If you’re hungry and in a hurry and there’s a McDonald’s on the corner - you’ll probably pick up some food. If you want a nice meal and atmosphere, you’ll go out of your way for your favorite restaurant.
Conclusion, Walmart is like McDonald’s. Convenient and people will use it. For quality they can’t touch us, and our customers know it. They’ve already tried BB.
Wal-Mart is now installing TVs, PCs, and home theaters, charging $99 for a basic TV installation $399 for a premium TV service.
How big of a market is there for this? And how does it affect CE pros?
In terms of how big a market there is for this:
I believe the entire lower, middle and some of the upper tier of the CI market is in play, and has been for some time.
How does it affect CE Pros:
A new bottom will be created. Look for similar outfits (costco etc.) to play in this space as well. In contrast this will elevate BB. Since the internet began devouring margins on consumer electronics, big box retailers have been preparing for this time to come ( i.e. that nation wide roll out of Magnolia and such) . BB and the like will then move into sacred space of the CI world—and consequently the most profitable: The vast middle. If you can be purely objective here—observe some interesting maneuvers BB has made in the last couple of years:
1) By rolling out magnolias BB has already broken the CI primary line of defense: Protected Product Lines. As that relationship prospers Magnolia will begin to break into product that would make us all say ” i never thought id see the day” (just wild guessing—stuff like B&K;, Marantz, Integra, Russound and maybe entry level control systems?? i could be very wrong here also, im just speculating)
2) BB offers ISF calibration…nuff said.
3) This one is new—anyone who attended Cedia 09’, did you happen to notice 20-25 guys with Geek Squad shirts walking the show floor & attending training?
I suspect the BB folks & the like are banking on the commoditization of large chunks of the CI markets and are positioning themselves as such.
to further jisaac’s point, there is a best buy in chicago near wrigley field that has amx, mcintosh, ciera, control 4, sonar faber, and esl martin logan. what were you saying…“i never thought i’d see the day when…”
We need to remind ourselves (and customers) that these services are not necessarily inexpensive (except I believe Costco’s service IS cheap—just enough to cover costs).
Installing a TV is still a few hundred dollars (for what? 1.5 hours of work?) And that doesn’t include things like hiding cables, configuring the remote, etc.
It will catch on for sure. Lets see who they partner with for low-cost automation once they take over TV’s and want to go after Best Buy and their friends (if you know what I mean).
I beleive this will definnitely catch on, at least at a minor level. Sure Walmart is a discount store and does not carry the high grade items or control system that CEDIA dealers do, but that will not matter the consumer. Most installation done by big box installing dealers such as Best Buy, the closed Tweeter and Good Guys are TVs with minor home theaters. Sure there are multi-room and automation installs, but the majority are basic installs. Based on this customers will use Walmart like they have done ins some locations with Csotco and Home Depot. While the later were not that successful, the Walmart customer is a little different and they see Wlmart as an electroncis store.
Should CEDIA dealers be Worried?
Sure they should be, but not in panic mode, more from a be aware of the copetition mode. It was stated in a previous reply that Walmart will not attract a CI dealers customers, this is likely true, but what about new customers? Performing basic installations crreate a customer base, todays plasma hang is tomorrows home theater and multi-room system. For now the later are not a concern, but should be in the future.
This is going to catch on, maybe not at first, but it will and once it does the small jobs will disappear from CIs and not allow for the building that is needed to stay in business.
If big successful companies were not positioning themselves in our market, THEN I would worry about our market. I see this as yet another confirmation for our industry. Keep you head up, your eyes focused and your customers happy!
If big successful companies were not positioning themselves in our market, THEN I would worry about our market. I see this as yet another confirmation for our industry. Keep you head up, your eyes focused and your customers happy!
I dont follow what you mean by this. Care to elaborate?
I’m pretty sure that Morgan is saying (and I agree) that we should be concerned if CE installs were relegated to a niche market occupied by a relatively small, quiet group of companies. Our industry benefits from the exposure (and validation) that big boxes bring to the install business.
One other note on the subject. When things are good (i.e. money is being made) people migrate to an industry in droves. Usually because they are after money. When things are bad (i.e. loosing money) the only people left are the ones who love to do the work. More and more we are finding that the ones who are still with us are those who love to do the work. One of the reasons this years Cedia was exciting is because it was attended by those who are committed to this trade for a love of what they do.
