Last year, in our guitar industry update, we declared the “the slow, secret death of the six-string electric,” as alleged in a 2017 Washington Post story, was a bunch of hogwash. This year, not only is this electric guitar decline clearly in the rear-view mirror, but we are pleased to say that the guitar industry is “kicking rear ends and taking names.” According to MI SalesTrak, overall dollar sales of guitars, including basses, roared to an increase of 5.3 percent in 2018 compared to 2017. And this follows a 2.2-percent gain the guitar industry enjoyed when comparing 2017 to 2016. Hence, these 2018 results represent two solid years of guitar sales gains, following 2016, when electric dollar sales finished the year down 0.3 percent vs. 2015, and acoustics dropped to the tune of 3.1 percent compared to the prior year.
In 2018, as the accompanying chart in this story shows (see page 30), electric guitars comprised 48 percent of guitar dollar share by type, with acoustic/electrics coming in at one-third of sales and acoustics making up 19 percent of sales.
“Guitars enjoyed robust sales growth throughout 2018,” Jim Hirschberg, president of MI SalesTrak, told the Music & Sound Retailer. “Electric guitars led the growth early in the year, with acoustics coming on strong later in the year. In total, dollar sales of new guitars (including basses) were up 5.3 percent vs. 2017.”
Looking at color trends for electric guitars, as the chart on page 32 shows, sunburst was the most popular choice early on in 2018, but black was the most popular color in April, and also during the all-important holiday season of November and December. Red was the third-most-popular color, with blue finishing fourth.
“Black is back,” said Hirschberg. “Sunburst finishes were the most popular choice for electric guitars in 2017. But by November/December of 2018, black was again the most popular color.”
To get their take on guitar sales in 2018, as well as the early stages of 2019, we enlisted the help of several manufacturers. Joining us are: Yoh Watanabe, director of marketing, Pro Music division, Yamaha Corp. of America; Fred Poole, general manager, product development, Peavey Electronics; Ken Fuente, general manager, North American sales and business development, Peavey Electronics; Tom Appleton, sales strategist, guitar and electronics for Hoshino USA; Jim Cullen, director of sales for PRS Guitars; Tammy Van Donk, executive vice president sales, Americas and EMEA, Fender Musical Products; Max Gutnik, vice president, Fender Electric Guitars, Basses and Amplifiers; and Billy Martinez, vice president, category manager, Acoustic and Squier Division for Fender Musical Instruments Corp. (Also, check our “Five Minutes With” interview with C.F. Martin’s Chris Martin IV in this issue on page 40.)
Let’s kick it off by seeing if manufacturers agreed with MI SalesTrak data that 2018 was quite strong regarding guitar sales. In one word, the answer is an emphatic “yes.”
“Yamaha guitar sales were strong in 2018, and we are thrilled with the results,” said Watanabe. “Sales of our A Series acoustic-electrics, as well as models featuring TransAcoustic technology, sold well during the holiday season. We’re riding the wave of enthusiasm for these products, and we anticipate that this will continue through 2019.”
“2018 was a great year with strong double-digit growth in electric guitar sales,” stated Van Donk. “Holiday 2018 was a record-breaking season for us across all categories and retail partners.”
“We had a very strong 2018,” responded Appleton. “Starting in January, sales were through the roof and continued [to be] throughout the rest of the year. Even the typical slow summer period saw us posting considerable increases. All indications pointed to a strong holiday season for our dealer base, as they were ready to bring in our new lineup as soon as it was released.”
“Our guitar sales were very good,” he added. “In fact, we saw double-digit increases, which is exceptional considering the growth we saw last year.”
“Sales-wise, 2018 was the strongest year we have seen as a business. Yes, we were quite pleased,” stated Cullen. “The holiday season was quite strong, but that came with a lot of work and help from our partners. We had some nice product releases in November, but we also had some hiccups with introducing a new ERP system in the beginning of the fourth quarter that slowed down the ship a bit. As failure was not an option, we put in a lot of additional hours to be able to just slightly exceed our goals for 2018. That could not have been done without the strong support of our retailers, distributors, field reps, employees and customers. Thank you for standing by us!”
