Demand planning for growth in the pro AV, digital signage, and physical security markets

The pro AV, digital signage, and physical security markets saw big changes in 2020. So what’s in store for 2021? With so many verticals in those larger categories, there are several areas that will show both growth and increased opportunity for solution providers. As we look toward 2021, here are a few of the top technology needs the VISUALSolv market experts at SYNNEX are preparing for.

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Unlock potential growth in the transforming rental and staging market.

Over the past 10 years, the live events AV market enjoyed booming growth. According to AVIXA research, this market represented $26.7B of the total $247B AV market worldwide. Then along came 2020 and market disruptions that impacted live events in every industry. And though this drop off was sudden, the AV market is known for recovering quickly. To position your company for the next growth phase – which is coming sooner than you think – you need to understand the top trends and market dynamics of AV for live events, or the AV rental and staging market.

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New video, audio, and staging tools have raised the bar for congregations in recent years. Add in the urgency for new and improved live streaming, and the house of worship market is poised to grow even further.

For many AV integrators, the house of worship market has been a key vertical for decades. With over 350,000 congregations nationwide, there’s no limit to the potential for pro AV system upgrades. This market traditionally has many facets: AV system design and installation, acoustic design and analysis, IT system integration, user training, service and support, equipment rentals, and show and event services. 2020 brought the immediate need for live streaming, something many churches were already doing.

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Finding new markets is important in any economic landscape. That will never change, despite the macro- and micro-economic conditions of the day and the ups and downs of business cycles. But even in less volatile years, finding new market opportunities is never straightforward. It not only requires mining opportunities on new horizons, but also in your current customer base.

So, how do integrators – working with a top distributor like SYNNEX – take advantage of a non-obvious market opportunity? Three things are key: addressing the new markets that have emerged, helping current customers with changing needs in traditional verticals, and offering bundled solutions that help with both goals. Here are a few prominent new market opportunities to be aware of.

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Take advantage of burgeoning demand for solutions in every vertical that address a combination of access, security, health, and safety needs.

Demand for building access solutions had been growing and evolving prior to 2020, but access solutions were typically more siloed than what organizations need now.
Facility access was the realm of more standalone building security technologies, and it didn’t often dovetail with other needs.

For retail spaces, concerns revolved around staff entry and access as well as shoplifting and physical concerns such as fire safety and building capacity. For the enterprise space, initial building entry concerns dominated. And in schools, access control was typically more after-the-fact than entry-focused, with emergency notification often more important that initial entry, usage, or occupancy issues.

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As physical security needs have evolved in every vertical, new-generation video solutions are unlocking new market opportunities.

This year, many business and facility closures combined with new health/safety needs for back to work have fast-tracked many physical security needs. The urgent need for physical security solutions to protect empty or near-empty buildings soon led to retail, corporate, educational, and government customers needing to upgrade all their digital systems.

Key to those upgrades? Video and surveillance tools that raise the bar for organizations, because “good enough” video is no longer acceptable. The new table stakes are more reliable, better resolution and video content that users can more easily archive and analyze. And the keys to market growth going forward are video tools that multi-task to meet multiple security, safety, and other demands.

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The physical security market has been on the rise for over a decade, and early this year, analysts said it would likely increase at a CAGR of 10.5% in the 2020-2025 timeframe. So how will the 2020 market disruptions affect this multi-year growth?

Demand for all security products will increase. In addition, there will be sharply increased demand for new solution categories. Topping that list of new categories? The market where building access meets health and safety as back-to-work pressures create unprecedented demand for new security/health pre-screening products and services. The clear trend overall: more growth opportunity for security solutions.

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There Have Never Been More Options, for Every Customer Need

Regardless of which AV vertical market you’re in, there has never been such a renaissance of displays and display peripherals as there is today. And if you thought that providing displays had turned into a commoditized activity with fewer growth/profitability prospects, you probably haven’t been paying attention to new technologies and features that offer entirely new flat panel solutions for AV, IT, digital signage, and control room challenges.

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Understanding the vertical market demand, choosing the right go-to-market strategy, and partnering with the right technology solutions provider can unlock huge growth opportunities.

One of the hottest market segments in the AV world over the past 10 years has been Digital Signage. It experienced huge growth in airports, corporate and university building lobbies, retail malls and stores, restaurants, sports arenas, and more. Even in the 2020 market disruptions, new and creative Digital Signage solutions began emerging to deal with the heightened need for better large-screen digital messaging in public spaces. And more importantly, the technology is now poised to play a leading role in back-to-work and back-to-school.

It’s important to recognize that the market dynamics of Digital Signage are different from those of other AV verticals. And success in this market, even in booming times, eluded many companies that didn’t have the right go-to-market strategy or the right technology partners. I used the phrase “other AV verticals” to make a point: Digital Signage is not really a vertical market. In fact, it’s not a market per se. It’s a set of technology tools. Why did I start by talking about market dynamics if digital signage is a technology category, not a vertical? Because key to understanding digital signage is understanding why so many companies, equipment manufacturers, associations, and even customers treat it like a vertical market, and then struggle with both marketing plans and creating the right solution bundles to address customer needs.

One reason digital signage is often treated like a vertical: the huge upside sales potential discovered by adding up all the verticals in which digital signage technology appears. Market penetration of digital signage into Retail, Education, Enterprise, SMB, etc, while humming along, is still low. That’s why all the equipment manufacturers are putting huge resources there, both in product development and marketing. No other technology or vertical market shows this kind of double-digit growth year-over-year.

