ProSource Readying Signature Vendor Programs, Recruits New Members

ProSource, formed between PRO Buying Group and BrandSource’s Home Entertainment Source (HES), is aiming to tap Signature vendors in audio, video and control and automation, the latter having already been formed with Control4, Savant and Universal Remote Control. PRO and BrandSource first announced plans for Signature programs in 2011 (CED Jan 7/11 p3), but PRO got sidetracked with the liquidation of member Sixth Avenue Electronics (CED Jan 10/12 p3). With the creation of ProSource last year and the forming of joint buying committees, the group is making another push with Signature, where vendors would benefit from order forecasting, Ristow said.

The new program stems in part from PRO and BrandSource forming a steering committee comprised of members of both groups aimed at addressing vendor questions about ProSource buying as a single organization, HES President David Pidgeon said. BrandSource tried a similar Premiere program (CED March 27/07 p1) prior to the forming of ProSource.

"We got together and made a decision that in order to make this work every program has to fit together,” said Pidgeon, who also is CEO of Dallas retailer Starpower. “There was some choppiness in the beginning with vendors saying it’s not really one group so we put together a steering committee to go over it. We are truly serious about making sure everybody is together on this."

The Signature programs could have sub-sections to address specific segments such as 4K TVs and will eventually extend down to other categories like Blu-ray players. Audio will likely be divided between electronics -- AV receivers, amplifiers, preamplifiers -- and speakers, Ristow said.

"We want to make sure the industry understands the message of where we are taking ProSource as the national alternative for premier and specialty goods,” Ristow said. “Members understand the message, but it’s a question of harnessing that power to be more focused with key vendors and having our members move in one direction."

ProSource will continue with separate PRO and BrandSource HES group meetings, but with some members of the respective organizations attending them, Pidgeon said. PRO has its annual meeting in San Antonio in May. But ProSource will make a concerted effort this year to jointly recruit prospective members that fit its dealer profile, Ristow said.

"To continue to remain relevant with our vendors and continue to grow sales we need to be larger, not smaller,” Ristow said. “You are going to see us focus on how do we bring the right dealers to be members. We will be recruiting new members but finding the right ones with [the] right profile for the group."

ProSource combined has just under 600 members, including 15 from PRO and the rest from HES, and combined annual sales approaching $3 billion. The average HES dealer typically has $2 million to $4 million in annual sales, with 70 percent of it coming from custom installation, Ristow said.

To address the changing dealer profile, ProSource formed a commercial AV buying committee to help build inventory to supply the increasing number of dealers handling business installations, Ristow said. The inventory and supplier lists were built up gradually during the past six months, initially drawing from the professional divisions of video suppliers like Samsung and LG Electronics. The inventory ranges from commercial LCD displays to whiteboards, Ristow said. Planar took up booth space at the BrandSource vendor show here to demonstrate its Ultralux 70-inch 1080p LCD commercial display along with its Clarity Matrix LCD video wall system that can be configured with 46-, 55- or 60-inch panels. The inventory is being housed in distributor Ingram Micro’s facilities, which help operate BrandSource’s Expert Warehouse program.

HES is also nearing an agreement with a vendor to supply tablets to its members, many of whom already use them in custom installation, Ristow said. Other HES members may view the tablets more as customer traffic builders for their stores. The tablet vendor will likely be drawn from AV suppliers already in the category like Samsung, he said. HES so far has remained outside the smartphone business, owing largely to the carrier agreements those require, Ristow said. “It’s difficult to scale that to an independent dealer that doesn’t run that as a true standalone business,” he said.

BrandSource Notebook

Seven years after merging with BrandSource, MARTA Buying Group lives on as Resource Plus, a collection of 50 to 60 dealers and headed by General Manager Robert Thompson. At the time of merger with BrandSource, MARTA had 93 dealers. MARTA initially formed a partnership in 2005 with Associated Volume Buyers (AVB/BrandSource), a group then headed by current BrandSource CEO Bob Lawrence. The Resource Plus dealers aren’t regionally based like BrandSource Southeast and others, instead fitting a similar profile in selling CE and major appliances, Resource Plus members said.

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BrandSource is seeking to widen deployment of a new point-of-sale cloud-based system with its members. It has been beta tested with about 10 members since August and will help in tracking shipments and group forecasts, which are a key ingredient in garnering vendor promotions, Lawrence said.

