After 'Insane Demand' in 2021, ProSource VP 'Cautiously Optimistic' for 2022
LAS VEGAS -- ProSource volume grew 24% year on year in 2021, and volume rebate transactions were up 51%, said Vice President-Business Development Andy Orozco, opening the group’s spring Summit Sunday. The growth in volume rebate dollars “means we're growing our business with our vendor partners," he said.
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After two years of “insane demand” for luxury goods that led to record sales in 2021, Orozco is “cautiously optimistic” for 2022. He cited recent indicators from Wells Fargo economist Sarah House that included lingering questions about COVID-19, a "tough labor market" and inflation. Consumer savings remain healthy, but demand is expected to moderate later in the year, he said.
Retail demand slowed late in 2021, Orozco said. Spending is likely to shift back to services, he said: “That doesn’t mean that goods are going to fall off the cliff because there’s still the supply chain issue, and manufacturers are still trying to catch up." Spending on travel is likely to increase this year, he said.
Supply chains are improving, though “not near what they used to be,” Orozco said. Vendors have been working hard to manage the supply chain, he said. CI dealers are rethinking the just in time business model and putting a lot of energy into managing project schedules, he said. He noted the theme of the event is “Own It."
Homebuilding is being held back by supply chain shortages, compounded by the labor shortage, Orozco said, and that pushed out project timelines. Housing units were up by a 1.6 million pace last year, and that’s expected to continue for the next two years, he said.
ProSource added 30 dealer members in 2021 and passed the 600-member level, Orozco said. The group plans to continue growth at a “gradual pace,” he said. It elevated nine members from the CI to Power level, he said, saying it’s important to have growth from within. Orozco highlighted ProSource’s 98% member retention rate. Some 165 dealers have been with the group five years or more, 122 for at least 10 years, and 84 members for 15- and 20 years or more, he said.
Orozco listed a suite of tools the board voted to invest in to address “pain points” for dealers, including “finding talent”; ProSource University, which includes the Dallas lighting technology education center; and ProSource Academy. It plans to return to town hall meetings in the fall, Orozco said.
Demand for labor was already an issue for the custom and retail channels before COVID-19 and is “still strong,” Orozco noted. Sherry Dantonio, senior director-education and member recruitment, updated ProSource’s efforts to address the labor shortage through an education program, an initiative it began just as the pandemic hit in 2019. She noted the group had to pivot to online training when “everything that we had known in the industry was all in-person training.”
ProSource launched the education program in May 2019 with 16 courses. Classes also included the CEDIA course catalog. Some 88% of members are using the free education benefit, she said, and there are over 3,000 active users. Course count is now over 750, Dantonio said, and members have saved over $150,000 by being able to access the CEDIA courses via ProSource, she said.
ProSource CEO David Workman is working to get back to a full-time schedule, the executive said in a prerecorded video. Workman, who suffered a stroke in the fall, said his recovery has "taken a little longer than I was anticipating,” but he plans to be at group events later this year.