ProSource’s Jim Pearse: AI Has Limits, But Listening Can Unlock Growth

At the recent ProSource Summit, CEO Jim Pearse delivered a keynote that blended market insight, industry perspective and a challenge to members and vendor partners alike: embrace new technologies like AI—but never lose the human skills that drive growth.

Speaking to a packed room of custom integrators, retailers and supplier partners, Pearse said the consumer electronics channel is entering a new phase defined by both opportunity and disruption.

AI’s Promise—and Its Limits

Pearse opened with a story about experimenting with artificial intelligence. Earlier this year, he attempted to build an AI-generated version of himself to deliver the keynote.
The result was impressive—but not quite right.

“AI is amazing when you first start using it,” Pearse told attendees. “But something was missing—the passion, the leadership and the vision that all of you bring to your businesses.”

The exercise reinforced a key point: AI can accelerate productivity and insight, but it cannot replace the human relationships and decision-making that drive successful retail and integration companies.

Pearse said he believes AI can help businesses get “about 80 percent of the way there.” The remaining 20 percent—the difference between good and great—still depends on people.

Looking Back at a Turbulent 2025

Pearse also reflected on what he described as one of the most challenging years the industry has faced in decades. With more than 40 years in the business, he said 2025 stands out for the number of simultaneous headwinds dealers and vendors had to navigate.

Among the biggest pressures:

• New tariffs that dramatically increased product costs
• Supply chain disruptions that left shipments stalled offshore
• Tight inventories across key categories
• Persistent inflation
• A sluggish housing market tied to elevated interest rates

Despite the turmoil, Pearse credited both members and vendor partners for working collaboratively to keep business moving. “Our vendor partners spent millions helping absorb tariff costs and supporting dealer margins,” he said. “That’s what true partnership looks like.”

In the end, the industry delivered modest growth—generally in the low single digits—despite the challenging environment. “It was resilience,” Pearse said. “You stayed calm, worked through the chaos and delivered.”

The 2026 Outlook

Looking ahead, Pearse said the industry could see a modest rebound in 2026.

Earlier in the year, he projected 3 to 5 percent growth, driven by improving housing activity, stabilizing inflation and the possibility of lower interest rates.

However, new supply risks are emerging—particularly around semiconductors.

Demand for AI processors is surging worldwide, prompting chip manufacturers to shift production capacity toward higher-margin AI components. That shift is beginning to squeeze the supply of memory chips widely used in consumer electronics products.

Pearse said those components already are seeing steep price increases—potentially 50 percent or more. Because semiconductors represent roughly 20 to 30 percent of the cost of many electronics products, those increases could translate into 10 to 15 percent higher retail prices.

Even more concerning is the possibility of product shortages. “If we can’t sell because we don’t have inventory, that’s the bigger problem,” Pearse said.

He encouraged members to work closely with suppliers and lock in key inventory—particularly ahead of the holiday season.

Beyond the Buying Group Model

Pearse also outlined how ProSource is evolving to support members beyond traditional purchasing leverage. Founded roughly four decades ago by a small group of dealers seeking better buying power, ProSource has increasingly shifted toward helping members grow operationally.

“The buying group foundation is still important,” Pearse said. “But what matters now is how we help members run better businesses.”

Key initiatives include expanded training and collaboration programs.

The organization recently launched a new learning management system designed to deliver role-specific training for technicians, project managers and sales leaders. Pearse said the goal is to have 50 percent of members actively using the platform by mid-2026.

ProSource is also rolling out a new in-person training initiative—ProSource Academy—focused on technical skills and leadership development, including dedicated training for sales managers in the custom integration channel.

Pearse also highlighted the organization’s 1010 collaboration space, which has hosted more than 1,100 member visits over the past year. The venue allows dealers and vendors to meet, demonstrate products and exchange ideas outside the pressures of daily business.

A Simple Idea: Listen

Despite those investments, Pearse said ProSource members—while outperforming much of the industry—still have untapped growth potential. “I believe this group should be growing 10 to 20 percent a year,” he said.

After discussing the challenge with a longtime industry mentor, Pearse said the answer may lie in a surprisingly simple concept: listening. Too often, he said, dealer-vendor conversations begin with complaints about pricing, inventory, or program details.

Instead, Pearse challenged members to begin discussions with a different question: “What can I do to help your business succeed?”

When that approach was tested at a recent ProSource meeting, a veteran supplier told Pearse it was the best industry event he had attended in decades. The reason was simple—the tone of the conversations changed. “Listening builds trust,” Pearse said. “And trust leads to better partnerships and better businesses.”

He believes building a culture of listening across ProSource—between members, vendors, and employees—could unlock the next phase of growth for the organization. “There are thousands of years of experience in this room,” Pearse said. “If we connect that knowledge and truly listen to each other, the opportunities are enormous.”

Celebrating Top Members and Vendor Partners

The event also honored standout performers across the ProSource network.

Member Awards

• Pro Member of the Year: Audio Advice
• Power Member of the Year: Desco AV

Custom Integration Member Awards

• Southeast: Austin Home Systems
• West: Custom Home Audio Video Integration
• Northeast: Martha’s Vineyard Integrated Systems
• North Central: Millennium Sounds

Vendor Recognition

• TV/Video Vendor of the Year: Samsung
• Projector / Screen Vendor of the Year: Stewart Filmscreen
• Speaker Vendor of the Year: SVS
• CI Speaker Vendor of the Year: Origins Acoustics
• Electronics Vendor of the Year: Harman Electronics
• Lighting Vendor of the Year: WAC Lighting
• CI Infrastructure Vendor of the Year: ADI
• Services Vendor of the Year: Vital
• Overall Vendor of the Year: Harman Luxury Audio Group

Pearse noted that the awards process now incorporates deeper performance analysis and member feedback to ensure the honors reflect measurable success and partnership across the ProSource network.

As the organization heads into 2026, Pearse said the focus remains on strengthening those partnerships while helping members navigate an evolving technology landscape.

“Technology will continue to change our industry,” he said. “But relationships—and the ability to listen and learn from each other—will always be the real competitive advantage.”

See also: Brandsource 2026 Summit: Going “All In” For Dealer Success