For the typical brick-and-mortar musical instrument retailer, every single market segment is an important one, from acoustic and electric guitars to power amps and loudspeakers to digital microphones, keyboards, accessories and bags. One of the most important and dynamic segments, though—and one characterized by product innovation and companies whose names are recognizable the world over—is that of drums and percussion. The Music & Sound Retailer prides itself on having its finger on the pulse of our market; this time, we speak to a panel of recognized experts to discern the relative strength of the drums and percussion space, find out how retailers could better capitalize on manufacturers' products and, finally, discover what offerings are new or soon to be coming down the pike.
We could not have asked for a better panel: Craigie Zildjian, CEO, Zildjian Corp.; Mark Dyke, Director of Sales & Marketing, Vic Firth, Inc.; Peter Stairs, Vice President of Sales, Sabian; and Robert Yerby, Vice President Sales and Marketing, Remo. There is much to discuss, so let's jump right in.
The Music & Sound Retailer: Across all industries, the economy continues to be of concern. How are percussion and percussion accessory sales doing? Are they up, down or about the same as compared to last year?
Mark Dyke answered, "Yes, Vic Firth Company is seeing an increase in ordering activity and the orders are once again getting larger. Why? To ensure the best scenario for our partners with our product range, we chose not to make any cuts to our marketing, promotional or educational programs. Our promotional support to our partners has increased, so they can provide better service to their customers and develop strong relationships for repeat business. Our marketing program remains intact, so we continue to create global end-user demand for our product range. We have added several features to our Web site to help our partners know about merchandising options for our products and current value pack offers, as well as to assist the percussionists to get information they require easily for product selection decisions. We've increased the educational features to assist band directors, who are not percussionists, choose the best product for each percussion instrument, as well as added international drum festival coverage for the drummers and added new artist roster features. That's just to name a few. All this activity is backed by our strong inventory of finished products, so we can ship our orders within 48 hours with greater than 95 percent fill rates. This service is critical for the distributors and dealers to support their customers' needs."
According to Peter Stairs, "In a general sense, the situation is still challenging, for sure. We have our territorial areas of concern, but also many that are performing much better than expected. It's a different environment out there for everyone now, from the retailer right up through distribution and manufacturing. There has been much more of an air of caution, and I don't think anyone expects that to change soon, particularly given some of the economic news that's been prevalent lately. Having said that, we are very optimistic about the future. We've seen a marked increase in sales of our higher-end series as of late and are having to work extra hard to keep up with the current demand in those product ranges. That's definitely a good sign for Sabian."
Robert Yerby responded, "Percussion sales are trending up double digits in comparison to last year, and our drumhead business is up, as well. Market conditions continue to be challenging overall. We visit lots of dealers throughout the year to get an accurate pulse of what's happening out there. We find that many dealers are having two or more slow business days to every good day. This makes it challenging to manage inventory levels for all brands and price points. The accessory business in general continues to have steady velocity. Dealers are moving a decent amount of sticks and heads in this economic climate. Consumers are definitely saving more, and are looking for deals on percussion accessory items. In this economy, we see more consumers shifting to online purchases because of aggressive pricing, no sales tax and free freight."
Craigie Zildjian said, "The current economic climate is challenging across all industries, and MI is no exception. Despite this backdrop, we're still investing in all of our businesses and managing to show growth. We've also created some exciting new promotional programs for the back half of the year that promise to deliver profits to the trade and keep our brand top-of-mind with consumers. Additionally, we have several new products that we'll be launching before the end of the year that promise to generate a positive response from the trade and from consumers."
The Retailer: When manufacturers maintain close ties to the dealer/retailer channel, their respective fates are very much hand-in-hand. What advice would you give retailers to keep people in their stores and, in fact, draw in more potential customers?
Peter Stairs said, "That's not an easy question to answer. It's certainly not that retailers have been resting on their laurels and not doing anything to try to generate business in this climate. They have been hard at work identifying ways in which to draw the customer into the store and make a purchase or, at the very least, kick the tires, so to speak. You see everything out there now from free product to more aggressive financing offers to contests, bundling and any number of other promotional ideas in order to try to grab customer attention. Sabian has always taken a very proactive approach in working directly with our retailers to design custom promotions, rather than a "one-size-fits-all" approach, which really is no longer practical, if it ever was. One thing for certain is that a significant amount of business seems to be switching to online purchasing or, at the very least, online information gathering. Every retailer has to make their own decision on how they will approach this business in the way that is best for them. Some will choose not to participate. I think it is safe to say, though, that embracing the Internet through either a purely informational Web site or one with a shopping cart is definitely an opportunity out there today, as consumer buying/researching habits are changing. We all have to adapt to that."
Robert Yerby said, "We recommend being creative with marketing penetration on the Web, along with using social media tools. Consumer velocity at the store level has been challenging this year, and more people are getting comfortable purchasing online. Some dealers are doing some very creative things with interactive product demonstrations on their Web sites to enable consumers actually to hear what they are buying online before their purchase is made. Others are doing performance activities related to their lesson programs. Regular activity posts on Twitter and Facebook are another effective way to keep consumers aware of all promotional activities. We are big advocates of Recreational Music activities and programs. We have associated ourselves in a joint study with UCLA in a new program called Beat the Odds. This program is designed to help keep kids in school with the use of drumming activities. Our national dropout rate continues to increase, and we saw a tremendous opportunity to get involved in a new market while having a positive effect on the lives of kids in our school systems. Our commitment to Recreational Music activities is unwavering. We have been instrumental in opening up Recreational Music Centers around the country. Those centers include YEA in Allentown PA, Bongo Boy Music in Indiana, Arizona St University, Music 4 Life Inc. in Las Vegas NV and RMC in North Hollywood CA. Health Rhythms is another Remo-funded program that ties the medical and social elements of group drumming together, with more than 1500 trained facilitators worldwide. We believe that it's important for vendors and dealers always to be looking for new market opportunities. We continue to support group drumming activities around the world, and believe that you do not need to be a traditionally trained musician to enjoy the benefits of drumming."
