InfoComm International, the trade association representing the commercial audiovisual industry worldwide, has released the 2016 Global Pro-AV Distribution Channel and Trends Report.
This new report explores the ways pro-AV products and services move through the market - from manufacturer to end-user organization - and identifies factors that influence the various channels. It also includes market forecasts through 2017.
InfoComm engaged Lewis Research to conduct the report, which involved a primary survey, in-depth interviews, secondary data sources and past InfoComm research, to uncover key trends that impact the stakeholders throughout the pro-AV channel.
The 2016 Global Pro-AV Distribution Channel and Trends Report analyzes the overall distribution and channel trends, including the growing role of distributors, how services differentiate integrators, consumer products as components of commercial offerings and the proliferation of hybrid models. Furthermore, the report provides a global perspective in five key regions of the world:Asia-Pacific, Europe, Middle East and Africa, Latin America and North America. Lastly, the study examines how 14 different product categories, from control systems to software, move through the channel.
"Like other healthy industries, the AV industry is continuously evolving, and we must pause and take stock of where we are and what lies ahead," said James Chu, Director of Market Research, InfoComm International. "By understanding how and why products and services move through different channels, pro-AV organizations can make better business decisions. This report will equip AV pros and end users with the intel needed to develop relationship strategies with channel partners at different levels."
Among the highlights from the 2016 Global Pro-AV Distribution Channel and Trends Report:
Global Outlook of AV Market
On a macro level, the global AV market is poised to grow 14 percent from 2016 to 2017. North America, Latin America and Europe are expected to grow at low double digits. Asia-Pacific is likely to grow at 18 percent, with stronger-than-expected results from China and India. Finally, although the Middle East and Africa comprise just 4 percent of the AV global market, 2017 should be another strong year for the region, growing at 17 percent.
The Proliferation of Hybrid Distribution
The way pro-AV manufacturers sell products through the channel can be characterized by three distinct tiers:
- Tier 0: Manufacturers sell directly to end users without the use of intermediaries.
- Tier 1: Manufacturers sell to resellers, integrators or distributors, which then sell to end users. In most cases, the resellers, integrators or distributors are bundling services with products as a value-add to the final sale.
- Tier 2: In this multichannel approach, manufacturers sell to distributors or resellers. The products are then sold one or more times through the channel, most typically to integrators, before being purchased by end users. Distributors assist manufacturers in selling to systems integrators and other resellers, providing warehousing and inventory services so that fulfillment is handled by the distributor.
Manufacturers in the pro-AV market employ more than one distribution model. Some of them do so to provide a product globally on an everyday basis. It is also important to note that distribution doesn't vary by vertical market. Instead, it is based on the product and the client's demands.
Evolving Role of Distributors
Distributors are expected to continue to combine product distribution activities with high-value services, such as technical training and sales support for both pre- and post-selling opportunities. This comes from a need for distributors to add value in the distribution chain to help increase margins.
Services Differentiate Integrators
Although distributors and integrators already offer some common services, one area where integrators could have success is content creation. Integrators that sell content-creation services have had success in the digital signage market, where the expectation is for a complete solution, not just hardware and software components.
Consumer Products as Components of Commercial Offerings
Product commoditization, if managed well, can be beneficial to the pro-AV market. Commoditization leads to lower product prices, but it also makes it possible for end users to switch from consumer AV products to pro-AV solutions, if they have gone the former route. Of the end users surveyed for this research, most indicated that they would rather purchase a commercial solution over a consumer product if the two respective prices are comparable. Essentially, product commoditization means reducing margin, but also increasing scale for the pro-AV industry.
Product Distribution Trends
Displays (16 percent) and cables, connectors and adaptors (15 percent) have the highest distribution through Tier 0. Control systems have one of the lowest distributions through Tier 0 at just 2 percent with the remaining distributed evenly through Tier 1 and Tier 2. The screen and shades product line has the highest distribution through Tier 2 at 55 percent and just 7 percent through Tier 0.