We often like to do something different and keep things fresh. This month is an example, with the first-time presentation of Talking Heads. We asked 45 small and large manufacturers and distributors about two of today’s hottest topics. The questions are: What do independent dealers need to do to keep pace with chain and mass market retailers? And, Do you see a shift in your distribution and sales focus before the new decade begins?
Without further ado, let’s present the answers. We present the answers in no particular order. We hope it will help you a great deal at your store.
Enjoy.
1. What do independent dealers need to do to keep pace with chain and mass market retailers?
“My radical idea. Dealers will not be able to stop the consumer from going to the large and mass market retailers. Create a National Instrument Amnesty program for instruments purchased at Wal-Mart. So if I bring in my Gibson $100 guitar from Target...I get a reasonable credit toward a new guitar made from a company that does not sell in the large chain store. Make a deal with the small manufacturers to get credits/rebates for these type of sales. It will only hurt the dealer if they sell the customer a brand that is selling in the chains. You will only be fueling the machine that wants to kill you.”
—Adam Levy,
Brooklyn Gear
“Well, I can say from my years as a dealer, change is inevitable. We never used the word ‘discount.’ What we did was we changed the whole concept of service for people who were interested in drums. We put in entirely different programs that nobody else ever had. That’s what it takes. We literally almost redecorated the place every year. Innovation is what made us successful. People shopped with us because they knew what we were talking about. You must teach, repair, have drum groups, etc.”
—Remo Belli, Remo
“In our opinion, independent retailers (although floor space is often an issue) might pick-up a few more P.O.S. items and accessories to complement their standard equipment inventory. While apparel and like items may not yield hefty margins, they add a sense of hip-appeal and freshness that the 16- to 28-year-old demographic typically goes for.”
—Brent Eskew, Stage Ninja
“Whether delivering services or products, companies need to find ways to differentiate themselves from the competition while offering increased value to the consumer. This is true of independent music dealers. Dealers should focus on what makes them different. This could be an area of expertise such as a specialty shop, or repair services, lesson plans, community programs, etc. I don’t think it is a matter of ‘keeping pace.’ As they say, you can’t out Wal-Mart Wal-Mart. Don’t try to fight against the mass merchants’ and box stores’ strengths. Rather, focus on differentiation and make sure your business is involved in the community. At D’Addario, our sales department has seven dedicated regional sales managers and six inside sales personnel to meet the needs of the independent dealer network and assist them with programs, including merchandising fixtures and other important support considerations.”
—Jim D’Addario, D’Addario
“First, find innovative ways to entice customers into the shop. It could be contests, a give away, clinics, lessons, or advertising service. Second, make sure your staff is educated on the products. There is nothing worse than asking the advice of someone who knows less than I do!”
—Joe Melchiorre,
Shadow Electronics
of America
“Independent dealers need to choose product lines from manufacturers who ‘give a damn’ after the gear has left their warehouse and take pride in doing so. After this important initial choice, they need to be willing to learn everything about the product and offer, display, and stock it appropriately. Knowledge and real care on a retail level creates trust, often beats lower prices, and makes people come back.”
—Peter Wolf, PRS Guitars
“One lesson I learned years ago is so simple: Service, service, service. This is what the music dealer can offer that the big box stores can’t offer due to their discounting and ultra-high overheads.”
—Howard Chatt, Pignose
“In this day and age, no matter if you are a manufacturer or a retailer, you have to provide value to your customer. Then you have to decide whether you are going to supply commodities or be a specialist. Mass market retail chains are very good at delivering product. They have the financial ability to buy deep, can carry a broad range of inventory, and are able to standardize systems across a vast number of stores to keep costs under control. As an independent dealer, going head to head with a powerhouse retailer makes no sense. While they are zigging, you have to zag. There are small specialty manufacturers that are only able to deliver limited quantities of their goods. They cater to a specific market niche and need sales expertise at street level to sell their products. In my view, presenting interesting new products to market by differentiation is a key element in today’s retail strategy. Just ask yourself a simple question: what makes me unique? I think you then have to find suppliers that offer a fair playing field. There is no point trying to compete on a brand if the margin is 20 percent. The Internet is dictating lower margins and only by manufacturers controlling their discount structures will profitability for the dealer be sustained.”
