Only in the future can history be judged. But, at first glance, 2014 was a pretty good year. Sure, there was negative news, such as the Ebola virus and a number of data breaches that affected a slew of high-profile retailers. We also, of course, lost many beloved celebrities who will be greatly missed; these include Robin Williams, Philip Seymour Hoffman, Joan Rivers, James Garner, Tony Gwynn, Lauren Bacall, Oscar de la Renta and, in the music world, Tommy Ramone and Casey Kasem.
When we look back at 2014 a few years from now, however, cited among the positives will be unemployment rates dropping, a strong stock market and low gas prices, whose national average dipped below $3 per gallon on November 1 for the first time since 2010, when we were still in the throes of The Great Recession.
Those three factors, along with Mother Nature deciding to unleash fewer devastating storms on Americans other than annoying polar vortices, all seemingly put more money in consumers’ pockets in 2014. Hopefully, they used those additional funds to purchase musical instruments and accessories at MI stores.
But despite the strong economic indicators cited, a key question still remains: did these factors boost MI retailers’ bottom lines, or did consumers spend their money elsewhere? To find out, The Music & Sound Retailer called upon three dealers to get their take on what transpired in 2014. Answering the call were Allen McBroom, a Partner with Starkville MS-based Backstage Music LLC, which has served its local community since 1978; Brian Higgins, General Manager at Catonsville MD-based Bill’s Music, which will celebrate its 50th anniversary next year; and Marion Holloway, Owner of Holloway’s Music, a Monroe NC-based single-store dealer whose history dates all the way back to 1912.
Floor traffic and sales both rose in 2014 at Backstage Music, and the difference between now and 2008—when the most recent recession first reared its ugly head—has been monumental, noted McBroom. However, floor traffic has not reached the point where the retailer must hire new staff.
“Our employees are spending more time with customers than before. We have less downtime to deal with long-term projects,” he said. “After the 2008 economic collapse, we had plenty of time to spruce up the store. Now, we have to do that sprucing up more quickly.” Of course, though, McBroom is not complaining about sales and floor traffic having increased. On the contrary, he’s delighted.
As for what sold well at the store in 2014, McBroom immediately mentioned guitar strings. “Our number-one- and number-two-selling guitar strings are both made by D’Addario,” he said. “The EJ16—which is for acoustic guitars—and the EXL110— for electric guitars—rank one and two. Our third and fourth bestsellers are Ernie Ball electric string products.”
McBroom, a member of the Independent Music Store Owners (iMSO) group, also pointed to Curt Mangan strings as a product steadily rising up his sales charts.
“Curt Mangan himself calls our store several times a year, and he never tries to sell strings,” McBroom stated. “He asks how we are doing. He makes it personal. I don’t know how many manufacturers call retailers often, but that makes a big difference. He is a trendsetter. He will be a major force in guitar string retail.”
Although guitar strings might only be one small segment of the MI industry, McBroom confirmed that these hot-selling products mean a lot to his business.
“Our acoustic sales outplace electric sales, like many other retailers,” he affirmed. “But when three of your four top-selling strings are electric guitar strings, it tells me the electric guitar business is very active. Although electric guitar players are maybe not buying new guitars, their activity is equivalent to, or higher than, acoustic players. I expect sales of acoustic guitars to continue to outpace electric guitars. But electric players are definitely out there. I think there are just as many guys learning Cream’s ‘Sunshine of Your Love’ as there were 20 years ago.”
Acoustic guitar sales continued to lead the way at Holloway’s Music in 2014, which saw “brisk” in-store traffic. Holloway zeroed in on Taylor’s GS Mini. “Customers of all ages and shapes love the GS Minis due to their incredible sound and ease of playing,” he relayed.
For his part, Higgins personally witnessed an improved economy at his store and stated that he is optimistic about the future. “For the most part, sales in 2014 remained comparable to 2013,” he responded. “Although our online traffic has increased, the continual challenge for us is to find ways to drive customers into our store and not rely on the Web for their purchases. In an effort to accomplish this, we strive to be more than just a place to ‘buy merchandise.’ We like to offer a true musical instrument shopping experience, offering a full range of services when you come to Bill’s. To achieve this, we put on a variety of music-related happenings, such as clinics, concerts, seminars, charitable events and recitals.”
Guitar sales continue to rock at Bill’s, which has nearly 2,500 new and used guitars and basses in stock, with approximately 1,000 on display at all times. “High-end guitars continually seem to be selling well…both acoustic and electric,” said Higgins. “We have at last count 96 Rickenbackers in stock, which are hard to find and are more popular than ever. We are a full-line Gibson dealer. PRS guitars are very popular here as we are located only about 45 minutes from the factory, and we have a great relationship with Paul Reed Smith and his staff. Acoustically, Martin guitars are our mainstay, but we also do very well with Alvarez, Yamaha, Ibanez and others.”
