“I am not sure there is one all-inclusive answer to this question. Each market will no doubt hold any number of local variances. I do however feel that there are steps independent retailers can take to strengthen their position in any local market. Use your competitors to your benefit. Study them to the finest detail. Learn from both their successes and mistakes. Too often retailers focus on what they view as errors by the competition. While this can be beneficial, it’s their positive aspects that can be truly advantageous. If the new box retailer lures away your best guitar salesman, find out why! Learn their employment policies, pay structure, benefits, and employee discounts. Capitalize on the strengths and then exploit any weaknesses. Rather than battling out weekly sales promotions, take steps to make your location a destination of choice for both employees and customers; empower your employees. Make sure your sales staff can make decisions without a mile of red tape. Mass retailers are infamous for difficulty in returns, exchanges, discounts, etc. Giving some authority to your employees in these areas will boost salesperson morale, while making the shopping experience more enjoyable for the customer; take a chance on youth! Hire that kid with the tattoos and earrings even if he or she does not fit your idea of the model employee. They may just surprise you with their product knowledge, computer skills, and their work ethic. If your employees cannot identify with today’s adolescents, then tomorrows 30 somethings will never think to visit your store.”
—Chad Stewart,
Premier Percussion
“Believe it or not, having a Guitar Center in town is good for business. GC carries limited SKUs. For instance, with mixers, how many do companies make? Some companies make 40 different models and GC stocks two or three. So there’s plenty of room for an independent to stock around that. Independent dealers have more time to spend with a customer and educate them. That in turn becomes a lifelong loyal customer.”
—Russell Brown, Ortofon
2. Do you see a shift in your distribution and sales focus before the new decade begins?
“As far as our sales and distribution focus, I would say ‘no.’ We have felt very well rewarded with the mix we use of both ‘one-step’ and ‘two-step’ distribution, which means we are getting our products out in front of customers in all imaginable ways. You marry that with the particular products we have, along with education and pre- and post-sales support, and that has put us in the position we are in. But we will become much more aggressive in using e-marketing capabilities, such as our Web site and the Internet to increase demand [in our products]. We also want to connect our buyers directly with the place they want to make their purchase.”
—Al Herschner, Shure
“Our distribution strategy will always follow the market and end-user demand. We have seen various trends over the past decade: The increase in online business with our dealers is probably the strongest. We have also partnered with very successful independent retailers who increased business based on unique, local marketing tactics. Our sales approach and the tools we offer will be adjusted according to the needs of our dealers. It is important to us to maintain a diverse distribution strategy as we see diverse end-user purchase preferences in the marketplace. We will focus on those retail partners who can best answer the end user’s future purchase behavior.”
—Jeff Alexander, Sennheiser
“As manufacturers, we always have to search for new avenues of distribution. However, our main focus will remain on the MI market. As the market evolves, we will adjust to changing conditions. Our sales focus will remain on innovative niche products.”
—Tony O’Keefe, CAD
Professional Microphones
“The Internet is well over $1 billion in MI sales right now. It’s only getting larger. I see the distribution focus for the next few years staying status quo. By that, I mean you have your chains, independent dealers, and the Internet. We don’t currently have reps; we have three sales forces. We have a sales force that only works with chains, a sales force that only works with the Internet, and a third sales force that works solely with independent dealers. That’s because the business models of these three main areas of our existing business are totally different. We have divided and conquered the existing distribution channels and will continue to do so if the distribution channels alter.”
—Greg Batusic, Line 6
“There potentially could be some changes. What will probably happen is we will diversify better so our eggs are in more baskets. As far as sales focus goes, Kyser’s big product is the six-string capo, which is in upwards of 80 percent of the market. Partial capos are going to be the backbone of the next decade. There are five companies making partial capos now and we know there will be more coming since companies have already announced it. So for us, it’s about re-winning the partial capo all over again.”
—Randall Williams, Kyser Musical Products
“You have to go where your customers are and where the market is going. If anything, we may start offering different models to the mass retailers and independents. Certain products are well suited for the mass retailer and others are not. We can offer perhaps more customizable products for independents. We have to do business across the board—chains and independents—to keep our company growing.”
