Sense of Luxury: NuVision wants to be a luxury name for the video world
Creating a Luxury brand is no simple task. Creating the mystique of exclusivity takes time and isn’t a mission meant for a company looking to make huge market penetration, or move a lot of product. This has been the conundrum for some brands in the CE industry, which is typically marked by price drops and commoditization, especially in the television category. But a lesser-known brand, Nuvision, is looking to change that.

Nuvision isn’t exactly a new company. It has had flat panel televisions on the market for around for 5 years, achieving relatively minor success. But the company had some big changes in 2009, which may poise the brand to gain better traction. In March, the company was acquired by Cattrail, an investment firm based in Weston, Connecticut, which had already been funding NuVision before the takeover.

Though Cattrail is not a name common to the CE world, it brought in new management that is familiar to the luxury market. New vice chairman David Hester was put in place to strengthen the management and implement a strategy to establish NuVision as an exclusive luxury brand of television, akin to brands like Cartier or Aston Martin. Hester has some background, mostly from working with Gateway (the PC company). But most of his experience comes from working with high-end luxury products and brands like Chanel, Cartier, Rolex, Dunhill, Boss, and Armani through jewelers and department stores.

Cattrail’s plan for NuVision is ambitious. The flat panel market is fast approaching commoditization. With large players such as Wal-Mart and Costco selling just about every name brand, including Sony and Sharp, it has become harder and harder for CE dealers and installers to compete. Meanwhile, Pioneer KURO’s exit from the market lead some to believe that it simply is not possible to command a price premium in the television market.

Hester isn’t buying that theory. He thinks other companies have been taking the wrong approach or are too top-heavy to properly manage a true luxury brand. To that end, NuVision has been signing up dealers and releasing flat panel TVs between $3,500 and $6,000 above 40-inches. What makes them so confident? Luxury CE picked Hester’s brain to find out a little more about what he and Cattrail have in store for the NuVision brand.

Luxury CE: What is NuVision’s new or revised strategy? Where does your company fit in?

David Hester: We believe we can provide the expertise and capital to create a truly exclusive brand in a market devoid of such luxuries. Watches have many exclusives like Rolex, Cartier; fashion has many including Armani; cars have their Rolls Royce, Aston Martin, Ferrari; yet, the TV market is dominated by mainstream brands. TVs are sold purely on price, discounts and confusing model numbers that are hard to remember for consumers and dealers alike.

At the moment lots of people talk about luxury brands, but most of the product is commodity. You can buy a Sony television at the same price as the guy in the $20 million house. You can go up to the wall and say, “Oh, I’ve got that TV.” It’s available at Best Buy, Fry’s, or Sam’s Club, etc. So, even when you take high-end brands, which aim to be high-end, like Pioneer, they are available in Best Buy. They are not an exclusive brand. Other brands, such as Runco, have distribution in excess of over 1,000 dealers.

An exclusive brand is something that looks for exclusive and narrow distribution, like Rolex for example, which has a small, narrow distribution of high-end dealers who provide a service above and beyond what would normally be offered in a retail store.

LCE: Why did Cattrail decide to acquire NuVision and take more control over it?

DH: We felt that NuVision had a niche that could expand into the luxury level. It had already been there and had been established for five years. The company hadn’t made as much traction as it would have liked, but we actually felt that if we could put some more expertise in their management and marketing, then we could drive into the luxury sector and offer a true high-end product, one that isn’t sold on price at all.

We do not discount our product and you won’t find a cheaper price on the Internet. You can search it, but will only find the same price because all of our dealers volunteer to keep to the retail price. The NuVision business model dictates that our product sells at full price based on pure quality of build, performance and design; therefore dealers never have the need to discount. Our products remain reassuringly expensive.

LCE: The high-price television market has been tough for other companies. Pioneer KURO is a good example. If they could not make it in this market, what makes you think that NuVision can?

DH: Pioneer was a great TV brand and a product that we admired when we entered the market. We have learned a lot from their successes, and in striving for Nuvision to be the best, we have sought out some of the key people from Pioneer. Our marketing team worked on their branding both here and in the UK. One of our board members is Craig McManis ex VP of sales and marketing for Pioneer.

But what makes us different is that we don’t own the production line. We don’t have to keep up a level of capacity in order to justify that product. Pioneer had to chase volume, which meant they had to chase Best Buy. Once you have to chase the big box retailers, your margins erode. Plus, you have to feed that monster called a factory, which is a fixed cost. We don’t have that. We buy time on a line from boutique, specialist manufacturers to produce our product—it isn’t just someone else’s product that we buy off the line and re-badge. And we don’t need to sell millions of TVs, we only need to sell tens of thousands.

LCE: The economic downturn is creating all sorts of challenges for the CE market. What are your thoughts on the current economic climate, and how does that affect your company’s goals?

DH: We don’t see that as a challenge because we are only aiming for the top one percent of the market. These are the same people that are still buying Aston Martins and Bentley Motor Cars. You don’t walk into an Aston Martin dealership and ask what discount you are going to get, and you don’t see price reductions on Rolex watches because of the downturn in the market. These people have cash and are still discerning enough that they want a luxury product that is different from everyone else.

