Dealerscope: How did this year’s Fall show [held Nov. 9 in Hershey, Pa.] compare in size, vendor mix and dealer mix with last year’s – was it larger? Are you up or down in attendance for both dealers and vendors?
Rob Eby, VP of Purchasing, D&H Distributing: Attendance was up over last Fall’s show; as far as vendors, it was completely sold out. It was a really good vendor mix between CE and computer products. The predominance was still computer-product-based, but there were a lot of great consumer lineups including Roku and Revogi and TCL, and others, on the gaming side. There were close to 1,000 dealers.
DS: Are you looking to add, or have you added, certain vendors that you didn’t have before – and what categories do they serve?
Eby: Vendors were similar in mix. But the layout and flow of the show was changed. We had eight seminars in the morning – including by Cisco, Intel, Microsoft – some really good sessions for educational purposes for our base.
We changed the layout again, giving it more of a CES-type look and feel, with larger aisles. Dell had a pretty big presence in the center, and there was a big gaming area. It was very exciting, and crowded right up until the end, even with rain most of the day.
DS: How has your business changed in the last year? Are your sales up from 2015 year to date? What dynamics have affected these changes?
Eby: We’re up in sales, which is exciting in a tough climate. We’re starting to see October was very, very good, and November is up to a very good start. I’d say we’re bullish. We’re seeing in the numbers, where some of our competitors are flat to down, that we’re actually up.
Bright-spot categories? I’d say Notebook computing is up, as well as some of our consumer products are way up. I’d use Amazon as an example – the Echo and the Dot. That’s an area we’re doing very well with. You know, Amazon is a little restrictive with who they’ll allow us to sell, but they created a really good ecosystem for our dealers to tap into. They can essentially set up a complete connected home by using the Amazon Echo products.
So people are buying the Echo, and I think our dealer base needs to find a way to tap into that and support it. If you look at Amazon’s developers – and who they’re working with – a lot of them are our vendors. TP-Link and Belkin both have connector plugs that work with the Echo – all products that will be available to our dealer base. They have cameras that now connect into the Echo that are available to our dealers. There’s Revogi, that has Bluetooth lighting, and it’s not just controllable via your smart app but also via the Echo, so you can turn lights on and off now.
It’s an easy way for our customer base to tap into, as they’re looking for ways to do simple home automation. There are so many Echos being bought for the holidays, and it gives them an upsell to customers who may have bought the Echo from Amazon.
DS: Please talk about some of the biggest initiatives you put forth at the show. What are dealers asking for the most from you, as their distributor of choice?
Eby: There are a couple of initiatives on the consumer side that we think will be really hot. We’ve touched on the connected home side of the business, but I’d tell you that the whole VR/AR thing we think will be really big, between gaming, and other applications. That should be a big holiday gift.
We think that drones are going to be big again this year, too. And in particular, last year, I’d say a lot of the drones were – for lack of a better way to put it – more “toy-ish.” Whereas this year, [sales are] tending to be of the more ‘prosumer” types [meaning higher tickets for the dealers]. People are looking in that $500-plus range, as opposed to that $49.99 drone that flies for five minutes. The larger drones will fly for 20 minutes-plus, and come with multiple batteries.
DS: Please comment on what you feel are the most promising and profitable categories for your dealers this year and why. Which emerging technologies hold the most promise? What are the hot categories?
Eby: In the CE space, 4K, the connected home, VR/AR, gaming. We’re starting to see a lot of requests in VR around the K-12 business sector. It will be interesting to see how that evolves.
We chose not to carry hoverboards last year, and are choosing to say on the sidelines again this year. All the issues we’re seeing around batteries with them, we’ve chosen not to involve ourselves in that till it’s maybe a little more mature in the market, and they’ve worked through those issues. We’re watching and seeing how that evolves with both the hoverboards and the skateboard-type products.
DS: What market factors do you see that are most profoundly impacting your customers’ businesses now – and what will affect them down the road, into next year? Are you optimistic about the direction of your customers’ business – and why?
Eby: We’re optimistic about the business and the economy. We think that our business will continue up, which means our dealer base will continue to grow, too.
I think what our dealers need to constantly be doing is look at us as a source of education, and for the hot new technologies – whether wearables, or a Netatmo [smart home product], that can set them a little apart. There’s definitely the customer that wants to touch and feel and use things. Certainly, we all know the retail climate is very difficult out there. So anything they can do to set themselves apart in educating the end customer will help them to be successful.
Certainly, if they don’t have an etail presence, it can be difficult to compete against the etail marketplace. People like instant gratification and having it a product at their house in a couple of days. You’ve even seen some brick-and-mortar customers of ours having their web sites starting to compete with some of the larger etailers that offer that same type of customer service that some of the larger competitors do.
Anything they can do to bring in creative brands and set themselves apart and try to help educate that end customer with education they don’t always get from a web site—having that educated sales floor is still a plus.