Focusing on the types of guitars that sold best, electric guitars led the way, followed by basses and then finally acoustics, said Appleton. “It is hard to pinpoint exactly what is going on with the market. We’ve all read articles proclaiming that the electric guitar is dead, but I’ve always disagreed with that sentiment. Electric guitarists by nature are collectors, and most own several — if not a dozen or more — instruments. It is of my opinion that, during any economic downturn, you see less electric sales primarily because they are making do with what they have. The economy has been steadily improving over the last eight years, and we are seeing consumer confidence once again at all-time highs. As long as the economy is strong, I have no reason to believe electric guitar sales will be slowing anytime soon.”
“We introduced the new John Mayer Signature model [the Silver Sky], so bolt-on/single-coil guitars were up for us,” answered Cullen. “To be fair, this was essentially a new business/market segment for us, so while we certainly stirred the pot with this introduction, it has grown into a great success story. The MT 15 amplifier also did extremely well for us last year. Really, all categories saw growth, but those two products really stood out. On the acoustic side, we released a bunch of new colors and features on our SE Series Acoustics for 2019, and that has been going extremely well.”
“My guess is the attention we put into the details [is a big reason for success], which translates into the overall quality of the instruments,” he added. “I’ve said this same thing so many times, please excuse me if you’ve heard it before. We are focused on making great instruments, which in turn is building a strong brand, but we don’t really look at ourselves as a ‘brand’ first. It is important that we remember we are guitar makers as our footprint grows and strive for greatness our children’s children will enjoy.”
“Electric guitars continue to be our greatest growth category,” added Van Donk. “Our mid-year launch of the Player Series in June of last year has been a tremendous success and widely popular with consumers and dealers alike. The Players Series replaced the Standard Series and is the new foundational offering and first official step into Fender’s electric guitar product lines. Built for players who dream of taking their art to the next level, these guitars have a signature sound and classic look that only Fender’s iconic models can provide. We are still catching up with delivering post-holiday orders as this series played a big role during gift giving season. We also launched American Performer in December, pre-NAMM, to allow our retailer partners a new series to offer consumers during the prime holiday season. This series provides a great price point to consumers as they step into our American-made Corona line.”
She continued, “Our consumer marketing continues to be a strength for us. Add that to the success we are seeing with Fender Play, and we have many factors supporting our growth and the market overall. We believe Fender Play plays a strong role in our market and driving an increase in guitar sales. Our research shows once a player gets through the initial 90 days and through the abandonment phase when learning to play a guitar, they are a player for life. Those then purchase up to 10 to 12 guitars in their lifetime.”
Stated Watanabe, “We seem to have hit a sweet spot by making high-end quality and unique features available within the $500 to $1,500 price range, especially for acoustic-electrics. The feedback we’re getting from our customers is that when they hear our A Series guitars and the models with TransAcoustic technology — especially when listening objectively against other brands’ products — they are pleasantly surprised by the benefits of Yamaha guitars.”
Of course, many of the products previously mentioned were released at The NAMM Show. We asked our panelists how the show went for them and to expand on products they launched.
“Our marketing and operations teams delivered a booth that once again exceeded our dealers’ expectations and set the stage for a great show,” answered Van Donk. “We are continuing to set the bar high and deliver new experiences each year. Our artist relations team also secured numerous artists to perform throughout our time at NAMM as well, which added a new element, in addition to our new production introductions. As a result, we left NAMM with record-breaking sales coming from all regions.”
As for products Fender launched at The NAMM Show, Martinez immediately pointed to the American Acoustasonic Series. “The American Acoustasonic Telecaster is an entirely new guitar that is appealing to both acoustic and electric players. Its versatility allows for multiple new sonic experiences in one guitar that the market has never had available. We will continue to pursue product innovation in all areas of the company, and we are excited to see the overwhelming positive and enthusiastic response to this new guitar platform.”