Craigie Zildjian remarked, "The retail environment today is very different from what it was even five years ago. We know from research that the process consumers undertake prior to making a purchase decision has also changed dramatically in recent years. With the advent of the Web, consumers have become more knowledgeable about the products they buy—even before stepping into a store. That's why successful retailers need to learn as much as they can about what consumers value and use the best tools available to communicate with them. That would be my first piece of advice.
"The second piece of advice would be to find ways to differentiate your offers from those of your competitors. What value can you provide for your customers with your products and services that will separate you from the competition? How will you foster a lifetime of customer loyalty? By knowing customers well and delivering what they value, dealers are well positioned to weather tough economic conditions.
"Finally, I would recommend that dealers maintain an inventory of trusted brands. Dealers need to know that the products they offer their customers will deliver the benefits they promise, especially in a climate in which consumers have less discretionary income."
Mark Dyke said, "The market for accessories is different from that for higher-ticket products. Drummers need our products to play their instruments, so we continue to discuss programs that will keep our customers (dealers and end users) loyal to the Vic Firth brand and quickly supply our products to the dealers to fill the customer demand. We encourage the partners to increase the stick selection so that drummers know they can visit their local shop and choose the stick that feels best for their playing style, get a practice pad or stick bag for traveling, and pick-up some stick tape or purchase headphones to protect their hearing. Vic Firth offers monthly sales incentives and value packs allowing the dealers to provide special offers to their customers while maintaining their VF margins. Stocking the top-selling accessory brand is critical to maintaining, or even increasing, the shop's sales."
The Retailer: Your company is known for product innovation. What is your current bestselling product? What type of products or launches might we expect to see in the future, perhaps even as far out as Winter NAMM?
Robert Yerby remarked, "Our product innovations in drumheads, world percussion and percussion accessories continue to reach new levels. This enables us to maintain our position as a leader in the percussion industry. Our bestselling product is drumheads. The 14-inch Coated Ambassador is the world's number-one selling drumhead by volume. We continue to develop new sounds for our customers around the world. The Powerstroke Pro bass drumheads, launched this year, are doing very well, and we will continue developing new sounds for toms and snare drums for 2012. In world percussion, our bestselling products are education instrument packages, Kids Percussion and Djembe's. We have also developed a new tuning system for our world percussion instruments, and will be launching new Djembe finishes, as well. There are some other world percussion instruments that are still in the R&D phase that are scheduled to be released at PASIC."
Craigie Zildjian said, "At Zildjian, we remain committed to new product innovation across all of our product lines, both acoustic and digital. This fall, consumers will see our Gen16 AE Cymbals and Rack in retail outlets throughout the world. We just launched the Gen16Grooves.com Web site, where consumers have access to grooves by the world's leading drummers and percussionists, including Kenny Aronoff, Alex Acuna, Carter Beauford, Marco Minnemann and a host of other world-class players. And on the heels of Gen16Grooves.com is the Groove Player app for iPhone and iPad. To support our dealers and educate consumers about these new digital products, we launched a new Web site, gen-16.com.
"There are a lot of exciting developments in our cymbal and drumstick businesses. We just released 16 new drumstick models, including three new Artist Series Drumsticks that we designed in conjunction with Dave Grohl, Joey Kramer and Danny Seraphine; and, at Winter NAMM, we'll be unveiling an exciting line-up of new cymbals, as well.
"With our expanding family of brands, Zildjian is committed to bringing the kinds of innovative products to market that will draw more potential customers into stores."
Mark Dyke added, "Vic is constantly encouraging his team to develop new products that create new sound colors, address drummers' and percussionists' requests, and add value for the customer. Recent innovations include the industry's first wood handle retractable wire brush, Silver Bullet aluminum tips on a drum stick, Soft Touch felt tips on a drum stick (2009 Messe award), Kinetic Force drum stick, which adds a dense material to the butt end (2011 Messe show and Drummies Poll awards), 5A Dual Tone, which adds a timpani-type soft felt to the butt end, unique signature stick designs to meet top artists' challenges (but are universal challenges), synthetic yarns used to add durability to mallets, new features to accessory products to add more value, etc. Several of these products are still only available from VF, and there is a long list of Vic Firth firsts in the industry. We are very excited about the new products we have planned for release at the 2012 Winter NAMM and anticipate a fantastic response to these new innovations!"
Peter Stairs concluded, "At Winter NAMM this year, Sabian introduced two new product innovations. The Omni, which was designed in collaboration with Jojo Mayer, and the Holy China, with Chad Smith. Both of these cymbals have done very well for us, with high unit sales and continuing strong demand. We've also just introduced a new direction and concept in box sets called The Mix. Drummers are mixing series in order to customize their sounds. Sabian is once again taking a leadership position in box sets by offering, for the first time, pre-selected Sonically Matched sets containing multiple series. It's still early out of the gate on that one, but indications are extremely positive in the area of consumer interest. In terms of current bestsellers, our AAX and HHX series continue to perform very well and are consistent bestsellers. As mentioned earlier, Sabian has seen a very significant increase in overall demand for our Cast series cymbals in recent months. It really is very encouraging. As far as what we're working on for Winter NAMM, we're still a bit too far out for me to be discussing that, but I think it's very safe to say that we'll continue to live up to our well-earned reputation as [an] innovative cymbal company."
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