Everything changes and the pace of that change can be dizzying. Change for its own sake, however, isn’t always advisable. It needs to be carefully considered.
A recurring trend in my discussions with consumer electronics dealers is their efforts in exploring avenues by which they can both differentiate themselves and seek new margin-building categories.
Over the course of the past decade, a sizable percentage of the dealers I known in several different channels have changed, adapted and evolved their business models and assortment of products and services. Sometimes those changes have been extremely successful and sometimes they’ve been less so.
Over a long timeframe, established CE and AV companies can evolve so much that their present incarnation is unrecognizable from what the first went into business for. In one dramatic example, I used to work for a residential AV integrator that first began as a hi-fi and TV shop. They evolved over time, in equal parts by design and happy accident into specializing in selling, installing and servicing C-Band satellite dish systems (remember those?), eventually growing a division that installed digital satellite, and over time grew into residential AV and control systems, of increasing size, complexity and price tags.
It’s been even more dramatic in CE. The past decade has taken an enormous toll on the roster of independent CE dealers. There are far fewer still in business than there were ten years. Of the ones that remain, their survival has depended upon differentiating themselves, often by offering services that are superior to what the big box retailers can do.
In recent years, I’ve been spending far more time in the telecom and mobility channels, in which I’ve observed that change is arguably even more frenetic and relentless than in AV. In Western Canada, a large number of the incumbent mobility dealers share a similar origin. Most were founded by long time employees of AGT, Alberta Government Telephones, as well as municipal carriers like EdTel who took early retirement buyout packages when the government corporations were privatized in the early 1990s.
They invested their buyout money in opening cellphone retailers just the mobile boom began.
As with anything, some prospered and grew, and some didn’t. Speaking very broadly, the mobile dealers who did grow remained flexible and adapted to the marketplace as it changed, adding new products and services as they emerged and dropping old ones as their profitability waned.
That’s not the only genesis of mobility dealers. One long-time dealer of mine began his business repairing cellphones. The obvious add-on to that business was to start selling accessories: cases, chargers, cables, screen protectors, etc.
While the competition in the mobile accessory space is much more fierce than outsiders might realize, it’s good great margins, and the repair business remains strong: So long as phones remain both indispensable and breakable, end users are going to need repair services.
Still, the dealer principal is looking towards the future, and at other revenue opportunities, and has begun exploring partnering with a mobile carrier to open a cellphone store.
Not every dealer I know in the various channels has evolved their business over time. I can think of quite a few off the top of my head who haven’t changed. Some of them are even still in business.
Change can be risky, but I’d suggest that not changing is even more risky.