“Booth traffic seemed up from last year, driven by several exciting Peavey and Trace Elliot product launches,” said Fuentes. “In addition to Peavey dealers visiting our booth, our Crest Audio division participated in the Loudspeaker ‘shootout’ [System Showcase]. This new event provided us an additional forum to showcase our products to dealers who might not otherwise visit our booth. Our new product launches were well received at both locations.”
Added Peavey’s Poole: “Playing on the success of the Trace Elliot ELF bass amplifier, which has been the best-selling bass head arguably in the industry, we launched two new Trace Elliott Combo bass amplifiers. These bass amplifiers are not only among the smallest and most portable bass amps on the market; in the tradition of Trace Elliot, they sound amazing. It’s difficult to make a tiny bass amp sound like its larger counterparts, but the Trace Elliot Combos deliver. On the guitar amp front, the invective.120, designed in collaboration with Misha Mansoor, has been an amazing success. In 2019, we launched the invective. MH, a remarkable low-watt, portable version of its big brother. Orders for the invective.MH have already exceeded expectations. Always known for innovation in sound reinforcement, Peavey was proud to introduce the LN 1263 at NAMM. This extraordinary new portable column array provides guitar players, singer-songwriters, and all calibers of musicians a portable sound reinforcement solution that is more powerful and lighter in weight than its competitors. Complete with iOS Bluetooth streaming and control, this exciting product drew a lot of attention at NAMM.”
“We had a fantastic NAMM,” responded Watanabe. “Yamaha launched the ‘Make Waves’ campaign at this year’s NAMM Show, and, as a company, we want to continue to empower our customers to Make Waves with their music and sound. Specific to guitars, we had more dealers and other visitors than we’ve had in the recent past, so we were happy to tell them about the innovative features and high quality of our guitar products. It’s always great to see and hear people trying out our guitars and amps. We got a lot of compliments on our booth, especially related to the special listening space we set up so our visitors could try out our acoustic and TransAcoustic guitars for themselves and hear them clearly.
“The CG-TA and CSF-TA are definitely our most significant NAMM launches and are likely to get the most love as they expand our TransAcoustic technology into classical and parlor guitars,” he added. “In addition, the limited-edition Revstar electric guitars are really exciting for us as they expand upon the foundation that the existing line established. They give players even more options for producing unique tones, and frankly, they just look cool.”
“[We were] quite pleased with the traffic,” said Cullen. “We’re definitely going to need a bigger ‘boat!’ Because the show is turning more and more into an end-consumer event, it changes how we present ourselves a bit. Most retailers are only there Thursday to Saturday, so we closed the booth from 9:30 to 11:30 each morning to try to cater to them. When the booth was open to everyone, it was so full, it was almost hard to do business.”
Regarding PRS product launches at The NAMM Show, Cullen said, “Looking back, in 2018, we launched the Silver Sky, which basically opened up new business opportunity for us. That same year, we introduced the MT 15 amplifier. These signature products were both huge success stories for us. This year, we announced an updated Core Paul’s Guitar and also an SE version of this model for the first time. To have our namesake be a guitar player who is still heavily invested in the day-to-day business is rare and something we are very grateful for. It’s great to have his signature model available in a wide range of prices. What better way to get to know our company than by playing the man’s signature guitar? We also introduced a new SE model with Carlos Santana, who played a huge role in starting our company. We were very proud to have him at our press conference this year speaking to about why he chooses to work with Paul and PRS. Looking forward, our 35th anniversary is coming up in 2020, which is a great opportunity to show the world even more creative diversity of our product offerings.”
