2005 PARA Management Conference Delivers Exceptional Week of Networking and Education for Specialty Audio-Video Retailers; Event Marks One-Year Anniversary of PARA Merger with CEA.

ARLINGTON, Va. -- Specialty audio-video retailers from across the United States wrapped up a week of networking and educational sessions at the 2005 PARA Management Conference, held May 11-15 in Coronado, California. The conference, which focused on promoting and growing the specialty audio video retail channel, marked the one-year anniversary of the Professional Audio-Video Retailers Association (PARA) merger with the Consumer Electronics Association (CEA). With a full slate of keynotes and educational sessions that examined the business issues that challenge specialty dealers as well as multiple networking opportunities and one-on-one dealer/manufacturer meetings, the CEA-produced conference also provided a forum for open discussions.

The conference kicked off on Wednesday, May 11, with a PARA Division board meeting and a new member orientation. Thursday morning opened with welcome remarks from CEA's Senior Director of Member Relations Charles Eaton, CEA's PARA Division Chair and Flanner's Audio & Video President John Flanner and CEA's PARA Division Vice Chair and Myer Emco President Gary Yacoubian, who called for attendees to get more involved in PARA division activities and to take advantage of such CEA member benefits as affinity programs and online sales training. Yacoubian also introduced a new CEO-level training program for small businesses that encourages knowledge sharing among participants.

Keynoter Dr. Richard D'Aveni, professor, Amos Tuck School of Business at Dartmouth University, in a thought provoking address asked attendees: "How will you win in a disruptive environment when current business models disappear?" He said the core principle of a sustainable competitive advantage, once the Holy Grail of business, is no longer a viable reality. The session was designed to alert attendees to shake up their business strategy.

D'Aveni identified three trends that will impact A/V businesses: falling entry barriers, escalating competition and aggressive disruption from innovative companies or technologies.

"Video installation is a form of crack that you easily could get addicted to," he cautioned. "What happens when it becomes mass market? Right now you can charge a premium for expertise - but with plug-and-play, technology replaces the value-add of expertise."

He outlined several possible coming scenarios that would change the competitive landscape and said, "The bottom line is tremendous opportunities will be created if you harness the changes in the consumption chain that your customers will go through and add value for them."

Microsoft's Director of Marketing for the Windows Consumer Group Bill Mannion spoke about digital entertainment and Microsoft's vision of its digital media center powering the hub of the digital home. He explained that with the proliferation of stand-alone products, customers are seeking solutions to connect the devices together and enable the distribution of content anywhere.

"I see unprecedented opportunity to provide solutions for your customers," said Mannion.

The final morning session "Show me the Money!" led by moderator Noah Herschman looked at how retailers can profit from the upward rise in consumers' desire for the connected home. Panelists agreed that as tight margins make it critical to sell more profitable merchandise and keep costs as low as possible, it was also crucial to properly train and differentiate installers.

Crestron Electronics National Sales Manager Bill Schafer said, "You can't make money when a product will be a commodity within six months. The reality is the retail space is tough because the Wal-Mart factor has changed the world."

The group addressed competition from other big box retailers, in particular, Best Buy's Geek Squad that began a year ago and today numbers 7,000 installers. "The point is to get the Trojan horse in to customer's living rooms and then sell them razor blades. We need to create a beach head that is difficult for Best Buy to attack. It's important to allow an affordable entry point so you can service all of your customers," said Tweeter's Dave Tovissi.

The well-attended afternoon breakout sessions covered a diverse array of industry topics including: inventory management; what women want; a CEA market research presentation on understanding why consumers shop at specialty stores; how to create a high performance sales team; eBay solutions for retailers; and PR101 on leveraging free media. The day concluded with a cocktail reception and a clambake with a view of the sunset over the Pacific.

CEA's market research presentation on Thursday afternoon, "Understanding Why Consumers Shop at Specialty, High-End Electronics Stores," explored consumers' perceptions of specialty, high-end electronics retailers and identified target markets for those stores. The research covered how to focus on the right market segments, as well as how to target your market with the appropriate communications vehicles.

Friday's programming began with a keynote from Intel's Director of Marketing for the Digital Home Group Bill Leszinske who spoke about an important shift that has occurred - consumers want to access their digital content at any time, anywhere, including moving content around the digital home. He said, "Interoperability and standards will help fuel the digital home." He also spoke about Intel's work with Microsoft's Media Center PC and how this partnership can help retailers increase their sales. "With convergence there is a new opportunity to sell more goods in to your customer base and also to find new customers," Leszinske observed.

