New Players Widen the Field of Distribution
Distributors that cater to vertical markets unrelated to security are now surfacing in the industry, offering products that systems integrators can present to their clientele. Spurred on by convergence, traditional distributors are expanding their base as well.
Once the domain of a corps of low-voltage specialists, the security distribution landscape is being altered as nontraditional companies penetrate the market to target new revenue streams and buyers for their products.
These wholesale distribution alternatives are competing with long-established distributors for integrator/installer business as well as attempting to serve other trades that delve into security, such as electricians, IT specialists and custom home installers. The marketplace expansion is, in part, fueled by two evident trends: increased consumer expectations and buying habits, and the advancements and significant shifts in technology.
The latter development specifically relates to the convergence of traditional security disciplines with logistical systems for more complete, integrated commercial and residential solutions.
Among the new and promising vertical markets opening up to the security integrator/installer are high-end entertainment products; home automation; heating, ventilating and air conditioning (HVAC); and IP-based networking.
Significantly, low-voltage expertise is just one facet of the security practitioner experience that is proving to be a vital link in reaching these burgeoning vertical markets. Security integrators/installers are often ideally positioned to influence existing clientele. Having established the skill to deliver products and services, many integrator/installers are finding that the pursuit of add-on sales to existing accounts can be a straightforward progression of their business practices.
As these new market opportunities emerge, traditional distributors are also moving to assimilate these same types of verticals into their core group of product offerings. Many have or will soon include home entertainment, home automation and IT-based products, such as IP cameras and network-based monitoring options.
Driven by Convergence, a Premium Is Placed on Increased Training
Convergence is to a great extent propelling security distribution in new directions beyond such underpinnings as intrusion, CCTV, access control and fire/life safety.
“The market through convergence is driving this, and we are excited about the new technologies and channels of business we see evolving,” says Randy Hall, president of The Systems Depot of Hickory, N.C., which stocks security, fire/life-safety, CCTV, access control and other low-voltage products. “We are getting into more high-tech products, and we love it because it’s like a whole new world out there.”
As an illustration of technology and convergence in motion, intrusion is being integrated with access control, access control with video, video with life safety, home control with video, and so on. It is largely this convergence trend that has provided the opportunity for both traditional and nontraditional security distributors to seek new business partners.
The growing prospect for security dealers and integrators to sell these new products means that many have to learn how to install and service IT-based products. Even drafting a proposal entails familiarity with sophisticated IP-based technologies, components and peripherals required for the job.
“Today we’re putting video signals on the Internet as well as alarm signals. We’re also sending voices over IP-type networks,” says Steve Roth, CEO of Tri-Ed of Woodbury, N.Y., an independent distributor of security, low-voltage and home automation products.
Traditional security and alarm dealers are adapting to this evolving environment with the help of distributors that can educate them while providing the necessary in-house expertise to aid in design and ordering products for a project.
“As we move more toward convergence, our objective is to thoroughly train our own people as quickly as possible as well as our customers,” says Roth. “We have worked out a training program with our vendors to provide our customers with the training necessary to bring them up to the level that our vendors claim they need to move into this next level of business.”
Other traditional distributors like The Systems Depot and Melville, N.Y.-based ADI are providing educational tools for security dealers to navigate their way through the brave new world of high-tech, networked security. “There is no way that a single company can do this alone,” says Randy Teague, ADI’s vice president of marketing. “In the end, whether ADI or all of our competitors are providing an important service like this, it benefits us all — dealers, manufacturers and distributors.”
Distribution Newcomers Target Skill Sets of Integrators/Installers
A chief incentive for nontraditional companies to enter the realm of security distribution is, of course, the opportunity to expand their own product offerings. In the process, these new players are helping their existing dealer customer base do the same.
“Obviously, everyone is interested in improving their bottom line, and we’re serving the needs of our contractors in the process,” says Paul Koebbe, national market manager, security with Graybar Electric of St. Louis, a distributor of communications and electrical products and related supply-chain management and logistics services. “More than 50 percent of our contractor clientele say they do security at some time during the year. We want them to be successful, and we want to keep them coming back to Graybar as a valued customer. The only way to do that is to offer them what they tell us they need.”
Some of these newcomers are squarely targeting security dealers in their crosshairs. They realize that established dealers with a track record of expertise in low-voltage installations are uniquely positioned to offer add-on sales to their own existing customers.
“We are specifically looking to attract the traditional alarm installer, as well as IT professionals and other low-voltage wiring guys,” says Sal Visone, president of Digital Watchguard of Merrick, N.Y., a distributor of video security products. “We also deal with a lot of home security installers and those that work with high-end entertainment.”
Visone says high-end entertainment installers may not tout security as a main forte, but Digital Watchguard is there to help them when that occasional security job materializes.
AVAD LLC, a distributor of custom home electronics based in Van Nuys, Calif., has also identified security dealers for expansion because of their reputable ability to deliver products and services.
“We do business with everyone from a small audio/video dealer that does custom homes one at a time, all the way up to security dealers who have 40-plus trucks and multiple branches,” says Bob Gartland, president of AVAD. “We have 37 locations, complete with showrooms and inventory that provides the kind of will-call convenience that a lot of security dealers are comfortable with.”
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