THE ERT INTERVIEW: Glenn McClelland
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Exertis Unlimited has invested in a new showroom for its audio products. Group commercial director Glenn McClelland gives Sean Hannam an exclusive look and tells him why it’s all about going premium and offering lifestyle speakers and headphones that stand out on the shelves
We like an eclectic mix of brands,” says Glenn McClelland, the group commercial director of consumer electronics distributor Exertis Unlimited.
Looking at the company’s new premium audio showroom in Harlow, Essex, which opened in May this year, you can’t argue with him.
We’re surrounded by a whole raft of weird and wonderful products, from the Jarre AeroBull – a Bluetooth speaker that’s shaped like a bulldog – to rock and roll headphones from Marshall and Meters Music, Star Wars speakers by AC Worldwide, cool Scandinavian lifestyle products from Urbanears and Vifa and the Muso-Qb by British hi-fi brand Naim.
“If retailers come to us, they’ve got lots of different choices – none of them are the same,” says Mr McClelland.
“You don’t want six brands of Bluetooth speakers that all look the same and are all £100. Brands come to us – I get five a week that want to talk to me about distributing their products. We have our criteria for selection – we don’t go for products that are very similar to something we’ve already got, or are already on the market.
Q: Exertis Unlimited (EU) was formed following the acquisition of Computers Unlimited – your previous employer – by the leading IT, home entertainment and communications distributor Exertis in May 2015. What’s happened to EU since then?
Glen McClelland: In those two years, we’ve moved over to Exertis’s IT systems and we’ve moved from Colindale [in London] to Harlow, where we’ve created an audio centre of excellence. Exertis has spent hundreds of thousands of pounds on the building in order to accommodate us. We’re delighted to be part of Exertis from the point of view that they’ve invested heavily in us and in our range of products, our facilities and our showroom. It’s nice to be on the receiving end of a very supportive, investing parent company.
The single biggest benefit of being part of Exertis is that they have access to every channel – we like to take appropriate brands to appropriate channels. Exertis is in every channel, which means we can give the brands the depth and width that they want, or, if they prefer to focus on one channel, that’s not a problem either.
In terms of audio, we’ve centralised everything in Harlow. If you’re a retailer and you want to see 27 brands, you can come to one location – our showroom.
We also do a lot of training for overseas distributors – Harlow is perfect for Stansted Airport, which has become the hub for European flights. Being in Harlow has international benefits for us, as well as national ones.
I do see brands wanting a European approach to distribution. An American or Chinese brand will come to Europe and what they really want is one European distributor – they don’t want eight distributors across Europe. Part of that is because of the challenge of e-commerce. Trying to take a disciplined approach across Europe when you’ve got the internet in every country is very difficult, unless you’ve got one company that can do it. We have a number of brands for which we’re looking at European distribution.
Q: In your role as group commercial director, you’re responsible for two areas – premium audio and own-brand premium accessories…
GM: Yes – I wear two hats and they’re equally important. Since I’ve joined, our audio and own- brand business has got five or six times bigger. Our level of growth is down to a whole bunch of people – not just me.
We’ve started to create attachment sales opportunities for retailers under our own brands, simply because there wasn’t anything out there.
I like distributing other people’s brands, but, where we see a gap, we like to fill it – we don’t like to compete with third-party brands. Flexson is a huge brand for us – it was created for Sonos by Computers Unlimited – the name Flexson means ‘Flexible Solutions for Sonos’.
Q: As well as working with Sonos, you’ve just created an official accessories brand for Bose’s SoundTouch wireless speakers. The SoundXtra range, which we’ve had a sneak preview of, will be out in July…
GM: Yes and we’ve also been approached by numerous other companies who are buying into our designs, our price points and, in particular, our expertise on sell-through. Some of our design is outsourced, but nearly all of it is done in-house. We have access to numerous designers and project managers.
Q: How’s business at the moment?
GM: We finished the year – at the end of March – way, way over-budget and we’re predicting a big increase this year. I see an increasing interest in premium products. I think people are moving away from the low end because there’s not much money in it and there’s intense competition for both brands and retailers.
