Making a Case for Consumer-Direct Brands
Gary Yacoubian, president of SVS Speakers, says direct brands can help brick-and-mortar dealers boost visibility and augment revenue streams.
Robert Archer · March 14, 2014
The lines used to be clear: Manufacturers designed and produced products for specific markets such as specialty A/V, custom installation, mass-market retail, and direct-to-consumer.
Ever since the economic recession, however, the lines between markets have not only blurred, they have completely evaporated.This has been a painful reality for many manufacturers as well as custom and specialty A/V dealers.
Today’s electronics market is no longer defined by category. The modern electronics industry is now defined by product application, which means installers have to be open to using a wider variety of products to satisfy their clients.
Apple & Sonos Symbolic of New Era
Over the past decade two large and well known manufacturers have emerged as universally accepted vendors to electronics dealers in all markets: Apple and Sonos. Simultaneously, traditional specialty and custom manufacturers that include Paradigm, Velodyne, and KEF have implemented a hybrid distribution approach that provides consumers some level of access to their products.
Gary Yacoubian, president of SVS (a Specialty Technologies company), says his company’s approach in today’s market is to look for partnerships that are mutually beneficial to all parties. Yacoubian understands the current market conditions and the negative perception that some dealers have about direct brands, but he says direct brands can help dealers where they need the help the most by adding to their revenues.
“If the partnership is not benefiting both sides, it will never make sense,” he states. “But to draw an arbitrary line in the sand against direct brands based on perception, they will undercut price or abandon customer service after the point-of-sale is short sighted. By raising the average selling price and injecting some excitement into a stale category, direct brands can make a significant difference to the bottom line.”
One of the opportunities Yacoubian cites is the scenario of an established installation or specialty A/V business expanding its operation by adding e-commerce to revenue streams. This can increase a dealer’s web traffic and can also expand its geographical reach, he claims.
“Having a multi-channel sales approach is something we view as an intelligent, future-facing model,” he says.
Moreover, Yacoubian points out just because a direct brand is easily accessible to purchase, that doesn’t mean some consumers want to go through the process of installing that product or system into their home.
“Installation and face-to-face communication are important to a lot of customers, especially when they are preparing to shell out $1,400 for a 150-pound subwoofer,” he explains. “That will not change. The demand for installation doesn’t go up or down based on what brands a business carries since people generally know whether they are going to install a system themselves before they make the purchase. DIY’ers (do-it-yourselfers) will remain DIY’ers. They might just visit a retail [store] instead of ordering online if the brands they prefer are available, the price is equal, and they don’t want to wait for shipping.”
Leveraging the Marketing Opportunities of Direct Brands
In addition to these companies’ ability to expand the footprint and reach of a custom installation and specialty A/V company, Yacoubian says a brand like SVS is willing to work with brick-and-mortar dealers to support their sales and marketing initiatives. He recalls one of the most effective marketing tactics his former company MyerEmco used to employ was open house events. With an initiative such as an open house he explains, direct brands can support the event through increased consumer outreach.
“Direct brands can lend their own promotion to these kinds of events through e-newsletters, geographically targeted PR, social media support, or even with on-site representation,” he states. “Because direct companies are rooted in online culture, they are optimized to reach web savvy, and coveted younger audiences.”
Another benefit that can aid a dealer’s marketing initiatives is the fact consumers may seek out local products they viewed online in a showroom environment. The Internet component of direct brands also helps small electronics businesses to bolster their SEO (search engine optimization) and other digital marketing efforts, which are increasingly important as the media market shifts into the digital realm.
“Since almost all research starts with the Internet, most customers will validate their purchase online before coming into a store to hear a demo for themselves,” emphasizes Yacoubian. “If someone searches ‘best subwoofer under $1,000,’ they are likely to come across a direct brand because those are strategic keywords we try to rank for. If you are the only brick-and-mortar dealer available that offers the product a customer wants, it’s just a matter of the individual’s location purchase habits and preferences.”
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Bob is an audio enthusiast who has written about consumer electronics for various publications within Massachusetts before joining the staff of CE Pro in 2000. Bob is THX Level I certified, and he's also taken classes from the Imaging Science Foundation (ISF) and Home Acoustics Alliance (HAA). Bob also serves as the technology editor for CE Pro's sister publication Commercial Integrator. In addition, he's studied guitar and music theory at Sarrin Music Studios in Wakefield, Mass., and he also studies Kyokushin karate at 5 Dragons in Haverhill, Mass. Have a suggestion or a topic you want to read more about? Email Robert at email@example.com
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