“Attendance for us was up slightly over last year, and the booth was very busy,” answered Appleton. “It is always a pleasure getting to see all our friends in the industry, and this year was no exception. We introduced so many new products that it is always hard to narrow down what are the most important launches. In our electric line, we introduced the Axion Label series. Axion Label, like our Iron Label series is geared toward the progressive metal player but offers even more features. We currently have three different body styles (RGA, RGD and S Series), and all come with either Macassar ebony or Birdseye maple fretboards, sub-zero treated frets, branded pickups (Fishman Fluence, Bareknuckle Aftermath or DiMarzio Fusion Edge), Schaller strap locks, Gotoh MG-T locking tuners. Luminescent side dot inlays and a five-piece Panga Panga/Walnut Nitro Wizard neck.
“In basses, we’re pretty excited about the SR Mezzo series,” he continued. “Based on our fast and easy to play Soundgear series, the SR Mezzos feature 32-inch medium-scale necks which are very well suited to those with smaller hands. The SR Mezzo is available in several attractive finishes and has been very well received by the market thus far. As far as acoustics are concerned, we just released a new electric-acoustic subset of our Artwood line designed with a minimalist approach. There are three models in the new Artwood Unbound line, a Grand Concert, a Dreadnought and a 12-string Dreadnought. They all feature a polished forearm contour for natural finish, solid spruce tops and bone nut and saddle. With its open-pore finish and laser-engraved rosette, and lack of body binding, there’s nothing to tame the natural vibration of the wood, and the tone is incomparable. These guitars really sing.”
Signature series models have also been an important part of manufacturers’ repertoires. We asked our panelists the importance of such models for their companies.
“We have a long history of signature models going back over 40 years,” answered Appleton. “This year, we’ve introduced almost a dozen new signature models. There have been several additions to the AZ line with signature models from Andy Timmons, Marco Sfogli, and new signature artists Tim Henson and Scott LePage of Polyphia, along with Mario Camarena and Erick Hansel of Chon. We also added new premium models for Steve Vai and Jake Bowen. Luke Hoskin of Protest the Hero just got his first signature model with us and Joe Satriani’s Chrome Boy has entered our regular lineup. At this point, it’s hard to say how well they’re doing, but the initial reactions from our dealers and consumers has been very good. I would like to mention that in 2018, we introduced the Nita Strauss model, which has done very well.”
Signature models have been fantastic sellers for PRS, noted Cullen. “We are proud of our alignment with these artists, and I think that shows in the products we collaborate on.” He added that end-user excitement has been strong for such products. “I think the artist alignment adds another layer of validity to the products that people can really connect with.”
“Our invective.120 amplifier designed with Misha Mansoor has been an incredible hit,” stated Poole, “so much so that we launched a mini version of that head this year at NAMM. Unlike some of our other traditional high-gain amps, this amp has much broader appeal due to its clean and tight settings, opening up a wide range of potential customers.”
“For Yamaha, these are premium models, and they have a prestigious place in the market,” said Watanabe. “We have several signature series guitars and basses in our lineup, and they certainly solidify our position as a guitar brand that incredibly talented players have confidence in and want to be associated with. Whenever we produce one, it generates a lot of interest.”
“Signature products perform very well and are some of our most anticipated product launches each year,” noted Fender’s Gutnik. “Eric Clapton had the first Fender signature Stratocaster, followed by Yngwie Malmsteen, which are the two longest-running signature guitars in the lineup. Other popular signature artists over the years have been Jeff Beck, The Edge, Stevie Ray Vaughn, Jimi Hendrix, Eric Johnson, Brad Paisley, Ed O’Brien, Flea and even our youngest signature artist in Fender history, Grace VanderWaal, among many more.
Our most current signature, the Jimmy Page Telecaster, has a great story behind it, from the Yardbirds with Jeff Beck, to Jimmy Page on Led Zeppelin and classics like ‘Stairway to Heaven.’ When you have a historic guitar, like Jimmy’s Telecaster, or Clapton’s Blackie, customers love to get their hands on it, capture some of their favorite artist’s mojo or just thrill in the chase for great tones. Each signature guitar is a milestone in the history of guitar music, whether it’s a guitar, bass or amp. The signature is relevant because the artist has contributed something special, and we love being a small part in celebrating that.”