—Larry Fishman, Fishman Transducers
“E-commerce has become a very important element of our distribution. When I say e-commerce, I mean providing physical goods to retailers on the Web. At Hal Leonard, we’ve made tremendous financial investments in the last five years in building systems to better accommodate e-commerce accounts. E-commerce accounts typically want one or two items very quickly, so it’s a different kind of ‘picking’ cycle in a warehouse than a traditional larger order that would go to a physical retail location. We see more and more dealers going in that direction. Perhaps that’s even more important to those of us in the music media side of the world (books and DVDs), because they lend themselves so well to e-commerce. A second issue is a hardcore fundamental of music retail: just-in-time inventory. No one talks about it anymore. But the reality is it has changed dramatically and now is expected. We’ve been changing our inventory systems to move faster and be able to ship smaller orders more frequently opposed to larger orders more efficiently.”
—Larry Morton,
Hal Leonard
“We already have. In what has been historically a fairly static music retail and distribution channel, there has been a significant amount of change in the past few years. My guess is it will continue to change and evolve, and it could go a number of different ways. Obviously, any additional shifts on our part will be based on the pace and path of this evolution. Our business has been built on support from independent dealers, and that will continue to stay important to us.”
—Steve Young,
Elixir Strings
“The only constant is change. It’s very difficult to say if there will be major catastrophic changes. I see things changing but I don’t see any specific trends. We will have to adapt to those changes.”
—Daryl McCain,
Antigua Winds
“Of course, we don’t have a crystal ball, but Hohner Incorporated’s focus in the foreseeable focus is on developing our core brands and moving away from what I call the ‘jobber/distributor mentality.’ The role of distributors is changing rapidly due to the Internet and other factors.”
—Rick Gagliano, Hohner
“More so than ever, I think an opportunity exists for the ‘click-and-mortar’ dealers and for manufacturers and distributors to serve that sector. We are really harnessing that environment where consumers are shopping and learning a lot about the products. Instead of turning it over, we are looking for solutions to facilitate those sales, but at the same time, we are including independent dealers. Later this year, we will be introducing a program that allows consumers to purchase products on our Web site and the independent retailer closest to the customer handles the sale.”—TJ Baden, Baden Guitars
“We’ve already been undergoing a change in the last year and a-half…In these times, we have to take destiny into our hands. One thing we decided was instead of continuing to put out developmental money to come up with new products under the D’Andrea and Snarling Dogs banners, we partnered with smaller niche brands such as Rebel Straps and Ice Pix and we distribute those brands, as well as our products, to dealers. In the last six months, our stated goal has been to become the largest small distributor.”
—Fred DiTomasso,
D’Andrea Inc.
“Currently there is a consumer shift to more and more online buying. We have already started working closely with dealers who want to make sure the Mel Bay line is well represented and user friendly on their Internet site. We highly value the relationships our road reps and telemarketers have with their retail accounts. We try to provide incredible information and service to our accounts and this requires us to hire very carefully for these positions. So the brick-and- mortar stores are still very important to us and will continue to be. It is our job to make sure our product works for them. We have so many niches in our line that we can craft a music department just right for any store.”
—Bill Bay, Mel Bay
“I’m seeing shifts now, and the shift are upward. I’ve seen a 60 percent increase in our dealer product this year and a 20 percent increase in our direct product. I have needed to look for additional vendors. The dealers are feeding our increase. I think dealers are making moves that make more sense for them. I believe dealers are starting to find new niches.”
—John Fabian,
Carter Steel Guitars
“A shift that everyone is either enjoying or struggling with is revenues being generated over the Web as opposed to brick-and-mortar stores. Many brick-and-mortar players have found a way to get on the Web themselves. I don’t see that going away. We need to have the right interaction level with both the Internet and the brick-and-mortar store so we provide the right service level to the customer. The customer wants to shop in whatever way is convenient for them. Some want to shop at 2 a.m. online. Some, like me, prefer to walk into a store and touch the product. We don’t see a shift, but we want to make sure we have a balance in working with both types of resellers.”
—Tim Dorwart, Stanton
“What I’m seeing is many system designers and contractors that are working locally to install audio video systems in churches and schools are going to music stores to acquire the products. Many [MI] stores are being asked to provide more and a broader assortment of pro audio equipment.”
—Paul Foschino, Sony
“Well, there are only two and a-half years left in the decade, so I don’t think we’ll see any really radical shifts, but what we will see is the continuing expansion of the Internet as an information source about products and a means to purchase them. In terms of Universal Audio, you’ll see continuing movement toward the desktop in both our analog and digital products. We have some very interesting ideas about other ways we can bring old world analog quality to desktop audio systems.”
—Matt Ward,
Universal Audio
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