I had an interesting conversation a few evenings ago. A friend of the biz, a manufacturer whom we’ve done various amounts of business with over the years stopped by the shop. He wanted to pick our brains on what direction and what product he should be thinking about making for our market.
We agreed that the market place was shifting to small personal electronic gadgets and that the old days of big black boxes with dials and knobs were numbered. We, too, have been asking ourselves how do we stay relevant in this newly reshaped market space.
Listening to those who have survived recessions of the past a few things were clear. Recessions are a great time to regroup, clean up, clean house, and fire up the old marketing machine. These basic premises were great advice in the past. You do these three basic things and you’ll survive the downturn and be poised to come out of the gate swinging like a champ when the economy picks up. That was recession survival 101. The 201 level course in recession survival was to look for alternatives that could be pursued by re-allocating and shuffling the resources you had. Diversification, great advice for your portfolio, great advice for you business plan. Do this and you could see growth in a down economy.
This time around it’s different. Certainly the magnitude of this economic hiccup is large by any measurement. That means you had better be running your business as best as you can. No stone left unturned when it comes to being efficient. The thinking caps we wear to figure out those new product niches we have to discover and exploit better have a propeller on it to get the extra boost we need. There’s something else going here besides the economy, as I stated earlier, there has been a fundamental shift in the way consumers are thinking about residential electronics. They are no longer product focused. The good old days were about product and their capability. Once we had the product figured out we tried to implement an overlay control system that unified the operation of those products. The new reality focuses far less on the product and more on the content those products can deliver. Now when we discuss AV gear , we talk about what applications and what system REV we’re on. It sounds like we’re discussing our IPhone, not our TV or control system. Streaming media and applications drive the decisions our clients make.
So how do we stay relevant and viable when our profit margins are withering to down to nothing on product you can get anywhere? How can you stay in business with free and five dollar applications?
How much Ipad and Pandora can we embrace and still stay viable? Can the Buy More’s of the world continue to race to give away the profit margins on product and expect to not go under the way Tweeter, The Good Guys, The Wiz, Circuit City, and many others have?
There’s a few simple answers to this that I believe will be our future. I’d like to hear your thoughts before I share mine. I have my plans in order and they are looking to be solid. Let’s see some comments on this. If you’re in this biz you should already have an answer, otherwise you’d better start getting those going out of business signs ready. I’d like to hear from you. I’ll be posting my solutions in a few days.