i3 | July 20, 2020

ProSource Adapting to New Realities

Steve Smith

Dave Workman, president and CEO of the ProSource buying group, has navigated through his share of economic downturns, but never one like COVID-19. He says, “We have a disruption of the normal flow of life.”

ProSource, a group with retail sales of more than $5.5 billion and roughly 600 specialty consumer technology dealers, custom retailers and integrators, is as well-positioned as any to adapt to the situation. “With something as fast-moving and quick-changing as this, we’re as prepared as we can be,” Workman says of his members. “Our dealers are well-established businesses. They build reservoirs [of resources] to weather things like this.”

ProSource’s four leading categories in dollar volume are: TV/video, audio, custom integration, and lighting and shade products. Workman says, “There is an argument to be made that our products do better when people cocoon. You can point to online sales which has become a staple for many ProSource retailers that will be a positive. Depending upon local restrictions, retailers will have to watch floor traffic in stores and see what happens.”

As for ProSource custom integrators, he says, “Those clients are mostly going to freeze commitments on large projects until they get more direction” from the markets. He believes a slowdown on the custom integrator business will “take out the weakest, worst capitalized startups that run their businesses on a shoestring.” He adds, “While there may be short-term pain, you will eventually see a level of consolidation that will be positive for more established [integrators] like ours.”

When asked about product shortages and supply chain problems, Workman says, “There have been spot shortages, not wholesale shortages. We have advised members that there will be some and to work around it.” He explains that prior to Chinese New Year, manufacturers in China stockpile components for finished products to keep things moving. “If a receiver is assembled in Malaysia, let’s say, some components come from China, there will be a hiccup regardless of where it is made. It will have an effect.”

While there may be short-term pain, you will eventually see a level of consolidation that will be positive for more established [integrators] like ours. 
Dave Workman President and CEO, ProSource

New Opportunities

Hi-res audio may become a bigger part of the group’s business. On the content side, he says, “Consolidation is occurring. Hi-res is relevant in the way people consume content, which is streaming. When you see Amazon with 150 million subscribers making streaming available at such an inexpensive price it pushes the opportunity so we can tell the story. If we do a multiroom audio system, you should have hi-res audio and we have the brands to provide it to you.”

Virtual Reality (VR) is a new asset for ProSource members. Workman says, “We are not so much selling it, as using services like Modus, which has a VR showroom which was at our show. You can do a walk-through and create a virtual home setting and [consumers can] picture what it will look like as customers and integrators design a system.

“Lightning For You,” Workman says, “Is a remote diagnostic company and is the coolest thing. You have a technician in a home that you can actually see what they see using a tablet. It’s amazing. It’s a subscription-based product that allows you to centrally manage technicians and help them out of a jam. It got a big response from our members.”

VR products that enable custom integrators to demonstrate to consumers what their installations will look like and being able to demonstrate and sell profitable AV and smart products at retail are a big focus. “There are many places where consumers can make transactions, but few places where you can create a unique experience for the consumer like our members can,” adds Workman.

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