Next, an executive panel "Where is Audio Going?" led by moderator David Stollmack provided actionable information for dealers. The panelists looked at ways that retailers can improve lagging audio sales in stores. Each panelist was asked why they got into the audio business initially and all expressed a common theme: a passion for audio. They also talked about the success of the iPod. Myer Emco's Yacoubian said his stores began offering unsolicited audio demos two years ago and now they are up 50 percent. Because of the demos, audio sales increased 10 percent in 2004, growing only slightly slower than video sales. He said, "It's important to involve the whole family in the demo including the kids."

George Liu, founder and president of Audio Visions South, agreed: "We need to display, merchandize and show audio to everyone who comes in the store. Give them a taste of the demo for 30 seconds. If it's good and powerful, audio-video sales will climb." Denon Electronics President Stephen Baker added, "It's important to accommodate what the customer wants to hear. The test drive of the equipment should include whatever music the customer is most comfortable with."

Technology consultant Michael Heiss gave a dynamic presentation on the technologies that are driving the specialty business. In a comprehensive review, he looked at the various trends and technologies that are changing the market to get an idea of how they will evolve in the next 12- to- 24 months. He said, "A key message is that hi-def and games are going to merge in the next cycle." He added as a cautionary tale, "Whether you are into networking or installation, you better be in both because all of the products will talk to each other. And you had better know what you selling to your customers because compatibility is not ensured."

The final day of the conference focused on the specialty retail sales associate and included presentations of new CEA market research, a dealer panel discussion and keynote presented by Jackie Freiberg, an expert in organizational structure and success. The CEA study, "Motivating Specialty Retail Sales Associates," was conducted in order to learn what sales associates enjoy most about their jobs, as well as things they would like to change. The research was based on personal interviews that yielded information on motivating factors, challenges faced and retention issues. The full detailed analysis for both studies presented at the PARA conference is available on-line at www.ce.org.

According to Freiberg's presentation, retail employees thrive in an environment that engages their talents and passions. They will succeed in a culture that challenges them on both a personal and professional level.

The dealer panel, "The Making of a Great Sales Associate," was moderated by Jason Knott of CE Pro Magazine and provided a firsthand look into the challenges faced by five dealers of varying sizes across the country. Among the issues faced by all were recruiting women to their sales forces and providing consistent, comprehensive training to sales associates throughout the entire employment lifecycle.

PARA Division Chair John Flanner wrapped up the conference sessions by thanking attendees for coming to the conference and CEA for producing a top-notch event. He expressed hope that the number of dealer attendees will continue to grow at future events and praised the conference for its valuable educational programming and successful dealer meetings. "I hope you heard some things that sparked a new idea and some things that made you feel uncomfortable. The collective wisdom we all bring makes the A/V industry stronger and richer," Flanner said to the crowd.

The 2005 PARA Management Conference concluded with a dinner honoring the winners of the 2005 Demmy Awards. The Demmy Awards recognize recordings that provide exceptional material for audio demonstration, a key issue in the specialty audio/video community. The 2005 Demmy winners are:

--  Best CD Track:

    "Narrow Daylight"--Diana Krall, The Girl in the Other Room (Verve)

--  Best Hi-Resolution 2-Channel Track:

    "Piano Trio in G-Minor: Scherzo; Intermezzo: Moderato con
    Allegro"--The Florestan Trio, French Piano Trios (Hyperion)

--  Best Hi-Resolution Multi-Channel Track:

    "Mosaic"--Laurence Juber, Guitar Noir (AIX)

--  Best Segment of a DVD as a Movie:

    "Chapter 14: The Gunfight Begins"--Production Sound: Geln
    Gauthier/Music: Michael Kamen, Open Range (Buena Vista Home Video)

--  Best Segment of a DVD as a Music Video or Concert:

    "Narrow Daylight"--Diana Krall, Live at the Montreal Jazz Festival
    (Universal Home Video)

The 2006 PARA Management Conference will be held May 3-7, in Hilton Head, South Carolina.

About CEA:

The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 2,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA's members account for more than $121 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES - Defining Tomorrow's Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

UPCOMING EVENTS

--  Consumer Electronics CEO Summit
    June 22-25, 2005, Colorado Springs, CO

--  SINOCES
    July 1-4, 2005, Qingdao, China

--  CEA Summer Technology & Standards Forum
    July 25-29, 2005, Denver, CO

--  CEA Industry Forum
    October 17-19, 2005, Las Vegas, NV

--  EHX Fall
    November 7-11, 2005, Anaheim, CA

--  2006 International CES - Defining Tomorrow's Technology
    January 5-8, 2006, Las Vegas, NV