Anna Mitchell talks to AVIXA’s Sean Wargo to get an overview of the Covid-19 pandemic’s effect on the AV industry and learn how the trade association is supporting its members through the crisis.
The impact from the Covid-19 pandemic to business has been swift and extreme. The response to the threat should rightly be focused on limiting spread and the loss of life. But stabilising the global economy, helping people remain in employment and – where they can’t - creating the conditions for them to return, is vital too.
As the AV industry’s trade association, AVIXA is responding with messaging and advice for its members. We spoke to Sean Wargo, director of market intelligence at AVIXA, to find out more.
AM: Some areas of the industry have been hit far harder than others, should companies look to shift their focus to areas of growth and how can you help?
SW: In this situation, it is perhaps best to focus on areas of stability rather than growth,
since true growth is likely very hard to find and may be non-existent. In other words, it’s about relying on the parts of a business that are holding steady even as others decline. This is clearly easier said than done since it requires a diverse portfolio of business to shift between. Specialty businesses are the most at risk, unless they happen to be in a specialty area that is more stable, like conferencing and collaboration in the current environment.
Otherwise, this is a great time to be increasing firm capabilities through training, hence why AVIXA is offering free online education to AV professionals. We hope this provides AV professionals the opportunity to learn new topics, work toward CTS certification, or earn CTS renewal units if already CTS certified, while work possibly slows.
AM: You’ve started releasing a weekly impact survey, why do you believe it’s important to track the impact of the pandemic on the industry?
SW: The simplest reason is to foster sharing and communication to combat the isolation brought on by the social distancing measures. It’s helpful to see you are not alone in these difficult times and to learn about how others are coping. Beyond this, the AVIXA team wants to better understand the impacts so that we can determine whether and how we could be of service to our larger community. As we are learning with tracking the virus itself, data is a powerful tool and the lack of it only contributes to uncertainty and risk.
AM: Which areas of the industry were immediately hit hardest by the pandemic?
SW: Live events is the clear answer here. Since most trade shows and conferences have been cancelled through at least May or so, the live events business is on hold. Firms solely relying on this segment for revenue are thus going to be the most likely to take more drastic cost measures like cutting staff or reducing salaries and will be seeking some outside assistance when and if emergency funds are insufficient. Most experts in the space do not expect this to rebound before late Q3, though this is dependent upon the timeline for restrictions and closures.
AM: Which are likely to feel a long-term impact?
SW: It’s too early to tell. The hit to live events will reverberate for quite some time since some firms may not survive. All segments will also adjust a bit, though if anything, it appears to be locking in more of a focus on remote connectivity, content capture, and distribution. These capabilities will be in even higher demand from solution providers going forward. Hospitality and transportation will also be a little slower to recover, but they will over time.
AM: Have you pinpointed areas that will be resilient or have the potential to return to growth quickly?
SW: Corporate integration projects are still going on, even if crews must follow new protocols for working in spaces. Some other work is delayed but not cancelled. Thus, with any relaxation of restrictions, many projects can get underway or resume.
AM: We’re starting to hear reports of supply chain issues. Are you tracking this problem and do you have any insight or support for your members?
SW: In many ways supply issues were relegated to the phase one impacts of the virus when manufacturing in China was halted. This has largely come back online after noted shortages in some components, particularly displays. Phase two is less about supply and more about demand side constraints. These are the cancelled shows, travel, meetings, sporting events, and venue closures. In short, consumers can’t spend, which then trickles down to delayed projects and lost revenue in pro AV.
AM: In addition to the weekly survey, have you made assessments and can you provide information on how the pandemic is likely to affect the existing longer-term growth forecasts made by AVIXA?
SW: By fortunate coincidence, the timing of the pandemic fits into our normal forecast review cycle which concludes in June of each year. Thus, we are working with our research partner Omdia to incorporate pandemic impacts into our revisions. We do not yet have the hard numbers, but we’re expecting that 2020 will now show industry contraction instead of growth. However, it is also likely demand may surge in 2021, thereby bolstering growth for that year and helping us maintain our long-term expectations. Time will tell, since the length or repetition of restrictions is not yet known.
You can visit bit.ly/3aon5FB for the latest information on how AVIXA is supporting the AV industry during the Covid-19 crisis.