Where Security Dealers Can Find Opportunity Amid Stiff Headwinds
Bob Appleby, V.P. and G.M. for ADI North America, joins the conversation to help make sense of supply chain challenges and much more.
Enduring impacts of the COVID-19 pandemic, supply chain bottlenecks and other factors continue to fuel considerable headwinds for installing security contractors. Bob Appleby, vice president and general manager for ADI North America, joins the conversation to help make sense of it all and pinpoint opportunities.
What product categories emerged during the pandemic that you expect will become mainstays?
Although building closures and construction slowdowns had effects on the market, new opportunities became available around thermal imaging products, contactless access control, intrusion and analytics. And now with fewer projects on hold, construction beginning again and schools open, there continues to be a significant opportunity for dealers going forward around these categories.
In the residential market, as more people were staying home, they began making more investments in their homes which led to increased opportunities across residential A/V, networking, intrusion and smart home products. More consumers have set up home offices, resulting in a rise in home networking upgrades and conferencing technologies, and more people entertaining at home and investing in whole house audio, residential video and outdoor entertainment categories.
We believe the investments people are making in their homes will continue, leading to more opportunities. Additionally, as hybrid learning and working models are more widespread, being able to supply the technologies that help bridge and enhance this experience will be key for security dealers.
What are ADI’s internal projections on how long the current supply chain disruptions will continue?
We are expecting these supply chain disruptions and uncertainties to remain well into 2022, and we’ll continue to take every step possible to try and lessen the impact for our customers.
Communication across the supply chain remains key to responding fast and efficiently to any situation. Our demand planning team collaborates regularly with both our suppliers and integrators to quickly identify any potential shortages and monitor inventory levels. We conduct an integrated business planning process with suppliers to understand their current inventory, secondary and tertiary component sourcing, and levels of production so that we can respond with additional safety stock or order expedites where appropriate.
Additionally, we’re staying closely engaged with our carriers to mitigate the potential for container availability challenges and port congestion.
ADI carries products from more than 700 suppliers, giving customers a wide array of choices and alternative options. We’ve been working closely with our customers to forecast their needs and are encouraging them to order now and stock up. This will help ensure they have the products they need, and may minimize any additional price increases from inflation. Additionally, on larger projects we encourage our customers to get the ADI team involved as early as possible, so we can help them secure all that is needed for the specific project.
Beyond core product categories, what technology do you view as having a huge upside?
In addition to our core security and life-safety markets, we identified categories where we see growth opportunities for ADI and our customers in residential A/V, professional A/V and data communications. And we’re expanding our offerings in these spaces both organically, and by pursuing M&A activities, to build upon our presence and help our customers capitalize on these growing markets.
Since 2020, we’ve made four acquisitions including Herman Pro A/V and Shoreview Distribution in pro A/V, and Norfolk Wire & Electronics and most recently Arrow Wire & Cable in data communications. These acquisitions create numerous cross-selling opportunities for our customers, and we’re helping them take advantage of them.
What do you view as the most significant challenges that wholesale security distributors are currently facing?
As previously mentioned, we’ll continue to endure shortages, supply chain restraints and logistics slowdowns, and we must remain in constant communication to address situations as they arise to try and mitigate the overall impact. As an industry, I think some of the other challenges we’ll continue to endure include inflation and economic woes, COVID-related concerns, labor shortages and recruiting and/or retaining talent.
I think the most important investment any company can make is in its people, and this will help with recruiting and retaining talent. At ADI, our employees are our most valuable asset and key to our success. And we continue to invest in our teams with training, tools and resources to help them successfully do their jobs. In 2021, we added 135+ new team members globally — and we’re still growing. We’ve been equipping our teams with more digital tools to help improve sales effectiveness.
We implemented a software platform to automate the sales order process that speeds up order times for customers and creates more bandwidth for our team. We also implemented business intelligence tools that give our sales team real-time access to a variety of customer data, and machine learning technology that tracks and highlights buying patterns. This data allows our team to be more helpful in meeting the needs of our customers.
Have you seen new vendors and new technology-led products coming online so far this year or have the supply chain issues stunted new products and technology coming to market?
Even with current supply chain issues, we continue to add new suppliers and new products to our portfolio. In 2021, we added more than 75 new manufacturers and many new products to our lineup.
We recently hosted our annual Supplier Partner Symposium “virtually” this year where we had a tough choice selecting the new product of the year — which is a good thing. Some of the nominees included products from 2GIG, Bose, HID, Resideo and YourSiX — and they are all great products. After a careful review with our sales and marketing teams, we ultimately selected HID for their Signo readers as the ADI New product of the year for 2021.
Our customers rely on ADI to keep them up to date on the latest products and technologies, and we regularly host trainings and counter days in our branches and have ramped up our webinar training over the past few years. Moving to a more interactive platform for these sessions, we were able to host more than 20 webinars in 2021 and trained security dealers across a wide array of topics. The feedback has been positive among attendees and we will continue this series through 2022. Additionally, we launched our on-demand training platform, ADI Academy, which gives customers the opportunity to participate in product and industry training anytime, anywhere.
What is new with ADI that you would like to highlight in particular to the security dealer/integrator channel?
ADI continues to make significant investments in our digital footprint and online shopping experience. We launched a series of upgrades to our Digital Branch, released a new mobile app and introduced many new features like buy online pick up in store, quote-to-order and artificial intelligence [AI]-based suggested selling. These updates are delivering significant impact and enhancing the online shopping experience for customers as our ecommerce revenue was up 47% in 2021. Whether shopping in one of our branches, online or on the ADI app, customers can expect the same shopping experience.
In addition to products, ADI is focused on adding new services to help our customers discover new revenue streams and operate more efficiently. Some of our new services offerings include Cybersecurity Tools, Capture Remote Monitoring and D-Tools Ordering Integration.
Is there anything else you see as being of impact or high interest to the marketplace?
In addition to our investments to our online Digital Branch we continue to expand our physical locations to better serve security and A/V customers. In 2021, we grew our geographic footprint with eight new branches and distribution centers and we’ve already opened our first new facility this year in Fort Lauderdale.
This is our second location in the Fort Lauderdale area and includes a branch along with a regional ship center to serve South Florida. As part of our strategy, we regularly conduct a market analysis of our locations, customer locations, market demographics and travel times to ADI branches. And then we use this data to identify the markets where we want to expand our branch network.
As a final note, I’ll conclude by sharing that ADI is committed to being the indispensable partner of choice for our customers, suppliers and team members — and you can expect to see a lot more from us in 2022.
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