an outstanding customer purchase experience."

Marc Hoffmann, vice president of builder and commercial sales for Ultimate Electronics, says the company "has a dedicated team that exclusively supports our retail customers with an emphasis on retrofit expertise and training. Installers are taught to optimize each system for performance and ease of use, which is not always a simple task with today's wide array of connection and configuration options." Services, he says, range from basic home theater hook-ups to whole-house automation.

The need, Hoffmann points out, is definitely there. "The reason installation has become important to the retails side of the business," he says, "is that in order to get a quality home theater experience, you have to integrate complex products. It can be difficult to put them together properly for the best experience.

Consumers who want to mix audio and video products and automate them to get the best possible picture and sound quality, and also make the system user-friendly, often benefit from the help of a professional."

To keep Ultimate's retail sales staff on the cutting edge, the company invests a lot of money to put them through regular and rigorous training on new retail installation services and technologies. To keep customers confident, this fact is also touted prominently in store signage and advertising.

Leveraging the fact that it offers the products and installation services that consumers crave has been somewhat effortless for Ultimate. "We're fortunate in that we are a recognizable brand," says Hoffmann. "We are experts in the retail space and offer a premium resource. Offering installation services as well under that umbrella has been pretty easy."

What It Means, Ultimately

Consumers, Hoffmann says, come to Ultimate for its expertise. The company has about 200 full-time field technicians, many of which, Hoffmann says, have several years of service with the company coupled with a previous retail background. That enables them to provide popular low-voltage solutions such as home theater, multiroom audio, lighting control, central vacuum, security, home networking, satellite, intercom, CCTV and home automation. The company has also recently begun exploring opportunities in whole-house surge protection and power backup.

"We try to stay on the cutting edge of new technologies and work with a number of leading power companies to develop programs around whole-house power and surge protection," Hoffmann adds. "Our products are designed to protect homes from short-term power interruption or provide long-term power supplies."

Many of the homes that Ultimate Electronics protects and enhances are homes it equips through its network of builder clients. The company works with more than 40 builders, including eight of the nation's 10 largest homebuilders. Although Ultimate Electronics has offered installation services for decades beginning with early off-air antennas, it began working with new homebuilders in the early 1990s. The reasoning? To offer expanded technology solutions in response to consumer interest and to provide a selling competitive advantage, according to Hoffmann.

Ultimate supports residential installation services -- from traditional to high-end custom -- each requiring specialized selling, design and installation strategies and resources. But the builder segment, Hoffmann maintains, is one of Ultimate's fastest-growing installation categories. "We support the builder community with a fully dedicated employee team including its own operations, sales, and field organizations."

The builder segment, led by Hoffman and national builder sales manager Jim Head, is structured expressly to meet the particular requirements of builders, and includes local installer management, full-time design center representatives, quality control supervisors, and scheduling teams. The most difficult aspect of servicing builders, Hoffmann notes, has historically been changing the culture in some markets where the typical home includes just two phone and two cable drops as the standard. "Fortunately, more builders now recognize that home values and buyer satisfaction increase exponentially with enhanced technology," he says.

The highest demand Hoffmann sees is for basic infrastructure to be in place in the home. "Consumers want to go into a room and connect phones and video have Internet access wherever they choose to work and be entertained," he explains. "Consequently, structured wiring is one of our most popular services. Security is also in high demand," he adds. "Industry data shows that the highest levels of consumer interest fall to structured wiring, security, and then home theater. Interest in central vacuum is also going up."

Although Ultimate Electronics has stores in nine states, it also provides builder services in places it doesn't have stores. "If we're working with a builder who wants standardized pricing, we can deliver that," says Hoffmann. "But most builders we work with build in different communities and the packages they offer often vary. We provide a custom solution for builders, not cookie-cutter ones."