COVID-19 a 'Wake-Up Call' for Future Crises, Says New ProSource Chairman

ProSource is entering 2022 facing a series of challenges with a new chairman who has weathered the industry’s most difficult trials of the past. “Every serious business crisis that I’ve faced in my career has been different,” Walt Stinson, CEO of Denver-based ListenUp, told Consumer Electronics Daily after his election to a two-year term. “I’ve gotten better at managing crisis, but each crisis requires a great deal of adaptability and there are a lot of uncertainties,” he said.

ListenUp, celebrating its golden anniversary this year, had a few months of uncertainty when COVID-19 broke out in March 2020. “We suffered some shocks initially when there were some lockdowns and we couldn’t open our doors,” Stinson said, but like many in the custom AV business, it benefited from cocooning trends that led customers to build or update home theaters and home offices and to expand into outdoor entertainment spaces. ListenUp, like many ProSource integrators, thrived across its custom, e-commerce and retail businesses.

Nearly two years later, Stinson doesn’t believe consumers are tapped out -- he sees customers continuing to spend on home technology at an “elevated level" -- but he cautions about the future. One of Stinson's objectives is to help integrators manage the risks of uncertainty. “You can say it’s the best of times and the worst of times,” he said: “We can’t expect this kind of hyper demand to continue forever, and we need to prepare for an adjustment.”

Stinson cites recent history as teaching periods, recalling 2000 and 2008 when many retailers and integrators became “overleveraged” during periods of economic shock. “It’s important to be humble and not to assume that all of a sudden you got smart … and that’s why your business is doing well.” In truth, he said, “consumers’ aspirations have changed” since COVID-19, he said. Some of that is “semi-permanent,” he said: “You have to be prepared and adaptable, and it’s really important to have a strong balance sheet. That’s what we’re stressing to our members.”

COVID-19 is just the “tip of the iceberg” of adaptations companies will have to make in the near future to address the impact of global crises, Stinson said. “For me, personally, COVID is a bit of a wake-up call,” he said, “because it’s an exponentially growing threat, and we don’t really know where it’s going to take us.” COVID isn’t the first and “won’t be the last” threat to global business, Stinson said.

Some threats are “human-caused and they can be human-solved but not unless we cooperate with each other," Stinson said. "We’re all interconnected and need to work together to address these things.” One such threat is climate change, a global issue affecting all industries, he noted. “In our business we tend to take a short view,” he said broadly, saying that has to change.

“The big question” looming over large companies and the technology industry is “how are we going to adapt to the mandates of the Anthropocene Epoch,” Stinson said, referencing the impact of human and social activities on natural ecosystems. Large corporations and financial institutions have begun efforts to address the impact of human activities on nature that’s going to be affecting business over the next couple of decades, he said, citing tech companies like Samsung and Sony.

ProSource is just beginning to have discussions on sustainability, an area of leadership Stinson wants to bring to the organization, tapping into his training in organizational development and risk management. Governments are likely to impose carbon caps on industry and tax carbon emissions, he said, which will cause incentives to change behavior in packaging, transportation and distribution. “ProSource and our industry partners need to work together to try to find the best solutions to those issues,” he said.

Costs being discussed for carbon taxes “could be quite significant,” Stinson said. They will result in “head-scratching about how do we deal with this,” he said. Discussions are early stage, but sustainability costs are going to become a bigger issue, he said. If sustainability is an “exponentially developing problem like COVID, then it could come on us pretty fast.”

With the U.N.'s Sustainable Development Goals so widely adopted, “we should expect some of that to begin to express itself in the marketplace.” ProSource, he said, is a big enough organization “to have something to say about that,” and he expects manufacturers “of any significant size” are “concerned and making contingency plans.”

Stinson compared climate change with COVID-19, “a shock that the industry had to adapt to," saying, “Fortunately, in our industry it’s been a positive. That hasn’t been the case for everybody, and we shouldn’t expect that the next shock that comes is going to be a positive one.”

Responding to our question on increased competition from service providers such as Comcast and retailers including Best Buy that are expanding their efforts in the smart home, Stinson downplayed the impact on ProSource members: “Our members focus on customization, and those companies focus on standardization,” he said, saying large companies have to take a “cookie-cutter” approach to system installation based on low price and high efficiency to reach volume.

That dynamic isn’t new to Stinson, who has had to differentiate his specialty business from low-ball competitors since the Professional Audio Video Retail Association addressed the issue in the 1980s. “I’ve seen these things happen, and it’s best not to focus on them but just focus on your own business and make your own business better.”

Stinson noted initiatives ProSource is developing to help dealers stand apart from larger competitors, including closer relationships with vendor partners, price programs that are competitive with mass merchandisers, and education programs. He cited the three-day, on-site ProSource Academy training event for installers, ProSource University and the lighting initiative via the Lighting Technology and Learning Center in Dallas (see 2103010035). Dealers also have access to marketplaces through ProSource, plus in-person summits and town halls.

Helping dealers organize their business more effectively is a goal of Stinson’s in his chairman role. Business management has been an area of concern during the COVID-19 era when integration companies have been focused on keeping up with the surge in projects. Education on how to have the right people in the right roles, knowing capital requirements and understanding balance sheets are all key to members’ success, he said. "There’s a lot to be done to bring our channel up to its full potential, and I’m excited about that," he said.

In a Monday update, Stinson told us ListenUp's Boulder, Colorado, store was not threatened by the Marshall Fire that ravaged parts of Boulder County, Thursday and Friday. The store was pre-emptively closed on Saturday out of concern for employees. One retired store manager was evacuated and his home was saved; no employees lost homes, Stinson said. ListenUp estimates over 100 homes were lost by past customers. "We are all in shock over the scale and devastation of the Marshall fire," he said: "The videos and photos don't do justice to the devastation. We are thankful that none of our employees lost their homes and our hearts go out to the thousands that lost everything as this powerful fire swept away entire neighborhoods."