Merging With Nationwide Brings Azione Scale, Resources, Says Glikes

“You have to have scale, you have to have resources,” Glikes said, noting Nationwide has launched 2,000 websites and has had more than 100 million social views. “We’re so far behind now,” he said, of Azione’s 200-plus dealers. Azione dealers will pick up “a tremendous amount of services, platforms and marketing capabilities that we just didn’t have."

Hank Alexander, director of Nationwide's Home Technology Specialists Nationwide (HTSN) buying group, told us the acquisition of Azione is a "merger of equals." With HTSN's 215 dealers and Azione's 225, "you have two really good groups coming together," he said. For HTSN dealers, "your scale in the custom business doubles overnight." With a combined dealer base of 450, there could be some competitive overlap in local markets. Glikes said: “We looked at that,” and of the 215 HTSN dealers, about 70 are pure custom electronics integrators like Azione dealers, with overlap “only in about four markets."

Dealers in both groups have access to new brands and conversations with brands they hadn't had buying programs with before, Alexander said. Vendors, too, may benefit from association with Nationwide’s members, Glikes said, saying vendors will get stronger and more profitable dealers as a result of the combination. “They’re two totally different organizations” with different types of dealers, he said. The groups also have seven vendors in common, including four TV makers. “Some of our vendors may want to do business with HTSN, Glikes said. “In essence, it’s not a competitor any longer so they may choose to do that.”

In addition to vendor programs, HTSN members will have learning opportunities, Alexander said, citing Glikes' strong emphasis on education, along with the group's SmartHomeHire program launched in April to address the labor shortage in the custom channel (see 2104270098). Azione dealers will benefit from "deeply discounted" credit card rates, group insurance rates and inventory financing, Alexander said. "It's a really good marriage," he said. Azione dealers will also have access to the CEDIA education platform, including free CEDIA membership, paid for by Nationwide, and CEDIA member pricing toward CEDIA Academy courses via a CEDIA-HTSN partnership formed in April.

On timing of the partnership, Alexander noted the COVID-19 pandemic "changed everything for everybody, and when you look at what it means to be together with the best of class of CI guys on the Azione side and the scale of things we do on our side, it starts to really make sense." Azione has a distribution relationship with PowerHouse Alliance, and HTSN has eight of its own national distributors, Alexander said: "There's more inventory available and different programs."

Business throughout the custom channel is strong now, Glikes said, but he’s preparing for a future when there's no longer a surge. “Right now, every day is Christmas,” he said, noting that business is up 54% year to date over 2020, but “it won’t be like this forever.” Referrals “won’t keep coming, and the builders won’t keep building, so we’re going to have to market" by stepping up efforts with websites, social media and to reach previous clients. The relationship with Nationwide “will catapult the Azione dealers" to a different marketing level, he said.

By acquiring Azione, Nationwide picks up a group of “really good integrators,” Glikes said, and Azione gains relationships with luxury appliance dealers. "Imagine the Viking and Sub-Zero customer that our integrator has that we could refer to the local high-end appliance store,” he said. “And if the high-end appliance stores finds a client first that wants a control system, shades and lighting -- and that’s not in their wheelhouse -- they could refer that to us,” he said. The relationship between the two groups’ dealers is “very symbiotic” and “mutually complementary," he said.

As a result of the partnership, HTSN dealers will make a push into lighting, Alexander said. The group already has exposure in shading control, which will increase with the Azione relationship, he said. "There's probably a couple of categories in there that we're not in that they are that will be a push for us."

With luxury appliances starting to become smart, "we can start to connect the dots between our luxury appliance business and that home integrator," Alexander said. Appliances "need to be sitting on a network," he said, and the customers buying smart appliances are likely those also putting in a home theater or control system: "That guy who's spending $20,000 on a Sub-Zero refrigerator is the same guy who's going to spend $20,000-$30,000 on a Sony projector or $100,000 on an integrated home." For the most part, the HTSN luxury appliance dealer and Azione electronic integrator have different businesses, he said: "Why not marry those two guys up and start working on projects?"

Programs and goals will be independent, Glikes said, and the dues structure will remain the same for each group. They’re similar, with HTSN dues $299 per month vs. Azione’s $900 quarterly dues. There are no plans currently for a combined dealer event, Glikes said, saying Azione’s next planned event is March 28-30 in New Orleans. It will also have three regional meetings instead of a second national meeting, he said. Azione dealers will be invited to Nationwide’s PrimeTime event Feb. 5-8 in Phoenix, though that “may not be a good fit,” due to the “buying fair” nature of the event that draws several thousand dealers, Glikes said.

The groups will operate independently "for now," said Alexander, citing "a lot of moving parts." In year one, the groups will remain separate, he said: "Maybe in year two we start to combine; I don't know. If we can say the Azione meeting is separate from the HTSN meeting, that's fine," he said, but HTSN will gain the education benefits based on bringing Azione assets into Nationwide.

Azione dealers will have access to data from PriMetrix as part of the partnership. On the potential benefit data can bring, Glikes cited a “fire hose of services.” A day after the partnership was announced, Azione dealers received a PriMetrix data analysis of their market, including market size and their share of it. “Nationwide measures everything,” and “we will see how that can help us,” he said. That kind of information would be an important asset for a dealer looking to expand, he noted.

On Azione dealers’ response to the news, Glikes said the top concern was about how the association with a larger group could change Azione's family feel. That won’t change, he said. “I built it on culture,” said Glikes of the buying group he founded 10 years ago: “I would never abandon it for a change in culture.” Alexander and Glikes will remain in their current roles.