Far from providing the industry with a boost, convergence in the digital entertainment space is forcing many consumer electronics retailers to the wall, according to managing director of Pacific HiFi, Frank DiBartolo.
The last 12 months have seen sales crash, and once-profitable CE retailers like OMC, Miranda HiFi and Home Zone have all shut up shop. Franchisees are also feeling the heat, with several branches of Sydney HiFi and Betta Electrical also closing their doors.
"We are being loaded up with boxes that are far more complex than out clients need or want," DiBartolo said. "The manufacturers are catering to the technophiles and elite users; they are miles ahead of the market, and they're not putting any marketing effort into explaining what the technology actually does."
Vendors like Intel, Microsoft and Toshiba are upbeat about retailer opportunities emerging from digital entertainment convergence. But DiBartolo claimed neither the channel nor the manufacturers were responding to the structural changes necessary to market the new technology.
"The manufacturers just keep producing new technology without putting in the marketing it requires," he said. "In the channel we've been giving away our time; and we're not passing on those costs to the consumers.
"We now need to maintain highly qualified staff on the shop floor, but still people expect to walk through the doors and get free information."
If this trend continues, DiBartolo predicts the mid-sector of the market will be squeezed, leaving only mass merchants on one hand and high-end specialist installers on the other.
Moving strategically to rescue his own business, he is about to launch a team of specialist installers to enable customers to make the most out of emerging technologies.
"There's an enormous shortage of people who can make digital entertainment technology work for the consumer," DiBartolo said. "In most cases they don't even know what's out there let alone how to install it.
"I'm not sure how to go about solving the problem overall, but I hope I can at least keep my own head above water."