i3 | December 29, 2017

Azione's Profit Concerto Blooms

Azione Unlimited, the buying group of custom integrators (CI) and vendors, thinks outside the box. The latest move by its president, Richard Glikes, illustrates how consumer technology is moving into new areas. I caught up with Glikes when Azione celebrated its fifth anniversary. We talked about his decision to sell the Steinway Spirio, a high resolution player piano that plays the performances of great pianists as if it were a live performance.

Glikes explained the logic of the group, consisting of 179 CI businesses selling a player piano. “Spirio was referred to me by a friend in the music business who also knows Steinway & Sons,” he said. “They want to get the right [upscale] clients, and we have those clients.

The Spirio comes in two models, one with a five-figure price tag and the other with six. Given the cost, and the fact that the overwhelming majority of Azione’s clients are among the wealthiest in the country, Glikes believes this will be a winning partnership. He said, “Steinway is obviously interested in music, and audio was how many of our members entered this business.” Azione’s CI members, “see plans of upscale homes before they are built. Some plans say ‘music room,’ while others would be a great place to put a piano,” he added.

Glikes had the initial meeting with Steinway at its Manhattan offices and took a tour at the factory in Astoria, Queens a few months later. “When we visited the factory, watching them build pianos by hand, I knew we did the right thing.” Each piano takes 11 months to build so the first few Spirios sold by Azione will be installed next year in luxury homes.

Whether it is the Steinway Spirio or Azione’s more traditional categories, the keys are profitability and sales growth. That was the subject at a recent two-day Azione meeting in Philadelphia where 30 of the 44 vendors met with dealers on “what we do well and what we could improve.” One of the things that helped to drive business for the group this year was a contest that was designed to “generate more business for our vendors,” and dealers who added vendors to their mix. Five dealers and four vendors won prizes based on that criteria. The bottom line, Glikes said, was that they “had 438 lines adopted by our dealers with 89 of our dealers adding at least one line.

“We got people focused on our brands,” he continued. “We have a group of happy vendors. Our overall gross dollars for the seven months of the contest was 30 percent.” The long-term effect of such a contest in the custom business is, “Once you buy a line, you stay with a line. We got [vendors] in the door.” Azione is planning another contest next year.

The custom installation business is not retail, in that the fall and fourth quarter are not the key time periods for these technology companies. Glikes reported that for his group, “low- and middle-priced jobs are okay, but the big jobs are back. Our dealers are focused on the high-end.”

As for Azione’s competitors, Glikes noted, “The real thing now is we have the attention of Amazon, IBM, [and other] companies with artificial intelligence, virtual reality and voice command. We have the attention of the [corporate] giants who will try to come in and make this simple. It’s going to be very interesting. This is the next scary thing out there, the big boys playing in the little pond.”

In the meantime Azione dealers are growing not only with distributed audio, but home security, lighting and shade installations and, of course, premium 4K UHD TVs.

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