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LG Electronics will ship its $12,000 55-inch OLED TV in the spring and has plans for a second 55-inch model and possibly other sizes by fall, said Account Manager Bill Brush. The second OLED TV set will have a detachable stand, with the electronics housed in the set itself, company officials said. The 3D-equipped EA8800, like the EA9900 shipping in the spring, will feature LG’s Smart TV Internet-connected platform, dual-core processor and Magic remote that allows both voice and gesture control, company officials said. Meanwhile, LG also is readying 55-inch and 65-inch 4K LCD TVs for Q3 delivery that supplement the 84-inch model LG introduced in November, company officials said. Pricing on the new models hasn’t been set, company officials said. The 4K sets feature a 240 Hz panel and dual-core processor. The 4K models will be paired with the BP730 Blu-ray player that will be Internet-capable, with 2D/3D conversion and 4K upscaling. LG’s standard TV line will consist of 21 3D-capable models starting with a 27-inch set and include both 120 Hz and 240 Hz panels. LG also is expanding its line of Google TV-equipped models to seven from two in 2012, ranging from a 42-inch screen size to a 60-inch, company officials said. The bulk of the Google TV models, which ship in March, carry about a $200 premium over similarly equipped sets based on LG’s Smart TV platform, company officials said. Both Smart TV and Google-based models contain Nuance Communication’s voice recognition technology, but the Google models can handle phrases for searches versus single words used with Smart TV, company officials said. In selling Google- and Smart TV-based sets, LG “gives the consumer more options since Google users may be drawn to the Google TV platform, while people who don’t care either way may choose our Smart TV,” an LG spokeswoman said. Overall, LG will have 28 Internet-capable models. All TV models will have MHL connectors this year for linking to smartphones, company officials said. The Cinema 3D sets also have Intel’s Wi-Di technology. In plasma, LG will field five models in 60-, 50- and 42-inch screen sizes. The line will include two 720p sets, company officials said. LG will have three Blu-ray players all based on the Smart TV platform and with Wi-Fi. There will be four 5.1- and 9.1-channel home theater speaker packages, all with built-in Smart TV with 1,000 watts and 1,450 watts power. LG also is fielding five 2.1-channel soundbars in 40-watt to 310-watt packages with Wi-Fi and designed for 42-inch and 47-inch LCD TVs.

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Toshiba will carry a mix of active-shutter and passive 3D 4K LCD TVs to appeal to both segments of the market, National Training Manager Andy Farr said. The 84-inch 4K set ($20,000) uses an LG Display passive 3D panel, while 58-inch ($7,000) and 65-inch ($10,000) sets will have active-shutter versions from AU Optronics, Toshiba officials said. The three sets will ship by June, Farr said. “Some of our sets are active and some are passive so if a customer wants 3D, we have it,” Farr said. Toshiba has five 3D models in all. One Toshiba 3D set that won’t make it to the U.S. market is the 55-inch glasses-free model that was sold last year in Japan and Europe at $11,000, Farr said. “With glasses-free, customers still expect to walk into a room, look at the TV with glasses on and it will be in 3D,” Farr said. “That’s not the case with glasses-free because you have to be in one of the sweet spots. With the 55-inch, 3D was available in 19 sweet spots and that’s still not enough for the average consumer.” The 4K sets contain a quad-core processor to handle the video and a dual-core chip for upconversion, Farr said. The Internet-connected 4K sets will feature 240 Hz panels, 2D/3D conversion, local dimming of LEDs, Audyssey EQ and volume control, four HDMI 1.4 connectors and will be packaged with a wireless keyboard with a touchpad. The new line of standard TVs, which topped out with a CCFL-equipped 65-inch set last year, adds 58-inch ($2,199) and 65-inch ($2,899) Cinema Series 3D TVs. The Cinema Series sets have 240 Hz panels and 1080p resolution to go along with Toshiba’s CQ Engine video processor and a wireless keyboard and illuminated remote control. The CQ processor has been extended across nine LCD TVs this year starting with a non-3D 1080p-capable 32-inch model ($549) that’s part of the L4300 series. Having dropped its last CCFL-equipped set, Toshiba’s entry-level L1350 line of 23- ($249), 29- ($329), 32- ($349), 39-($549) and 50-inch ($899) models starts with an LED-edgelit design. The 23- and 39-inch models contain 1080p resolution and the 120 Hz panels start with the 32-inch screen size. Toshiba’s Cloud TV Internet-capable line starts with the L4300 series of 32- ($549), 39- ($699), 50- ($1,199), and 58-inch ($1,699) LCD TVs that have 120 Hz panels. Toshiba also is fielding four Symbio media box universal disc players that allow for Blu-ray, DVD and CD playback and are priced $129 to $349 with shipments between April and June. Toshiba’s Symbio 3D playback starts with the BDX-5400 ($179), while the top-end BDX6400 ($349) also is 3D-capable and adds 4K upconversion. The Symbio brand has a long history with Toshiba, having first been used on a 160 GB external hard drive that attached to CRT- and DLP-based rear projection TVs to allow users to fast forward or rewind at different speeds (CED May 20/04 p2). Toshiba also is carrying over a single DVD player ($49) and DVD/VCR ($119). In audio, Toshiba is shipping two soundbars in May, both priced at $499, but targeting different TV screen sizes. The Audio Base and Sound Strip each have 300 watts total power, spread across two, 75-watt drivers and 150-watt wireless active subwoofer. The Audio Base is designed for 29-inch to 50-inch sets, while the Sound Strip targets 50-inch and up models. Toshiba’s CE segment is making a strong push this year, emerging as a separate group after two years working within the PC division. Toshiba was a platinum sponsor at the BrandSource meeting and was one of three video vendors to make a separate pitch to HES on Monday. “They made a very aggressive push with our members this year,” Ristow said.