Now that’s a generalization, but makes my point. Find your passion then make a commitment to it. Good times and bad. There is more to it than money. This will increase the value proposition you and your company offer and in the long run, if you can properly manage the metrics of your business (including money) you will survive the trying times.
I’m pretty sure that Morgan is saying (and I agree) that we should be concerned if CE installs were relegated to a niche market occupied by a relatively small, quiet group of companies. Our industry benefits from the exposure (and validation) that big boxes bring to the install business.
Believe this to be true.. Morgan is correct in that big box performing installs validates the custom industry and will help drive the concept of installations.
I’m pretty sure that Morgan is saying (and I agree) that we should be concerned if CE installs were relegated to a niche market occupied by a relatively small, quiet group of companies. Our industry benefits from the exposure (and validation) that big boxes bring to the install business.
Umm.. a niche market occupied by a relatively small, quiet group of companies is by and large what CI is. Can you provide specific examples ( in this industry or others) of how a large corporate entity has helped or benefited a local specialty shop it competes with? What do you mean by “validation”? Is the implication that there is some sort illegitimacy to these micro businesses known as CI firms? if so, how exactly does competition from large corporations improve that image?
When things are bad (i.e. loosing money) the only people left are the ones who love to do the work. More and more we are finding that the ones who are still with us are those who love to do the work. One of the reasons this years Cedia was exciting is because it was attended by those who are committed to this trade for a love of what they do.
What do you base this assumption on? How do you go about gauging the level of “work love” a business owner has or dosent have and how does that translate into a bottom line for a viable business? Regarding your point about Cedia, Once again—how do you know about the level of commitment or lack there of for any attendee? Best Buy attended Cedia 09 in record numbers, by your logic what does that say about them?
Now that’s a generalization, but makes my point. Find your passion then make a commitment to it. Good times and bad. There is more to it than money. This will increase the value proposition you and your company offer and in the long run, if you can properly manage the metrics of your business (including money) you will survive the trying times.
You make very romantic assertions about what a business should be ( and i dont necessarily disagree with all of it) but beyond the theoretical business moves with numbers and empirical data. There is more to it than money, but not much. Using empirical data, can you illustrate how passion and commitment will increase the value proposition of any organization enough to survive any economical hardship?
Believe this to be true.. Morgan is correct in that big box performing installs validates the custom industry and will help drive the concept of installations.
Ive already asked the question on “validation” above. Big Box will help drive the concept of installations, but in which direction? Is that direction beneficial to you?
My business is located only 5 miles away from a BB, PC Richards, 6th Ave, and Expo. A few years back, we also had the flagship Wiz store and Circuity City in that mix.
The way I see it, once a client goes into one of these places, they are immediately drawn back to me. Once a client knows & understands 1st hand the level of competence and service they’ve just experienced, not only do they appreciate what I offer, they’re also convinced themselves that what I charge for product and installations is well worth every penny.
Competition should be embraced and dealt with accordingly. IMO, more competition equals more exposure to what’s being offered in today’s marketplace to people who would otherwise have no clue. I say, “Bring it on, and give it your best shot. I’m not afraid because I’m better than you.”
Let’s also not forget all of the clean up work we get to do, (and charge an extra premium for our services because the product was not originally purchased from us), because THEY WILL screw it up.
Umm.. a niche market occupied by a relatively small, quiet group of companies is by and large what CI is. Can you provide specific examples ( in this industry or others) of how a large corporate entity has helped or benefited a local specialty shop it competes with? What do you mean by “validation”? Is the implication that there is some sort illegitimacy to these micro businesses known as CI firms? if so, how exactly does competition from large corporations improve that image?
I tend to think this kind of change ultimately benefits the consumer; if the industry is smart any benefit to the consumer is a benefit to the industry. It’s not a factor of ‘good’ or ‘bad’ but how you use change to your advantage.
For years I’ve seen editorials from the custom market lament how current trends are eroding the business and margins, which is probably true if you only see it from the perspective of the ‘historical model’ and the ‘historical market’. Times they are a changin’. Protected channels, limitied or obfuscated information, and no competititon are advantages of the past.
to further jisaac’s point, there is a best buy in chicago near wrigley field that has amx, mcintosh, ciera, control 4, sonar faber, and esl martin logan. what were you saying…“i never thought i’d see the day when…”
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