—Peter Janis,
Radial Engineering
“Independent dealers will continue to play a vital role in servicing consumers of MI and pro audio products. To be successful however, such a dealer has to carefully consider what has happened to independent dry goods retailers, hardware retailers, building materials suppliers, and other industries where mass retailers have become prevalent. I think such a dealer has to become more specialized, perhaps focus on product lines that are not SKUs regularly offered by mass retailers, keep those products in stock, and provide added value to the consumer. Accessory items are also a key. When a consumer needs picks, cords, strings, speakers, drumsticks, or a tuner, they often want it now and will not hesitate to shop around the corner. A well-planned line card, comprehensive product knowledge, inventory on hand, and a good selection of accessories will be key elements. A good service department won’t hurt either.”
—Chris Rose,
Eminence Speaker
“Independent Dealers will probably NEVER be able to do this effectively. Instead, they may want to consider carrying specialized and unique lines that larger retailers are not interested in. Throw in boutique-style customer service that has the potential customers feel like they are VIPs. Customer service and specialized products may ‘seem’ like too much trouble, but if you have something to offer that makes customers feel like rock stars instead of cattle, you may have created the key to an effective and profitable MI business.”
—Charles Tentindo, Zen Riffer
“Independent dealers should be as informed as possible regarding product lines and playing styles. If a customer respects the opinion and expertise of the salesperson in the independent store, he or she will return there to buy.”
—Rick Shubb, Shubb Capos
“Smaller dealerships have the opportunity to offer more personal interaction and customer service than larger stores. Also, the smaller shops can cater to their specific niche market or focus on the typical price range of products appropriate to their locality. Though the trend is definitely moving toward the superstores, there are plenty of needs that the larger stores are not focusing on, especially with respect to higher-end product.”
—Dick Boak, C.F. Martin
“Our MI industry is changing and good independent dealers must choose their sides. Two questions will help determine where a good independent dealer is headed: 1. Ask yourself, should I support brands that sell into big box retail, chain stores, or Internet nightmares? 2. Do I make high quality margins on these brands?
If a quality independent dealer can honestly answer ‘yes’ to both questions, then they should stick with their current product and brand mix. For most of the quality independent dealers we work with, the answer is ‘NO’ and ‘NO.’ They simply need to move their sales focus and their promotional efforts to brands that actually support independent dealers. We try to explain this to dealers with our flagship Greg Bennett brand…(Here are some more thoughts):
Education, Education, Education: If there is one thing a quality independent dealer can do, it is grow their local market through music and product education. Lessons are great and the backbone of many strong independent dealers’ businesses. Make sure the music teachers are using products that promote brands not sold down the street.
Also, good independents tell every customer they will take care of any problem. The consumer does not get solutions at a big box or mass merchant store. The quality indie dealer always has an advantage because they know the products they sell and they sell the brands that support them. Some brands use their independent base like yesterday’s dish towel. The dealers built the brand the mass merchants now want. That’s a great reward for all the years of promoting a brand only to see the same product two miles away. Again, it is time for independent dealers to take a stand and pick a side. Independent dealers need to quit doing all the work for zero reward. Good independents train their floor sales people to show and sell the brands that make the store money. Use sales incentives for floor salespersons on only the brands that support independent dealers. It does no good to educate a consumer about a product that is sold at the big box store down the street or via one of the Internet nightmares. The independent dealer does the work, but somebody else gets the deal because they are $25 cheaper? Unfortunately, this happens all too often because dealers believe they must support brand ‘X.’”
—John Hawkins,
SMC Music
“Dealers do not compete head-to-head with the chain stores or mass market retailers. They research what the local chain stores offer for product selection and offer some great products that are not available at the local chain. Once drummers are hooked on a specific product they have to return to the independent dealer to purchase it. Of course both stores need the say, top 10 products, but then the independent can stock top sellers their customers ask for because the chain does not stock it…Product breadth remains important for repeat business and customer visits. The last big program the successful dealers differentiate themselves with is the lessons and various free teaching tools we supply at no charge to help keep the newer students excited about playing drums…These full-day seminars have been offered at no charge and remain extremely popular. Growing their lesson business helps increase store traffic as well.”
—Mark Dyke, Vic Firth
“I think it helps to be strong in repair, lessons, used gear, Internet sales, eBay, and boutique/alternative brands. And your staff should be Internet savvy, have superior product knowledge, and an understanding of what great service is. Do anything that bolsters cash flow, differentiates you from the big boys, and builds local traffic. In today’s business climate, independents need to have all guns firing. I also recommend communication with other independents through groups such as
musicstoreowners.com.”
—Joe Naylor,
Reverend Guitars
“Offer boutique products not available at the mass market retailers.”
—Abe Wechter,
Wechter Guitars
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