Digital signage also has some “vertical” dynamics, or characteristics, because success in the market has often in the past involved not just having the right tech solutions, but having the right marketing partners, and indeed, the right kinds of customers.

According to recent market research from AVIXA, the digital signage solution segment reached $34 billion in revenue in 2019, and is forecast to grow to $45 billion globally by 2024. The category has been booming and shows no signs of slowing down. But looking at a booming segment with market stats doesn’t help your company attack that market.

 

Digital Signage – the Boom in Many Vertical Markets

There’s a huge Digital Signage growth opportunity in multiple markets if you know how to partner with the right Distributor, and leverage their bundles of AV, IT, and Cloud solutions to grow your business in:

  • Retail spaces
  • Restaurant (including QSR and Fast Casual)
  • Enterprise/Corporate (both employee-facing, and customer facing, and hybrid systems involving both)
  • SMB
  • Education (both K-12 and Higher Ed)
  • Government
  • Financial (banks)
  • Healthcare
  • Hospitality (Hotels, Casinos, Cruise Ships)
  • Entertainment: Sports arenas, and gaming
  • Conference and Event centers
  • Transportation Hubs

It’s a good time to start laying out road maps for profiting from digital signage in 2020 and beyond. Synnex VISUALSolv will present a series of such roadmaps in 2020. Let’s start with the unusual market dynamics that led us where we are today: a boom in digital signage – but coupled with persistent confusion among resellers and AV integrators as to the best go-to-market strategies. As we come out of the disruptions and get back to work, what can the market history of Digital Signage tell us about a more profitable path going forward? What are the lessons learned?

Digital signage burst onto the scene some 15 years ago based on a simple idea: Take the display and networking technology that the AV industry nurtured and refined in the boardroom and the classroom, and bring it into public spaces. The single most important catalyst in that move was the arrival of much more affordable LCD panels: Economies of scale in overseas LCD panel manufacturing lowered prices, hence raising demand, for digital screens. That drove the market for a good 10 years, as screen prices kept falling even while resolution improved to 1080P, then 4K and beyond. The LCD panel ruled digital signage, and a rapidly growing market saw revenue growth even as gear margins declined.

 

In the earlier stages of the market, the delivery and management of content for all those digital signage screens was also a great market driver. In fact, the big CMS (content management system) providers often were the closest to the end user, and they partnered with screen providers and AV integrators for bundled solutions for customers that they brought to the table. That model – with some variations – defined the market dynamics for a decade or more, with the AV integrator often getting involved last, and only at the invitation of the CMS provider and/or a big screen manufacturer. That model was especially true in the QSR (quick serve restaurant) market and indeed most of the restaurant and the larger retail store market. These were areas where traditionally AV integrators were not nearly as active as they were in education and enterprise markets, for example, and so did not have a path to the customer. That, in turn, is why to many AV integrators digital signage seemed like a “vertical” market, one that they could not crack or find profitability in.

What’s changed, today, in digital signage? First: As in the larger AV world, the merging or near-merging of previously separate IT and AV networks is forcing digital signage solutions to be integrated with other AV systems. Add to that new generation display technology such as direct-view LED, and new often cloud-based CMS offerings, with not just content management but monitoring and reporting functionality.

The bottom line on these trends: new displays such as LED, combined with more signage/AV/IT integration, are creating more complex, higher-margin, digital signage opportunities.

From both a marketing and solution bundle standpoint, finding success in today’s new digital signage landscape requires the AV solutions reseller and AV integrator to adapt a different go-to-market approach. They can’t wait for the phone to ring with a big screen provider or CMS provider asking them to come install gear in a shopping mall or a sports arena. Nothing wrong with that, and there’s still business there. But the best customers for digital signage are the AV integrators’ existing customers.

What is needed, for market success in this new landscape? The AV integrator needs to understand the new hardware and hardware/software bundles that will best suit their Enterprise, SMB, and school/university customers’ varied needs. Mounting some LCD panels in hallways and lobbies tied to a dedicated CMS, then walking away, is no longer a business model. The integrator that knows how to put together robust, IT/AV integrated digital signage bundles will win in these booming markets.

Fortunately, the best resources, and the best partners in that effort are – like their best customers – already known by the savvy reseller and integrator. SYNNEX, in its role as a leading Distributor, has leapt to the vanguard of Digital Signage with its VISUALSolv resources, by understanding what hardware and hardware/software bundles customers need, for what applications. This expertise is drawn from its established leadership in AV, IT, and Cloud solutions. With the increased merging of those realms, drawing on that VISUALSolv expertise offers the AV integrator the best roadmaps to market success in the many verticals in which Digital Signage is in huge demand.

 

Even as 2020 ushered in new challenges on many levels, the product distribution and support infrastructure of the Pro AV, Digital Signage and Physical Security markets had already been undergoing years of rapid change and evolution. The current climate has fast-tracked those changes. The good news is: understanding how SYNNEX has evolved to meet the challenges is the key to maintaining growth and success going forward.

“Market maker and market leader” is the role of SYNNEX today. A bold statement, but there’s no better way to describe SYNNEX’s role in the changing markets. The best distributor will combine product distribution activities with high-value services, such as technical training, full sales support for both pre-and post-selling opportunities, bundled solutions, and more robust solutions that steer customers beyond even bundles to custom designs with optional subscription financing.

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