There are few certainties in the market place, but losing customers to confusion is one of those. Another has to do with customer frustration and how it usually precedes the demise of customer trust. Ultimately, the fall-out always directly impacts the consumer, who end-up without industry support and products that are anything but "do it yourself".

Knowing Your Market

Paul Fida

KNOWING YOUR MARKET
By Paul Fida, author, `Management in a Bottle,
How to Start and Effectively Manage your Custom Audio/Video Installation Company?

There are few certainties in the market place, but losing customers to confusion is one of those. Another has to do with customer frustration and how it usually precedes the demise of customer trust. Ultimately, the fall-out always directly impacts the consumer, who end-up without industry support and products that are anything but "do it yourself".


Many years ago Yogi Berra was quoted as saying "You got to be careful if you don't know where you're going, because you might not get there".

Although Yogi's warning comes with some confusion, there is nevertheless a parallel to be drawn between the results of poor planning and the threat that now looms over the future of electronic specialists everywhere. This threat concerns a serious and potentially devastating trend developing in the general retail marketplace - namely, the emergence of hardware and other well-funded `chain stores' venturing into the arena of `custom installation' products. Right now, certain large stores are `testing' the waters, but their presence could spell a change in product distribution that could leave little more than programming and labor to the custom installation industry, while a blindsided consumer pays the bill.

Am I over-reacting? You decide. Recently, a certain large national hardware chain store (which shall remain nameless), has taken on a line of popular remote controls (which shall also remain nameless) for sale to the public. And not just any "unified" remote. No - I'm talking about remote controls that - up to this point, have been almost exclusively available through custom installers, because of the fact that they require more than basic programming - and in some cases, elaborate programming (by experienced Custom Installers), in order to achieve their optimum capabilities.

What is more interesting is the fact that these particular "automated" remote controls do not appear to be available for sale in the two largest electronic-based chain stores! Do these electronic-based chain stores know something that "hardware" chain stores don't? I'm inclined in that direction. After all, the first rule of business is to "do what you know" - and the first rule of retail is to "sell what is saleable".

Violating primal rules of business and retail not only blurs market positioning but also confuses consumers. Should they now go to hardware stores for their electronic needs? If so, will there be anyone there to assist them? Will the hardware chain stores now offer "assistance" or "clean-up" in aisle 5? Before you start drawing any lines to a Costco or Sams' Club environment, consider the fact that "warehouse-type" businesses make no apologies for selling lettuce alongside plasma TV's. In fact, their entire existence is dependent upon the premise of "wholesale" purchasing, regardless of what the item is. Therefore, if someone can't find their way to the electronic department at a discount warehouse, they'll most likely find their way to the hardware department.

Conversely, if someone can't find the hardware department at a hardware chain store, it's a whole different story.

To make matters worse, if people purchase electronics, such as sophisticated remote controls, at their local hardware store - they will most likely end-up calling a Custom Installer for programming or integration features. However, when they find out how much CI's will need to charge for that service, they will probably go screaming back to the hardware store for a refund, bad-mouthing the custom installation industry on the way. Not to overuse baseball's greatest line, but who's on first?

Meanwhile, the electronic "chain stores" who have opted out of this particular product may have done so for the following reasons:

  1. The programming is too complex to be easily understood by the novice consumer,
  2. Mistakes in programming could easily lead to returns, creating a mountain of B-Goods that would have almost no "clean" avenue of after-market sales,
  3. The manufacturer has been (up to this point) limiting the avenue of sales in order to maintain the integrity of their products - selling only through Custom Installers who could program and service the product and/or
  4. The manufacturer has been controlling distribution to assure a minimum percentage of profit to their CI dealer base, which would allow for warranties to be fully protected to the consumer.

Of course, the million-dollar question here is whether or not the larger "chain" stores will realize their error in judgment before the market - and their own position - is seriously compromised. Sadly though, if corporate history has taught us anything, it has taught us that what usually follows large corporate mistakes are even larger ones. So, I don't expect that this venture will be the last - however, I think it important to look at what is happening behind the scenes. In other words, perhaps the real question to ask concerns what - if any, responsibility should a company feel toward its' consumers? Just because a company has room for a product on its' shelves, does that mean it should be selling it? Should the real-estate warning of "buyer-beware" now apply to retail?

There are few certainties in the market place, but losing customers to confusion is one of those. Another has to do with customer frustration and how it usually precedes the demise of customer trust. Ultimately, the fall-out always directly impacts the consumer, who end-up without industry support and products that are anything but "do it yourself".

So then, will the practice of selling "everything" to "everyone" become the flavor of the month, or will the corporate giants realize that if they're not careful, what they want to be and where they want to go may have nothing to do with eventually getting there - and this is where I came in.


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