I see an increasing interest in the premium end – but not the ridiculously priced premium end – and in exclusivity, lifestyle products and unusual products. I think it’s easier for a retailer to sell those because they can differentiate them from any number of other products that all look the same.
I also see a big trend towards attachment sales – these days, if you’re a retailer anywhere in the world and you’re not behind attachment sales, you’re hugely losing out. It’s the same salesman, the same customer and almost the same amount of time it takes to sell the products. Instead of selling one product, sell three – it’s not a huge amount of extra effort for the retailer, but they just need to get behind it. When you’re selling a speaker, why not sell a speaker stand?
Q: Your business has obviously benefited from the resurgence in quality audio…
GM: There’s more music being listened to than ever before because of the smartphone, which is great news. This has meant a huge increase in Bluetooth speakers, streaming, multi-room audio and headphones of all types and shapes and sizes. From an audio point of view, it’s fantastic that more people than ever are listening to it and they’re finding more ways of listening to it.
More generations are understanding the limitations of [low-quality] digital music and a percentage are gravitating towards high-res. That’s why we’ve done well with Astell & Kern [premium portable high-res audio players] – the high-end side of digital music.
The explosion in listening to audio and some demand for the premium end has meant that people want trendy, fashion-led, exclusive and lifestyle-type products. Naim’s Mu-so Qb is a good example – it’s a great product, quite expensive and people like it.
Urbanears does a reasonably expensive Bluetooth speaker that sounds great and is very lifestyle looking. There’s always someone who will say, ‘I can play music on a £30 speaker, why would I pay £400?’, but there’s a lot of people who will pay £400 because they want a thing of beauty in their home. We like to be able to offer retailers a non-competing, compatible range of audio brands. Audio is a fantastic opportunity – it’s the place to be.
Q: What other big trends are you seeing in accessories?
GM: Connected-home products are everywhere. The smart home is still new and it’s accelerating fast – it’s not yet established. There are a lot of brands that have come and gone because it’s not quite happened. I still think we’re very much in the embryonic phase. There’s still an issue with installation – that’s an opportunity for retailers. Increasingly, there’s an interest in bundles of products. If someone can provide three or four connected-home products – lighting, home security and heating – with one installation, that makes a lot of sense for the retailer. When there’s critical mass, it’s worth his while installing lots of products, rather than just turning up and installing one, in terms of cost. We’re dominating the connected-home space – we have a whole bunch of brands and we’re hopefully going to push it across Europe. When we get critical mass and when the installation issue is resolved – installers are visiting homes and installing four or five brands – that’s the Holy Grail. I think that’s when it will take off – until then, it will be patchy. I think it will look very different in five years’ time, but, clearly, it’s the way we’re all heading. We’re right behind it.
Q: Are some retailers missing a trick when it comes to selling accessories?
GM: We see huge regional variations across the world and across retailers.
If you take Scandinavia, there is a 40 per cent attachment rate for putting things on the wall because Scandinavians are very minimalist – they don’t want things on the floor. If you look at the US, it’s more about big homes and speaker stands.
The retailers that use all the attachment sales techniques all the time, with every customer, get huge attachment rates and the ones that play around at it get low rates and lose interest – that’s a big missed profit opportunity. Attachment selling driving demand in-store is as big an issue as attachment products.
We can train retailers exhaustively on attachment sales or on any of our brands at our facility in Harlow – that’s why we’ve invested in it. We’re hoping to get 1,500 visitors a year. In some respects, we’re targeting independents more than the big guys – they need more help. We have in-store field trainers – if you can’t come to us, we’ll come to you – and we do bespoke point-of-sale solutions and window displays. We also put merchandisers in stores for key periods of the year.
We’ll train anybody, anywhere – day or night or weekends. Wherever they want to be trained, we’ll train them.
Q: Voice control is arguably the biggest thing in tech at the moment. Is it an opportunity for independent retailers?
GM: I think it’s a big opportunity. Many of the brands that we have and we talk to show us their product road maps – everyone is looking at voice activation and they’re all pushing for compatibility across brands. It’s the one bit of functionality that everyone tells me they’re working on.
There’s an argument to say that if you’re not engaged with voice-activated products in two years’ time, you’re going to miss the boat. You’d be foolish not to.