LCE: Where does the A/V dealer fit into your plans?

DH: Our channel is naturally custom installation. On average, our jobs run at about 80,000 dollars, of which 20,000 or 20 percent of that is in video. So there are high-end installs. We are looking to have around 500 dealers, maybe more in the long term. By keeping the numbers of dealers small we will drive business to them as the brand establishes itself year on year. Typically, the dealer will be one of a chosen few. The dealer is important to us, and we are to him or her. We also personalize local marketing for them, provide training, and reduce the number of visits by first ensuring a reliable product (some companies have failure rates of 20% and above). But if it does breakdown in the first two years, then we will fix the product in the customers home within 2 business days, as opposed to weeks. Once the product has completed its lifecycle, it can be returned to our dealer to be recycled.

These guys are used to selling $25,000 worth of speakers into someone’s home. Therefore it should be no problem for them to sell a high-end TV if there is one available. A problem they’ve not been able to get at recently is that there are also price reductions on TVs. They’ve almost given up on selling them.

LCE: How are you distributing your product?

DH: We have our own sales team and sales reps. We have around 17 sales reps around the country to sell our products. Our dealers are true partners. We have them in small numbers. Currently, I’ve been meeting with new and existing dealers to find out what they need and want. Before CEDIA, we had about 82 dealers. Since CEDIA, we have in excess of 300 and are well on our way to 400 (in the U.S.). Right now we are only distributing in the U.S.. Shortly, we will be selling in Canada and in other markets, as well. We’ve had major outlets come to us and ask if we would like to be in their 300-plus outlets, but we have told them, “No, we don’t do that.” We have been very protective of the channel.

Distribution for the foreseeable future is the same now as a combination of dealer direct and distribution, which ensures that they do not have to stockpile inventory. Some big companies force dealers to commit to huge quantities or go elsewhere—and further reduce their already small margins while tying up capital and driving up their bank charges, hurting cash flow. NuVision won’t strap dealers in this way, and we also don’t have to divert huge quantities of stock to meet the demands of big chain retailers while starving smaller dealers.

LCE: Are you adding projection products in the future, as well?

DH: Yeah, we’re adding it on, because if we are going to be the provider of the flat screen connoisseur, we need to provide all flat screen operations. The fact is, if you have the same operating system running from TV to projector, it makes it a lot easier for the client. It’s a natural progression. It’s still video.

We are introducing projectors using a team of industry professionals, two of whom were with Sam Runco for many years, and who are well respected in the industry (Tin Ho and Ed Gurr).

LCE: So what is the selling point of a NuVision TV set? With so many brands on the market, how can you position yourself? What makes your product different?

DH: Never underestimate selling something that is exclusive, something that is only available to a small number. Of course, you can only become exclusive if you sell reliable, high quality products. We believe our picture quality is better than anyone else; we also consider our TVs to look as good off as they do on. We have a textured aluminum finish on the 40-inch and above, so unlike most TVs that you buy out there that are plastic and highly reflective with a big, distracting brand name in the middle, ours look high-end and expensive. We don’t have a brand name in the center, just a little “U” in the corner. If you sell a Rolls Royce, you don’t put “Rolls Royce” along the side of it.

LCE: How else do you suggest this sense of exclusivity?

DH: When you buy an expensive car, you get a tender loving care package with it and after sale service. What we do is offer a two-year warranty. We take returns within 30 days, and after that we fix the TV in the home within two days. It doesn’t disappear off to a service center for two weeks. We’re offering a service level that is high. With other companies, if the TV breaks they come and take it away, which leaves a big hole in the client’s life.

LCE: When you talk to dealers, what are they telling you? What kind of feedback have they given you?

DH: They want a product that they can actually make money off of and have a product that is an alternative—something that they don’t think many have. When we decided that we were going to buy NuVision fully back in January 2009, we went around and met up with dealers and rep firms and asked them what they needed from this market. They came back and said they wanted something with great picture quality, brand reliability and after-sale service. So, we’ve given them everything they wanted. They also asked us for a product that looks expensive and that the TVs be available in silver, as well as black. So, we have both [as well as smaller sets available in white and even pink, for a young girl’s room].

LCE: Brands like Rolex or Rolls Royce are synonymous with luxury because they are so widely known. Even those who cannot afford it know the name and aspire to owning one. How do you build that kind of luxury brand name for a TV company?

DH: A brand like Rolex took years to establish that kind of brand recognition. But there are a lot of exclusive brands that are not advertising at all. We’ll use watches again as another analogy. If someone goes in to buy an expensive watch, it’s not all Rolex in front of that person. The buyer looks, then, to the expertise of the seller to lead them to a high-end brand. That’s why we are we are selling through custom installers, they are the ones who the community trusts.

LCE: Are you actively marketing the brand?

DH: We’ve advertised in USA Today; we’ve done local initiatives with our dealers and we do local e-mail blasts to high-end databases. We also host wine tastings and all types of high-end events that you would tie to a high-end brand. And you saw that at CEDIA, ours was one of the only invitation-only events. There was even a bouncer at the door. We were very polite to people who were not invited. We asked what brands they sold and, while we turned them away, we told them to speak to their representative to determine if they were the right person to sell that. We can’t let everyone in.