The home recording market has also been a very steady area for the Maryland retailer. “Interfaces, microphones, monitors and headphones are very popular as more and more people are recording at home on their computers or iPads,” noted Higgins. “Lines that seemed especially popular in 2014 were Audio-Technica with its digital wireless microphones, as well as the little tube amplifiers that are hitting the market, most notably from Fender and VOX. Portable PA systems also do very well for us, especially theEscort series by Peavey. Snark tuners are about as hot as any accessory I’ve ever seen.”
A Personal Touch
A stronger economy is certainly one way to drive in-store traffic. But that doesn’t mean that customers will enter your store just because they have more money. MI retailers are making strong efforts to make sure consumers walk through their doors, as opposed to those of competitor big-box retailers or turning to the Internet.
Backstage Music boosted its presence on social media in 2014. The Mississippi retailer also sold more products on the Internet through sites such as eBay, Amazon and Reverb.com, McBroom said.
But the biggest shift Backstage Music made was making a more concerted effort to shake a customer’s hand and let him or her know that his or her business is appreciated.
“We realize that customers have a choice. It takes effort on the customer’s part to drive to our store and do so during our operating hours,” said McBroom. “It takes dedication and loyalty on the part of returning customers. We realize we need to express appreciation.”
Appreciation is expressed via free in-store concerts. The retailer also takes on a host of charitable efforts. And, Backstage Music has found a big hit in its annual Spring Cleaning event, where customers are invited to sell their unwanted musical instruments and accessories in a flea market setting in the store’s parking lot.
Bill’s Music also had plenty of special events last year. “In recent weeks, we put on a clinic with PRS hosted by bass player Gary Grainger, a CF Martin clinic with Shaun Hopper and the Hohner Traveling Road Show with Ronnie Shellist,” said Higgins. “Over the summer, we had informational sessions with George Lynch, Mark Schulman, Sean Drover and others. We also went outside the box by throwing a benefit concert to raise medical funds for the son of one of our longtime employees, with the Paul Reed Smith Band as our headliner. This event drew hundreds of folks and was greatly successful.”
Competition from big-box stores is fierce, added Higgins. “We are sandwiched directly between two big-box locations that are about 40 miles apart. As much as they keep us on our toes, we feel that, with the services we offer, we can and do compete with them successfully,” Higgins said. “Our customers know that there is a pretty good chance that, as they come back to Bill’s over and over, they will get to continue their relationship with their same trusted representative. Most box stores, from my experience, have high turnover rates. Many of the employees are not as skilled or as motivated to provide excellence in customer service, which we try every day to do here at Bill’s.”
Years ago, the Sears catalog made Holloway’s dad cringe as an MI retailer. Now, the smartphone provides fierce competition, Holloway stated. “The competition is there. However, we have the most dedicated, well-versed staff anywhere. They go that extra mile to serve our customers every day. This is the true key to our survival and our success.”
Big-box retailers can only give away so much, added McBroom. “They can only cut the price so much before somebody comes in and says they need to make a profit if they want to simply keep the doors open.”
As for Internet competition, McBroom noted Backstage Music uses it as an excellent research tool. “We can’t sit around and whine about the Internet,” he said. “A doom-and-gloom attitude is self-fulfilling. We have to embrace opportunities given to us by the Internet. We have to embrace opportunities given to us by big-box retailers.”
2015: Year In Preview
To have a successful year in 2015, McBroom succinctly concluded his goals are to “remain open, turn a profit and make more friends.”
Holloway’s Music’s goal is to enjoy the business and its many rewards. “Build more and better relationships with our valued vendors. Work both harder and smarter with selling, as well as with social media. That’ll bring smiles as we reflect on 2015 at this time next year,” Holloway predicted.
“For 2015, we have many goals,” said Higgins. “First of all, it is our 50th anniversary. Bill’s Music was opened in 1965 by Bill and Nancy Higgins, who are still here every day because they love the business and the customer base we’ve established over five decades. We are very proud of our 50th anniversary, and you can expect quite a celebration.”
“On the business side, our main focus will be—and always has been—to be the best store we can be for area musicians,” he continued. “We are very excited about the quality of the staff we have here, as well as the excellent products that are continually coming out. We feel that our future is bright. Once a musician comes through the front doors of Bill’s Music, we will do everything possible to make it a fun and enjoyable experience. Hopefully, they will be a long-term repeat customer who will be with us in our next 50 years.”
Higgins concluded that the MI industry is currently very strong, with a vast customer base. “We believe that, for the business to remain strong, musicians need quality, well-run local stores to be able to visit in person,” he said. “They deserve to try out and learn about products, and to talk to qualified musicians/salespeople. Without that ability, I would be afraid customers would not be as ‘in touch’ with the products and the musical retail customer base all over the industry would shrink. We hope that the manufacturers continue to realize the importance of the independent music store to the industry.”
Holloway concluded with a different take on the MI industry, however. “Our industry is in a state of flux,” he stated.
He added, “We will see consolidations, mergers and strategic alliances that we would have never dreamed would happen. When the dust settles, those who sell direct to the consumer will wonder what hit them, whereas those who support their dealer base will thrive and prosper.”