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Our Independent Retailer Roundtable gathered at a Nashville restaurant. |
They say “three is a charm.” So I hope that means our third Independent Retailer Roundtable proves to be our best one yet. This year we certainly have a good group comprising a solid cross section of the United States to provide the answers. They are all from the IMRA/MSO coalition. They are: Gordy Wilcher, owner of Owensboro Music Center in Owensboro, Ky.; Harry Gillum, owner of Showtime Music in Bridgeport, W.Va.; Chris Lovell, owner of Strings & Things in Memphis, Tenn.; Don Ulrich, owner of Yenney Music in Olympia, Wash.; Maureen Johnson, owner of Johnson Music in Dracut, Mass., Bill Wagoner, owner of Wagoner’s Music Shop in Plymouth, Ind., Larry Biernacki, owner of Music Center in Deerfield (Illinois); and Donovan Bankhead, owner of Springfield Music in Springfield, Mo. Let’s find out how indie retailers are doing today.
The Music & Sound Retailer: Let’s start with the state of your store. Some thought the world was going to end a couple of years ago when we had our first roundtable discussion. How is it today? Are you more optimistic?
Wagoner: Absolutely we have some of the same challenges as a couple of years ago. Slowly but surely, we’ve been coming up with solutions to those challenges. It’s been making a big difference for us in our store. We had to adjust. We had to figure out who our customer is today as opposed to who our customer was five to 10 years ago. How to market to that customer? Being on the MSO forum [at www.musicstoreowners.com] makes a huge difference for us because we can talk to newer members and guys who have been in business for years. You get a good cross section of ideas.
Bankhead: Some of the same issues still exist. We all still feel huge margin pressures. A lot of the big companies are still not addressing it like they should. We need a little bit more profitability than they are giving. But being able to work together as independent retailers and share best practices and ideas is the single biggest thing to help deal with those challenges. Other retailers around the country might be dealing with the same issue and you can use their ideas to help adapt. Things are better and I’m more optimistic. But it really isn’t because of the manufacturers. It’s more because we’re able to pool knowledge and resources with other dealers. This year product sales are down slightly, margins have depressed even further; but our profits are hanging in there. They are slightly up in fact due to revamps in our lesson program and several other things we’ve learned through MSO and other NAMM dealers to help increase profits in other areas to help make up for declining margins and increased competition.
Biernacki: Often, we’re so focused on our business that we think we’re the only ones facing an issue. With IMRA/MSO, I can call anyone in the group or go on the Web site and say, “Hey, that’s my problem.” There are 25 other people who have the same issue.
M&SR: Are you afraid to tell other dealers your problems because you’re worried they will learn about your weaknesses?
Biernacki: When I talk to other dealers, I always tell them they are not my competitor. We’re in competition with big-box stores, the Internet, and others.
Bankhead: I’m always willing to share what I do—even with my competitors next door—because the fact is, most people won’t do what it takes to be successful. I can tell you everything it takes to be successful. I can tell you how to revamp a lesson program and make a lot of money. Most people aren’t going to do it. They’re not going to take the time and resources needed. They will keep doing what they’ve always done. The people at the roundtable and people who attend the NAMM Show are not included in that statement though. They want to make their businesses better. They want to grow it. We’re a proactive group. [Jokes] I know how to lose weight: eat less and exercise. But damn, I don’t want to. I want to eat.
M&SR: At Summer NAMM, we heard a lot of talk about the rebirth of the independent dealer. What are your thoughts? Are you confident about the future of the independent retailer?
Ulrich: Our manufacturers are dealing with three different channels to supply products to the end user. Channel No. 1 is us, the community store. Channel No. 2 is the Internet and Internet suppliers. And channel No. 3 is publicly-financed big-box stores. All of those entities are members of NAMM. Therefore, NAMM can’t drive the solution. Providing the solution has to be community-based merchants. We have to have a coalition so we can help suppliers better address our marketing channel.
Wilcher: I think it’s great we have the NAMM trade show and it’s wonderful they are celebrating the independent dealer. But it’s up to us. We have to get up, look in the mirror every day and accept the responsibility for how proactive we’re being in our businesses. Studies show consumer loyalty is at an all-time low. A couple of years ago, it was at about 12 percent. It’s up to us to figure out how to reinvent ourselves almost every day and every hour. The customer wants it his way. They want their price and their terms. Of course, we’ll take all of the help we can get. If NAMM wants to help, that’s great. The main thing is we all need to unite and support each other.
Gillum: The IMRA/MSO group would not have existed if retail always stayed good. We wouldn’t be here today. If it were what it was in 1975, 1980, 1985, and 1990, we wouldn’t be here today. First, problems had to exist before solutions became warranted. The problems grew to the point where we went three or four years saying, “What are we going to do? What are we going to do?” It took time to evolve to a point of eruption, where every day we were wondering, How do we stay open? That’s when a group stepped forward and said, “We need to change the way we do business.” I think the retailer is adapting. Through that adaptation, we’ve learned from each other. The hardest adaptation will be for the manufacturer to adapt. Customers can come in and shop for any product at any price. But we don’t have two Fenders, two Yamahas, and three Gibson Guitar Companies. They establish their costs of operations, then establish their MAP prices. The word retail should be gone forever. The word should be list or Minimum Advertised Price. Manufacturers need to look at NAMM’s Cost of Doing Business Survey to see what dealers need to survive. We don’t even know the costs of manufacturers’ operations. Those who don’t reinvent, revitalize, and rejuvenate their stores will be stores of the past.
M&SR: Now that you’re in a group, have you seen manufacturers change their policies to help you?
Lovell: I don’t think manufacturers have changed anything. But I think they will. What I’m encouraged about is the indie uniting will bring that change about. That’s what I’m excited about. Once we’re able to speak in numbers, it’s going to change. That’s what makes the future better. Our industry needs radical change. The only thing that will bring that change is independents bringing force into play to bring those changes about. I’m excited about that possibility.
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