Also positive for the industry are 2019 sales. Respondents were quite positive about sales thus far this year.
“Yes, quite pleased. Again, it’s not possible without all the support we receive,” said Cullen. “The year is looking to be another strong one for us as we ramp toward our 35th anniversary. We have several launches teed up throughout the year spanning over multiple categories. Typically, we have more ideas than capacity to bring them to market, which has forced a much-needed discipline within these walls.”
“We are on track to have an outstanding 2019,” added Peavey’s Fuentes. “Proactive customers seem to be optimistic, and we intend to work with those accounts to maximize our mutual business.”
“It’s a little early to say objectively how pleased we are with sales thus far this year,” noted Watanabe. “However, having just announced two new models with TransAcoustic technology — the CG-TA and CSF-TA models — we have every reason to expect our previous success to continue. Based on the feedback we’ve received from our dealer network, we’re well positioned for the future.”
“We’ve been happy with the results thus far,” said Appleton. “Being this early in the year, it is still hard to tell how the rest of the year will shake out. January, however, was much stronger than last year, and incoming orders have been great, so we are well poised for another year of tremendous success.”
“We expect to see double-digit growth again in 2019,” stated Van Donk. “With the lineup of new products we presented during The NAMM Show this past January, and more on the way midyear, we are hopeful for another record-breaking year.”
Keeping on the 2019 theme, we asked our respondents what we may see from their companies the rest of this year.
“It’s fair to say that NAMM was just the beginning this year for Yamaha Guitars. We will have more products to announce as the year progresses and we will be active at several events,” responded Watanabe.
Said Poole: “Continuing our dealer education will be high on our agenda this year. It’s important to Peavey to make sure our dealers have the information and education they need to be successful selling Peavey products. In addition to our seminars in Meridian, Miss., Peavey has plans to take the show on the road to our dealers and will continue to increase our commitment to educating our customers.”
“As you are probably aware, our merchandizers and designers never rest, and in my opinion, they are the best in the business,” noted Appleton. “There is sure to be a bounty of exciting new releases coming. However, I am not at liberty to discuss any of these new releases at this time.”
“We are continuing to have a strong focus in our electrics category, adding a few limited-edition roll outs with the Alternate Reality and Rarities collections,” said Van Donk. “We also have six new effects pedals and numerous amplifiers launching as we continue to expand the Fender signal chain. Lastly, keep an eye out for more news on the digital front.”
And responded Cullen: “Our goal is to continue the vertical integration of our products; growing our strongest product families through new price points with a focus on the best quality, period. As for events, our Experience PRS event is every other year now, so we look forward to hosting that in 2020. This year, we’ll be out with ‘The Music Experience’ at a good amount of festivals. We also have a slew of dealer events and some regional shows we are attending, all of which can be found on the event page of our website.”
As awesome as many of these products are, MI retailers still need to sell them effectively. We asked our panelists to provide their best retail sales advice.
“There are unlimited resources for product information, and today’s consumers are better educated about products than ever before,” answered Fuentes. “Retailers and their salespeople must be able to speak honestly and skillfully when communicating with them. Peavey Electronics is coming up on our 54th anniversary, still owned by Hartley Peavey. We continue to come out with the most innovative products on the market. Take the time to make sure you understand the breadth of our offering so you will be able to inform your customers about our products and how they compare to the competition.”
“I strongly encourage our retail partners to take advantage of Fender Academy, our online training tool geared toward educating retail associates around new products arriving in store,” advised Van Donk. “Our data shows retailers encouraging active participation in Fender Academy are showing higher growth than retailers who do not. It makes sense to have a highly informed sales staff who understands the selling points of our brand.”
“We have probably the most breadth and depth of any MI company in the market right now,” stated Appleton. “We have something for everyone, and we also have many products that are designed for specific jobs which can’t necessarily be found in other brands. Guitars, whether they are electric, bass or acoustic, are essentially tools for musicians. We make the proper tools for the proper job at all levels of musicianship, from the beginner to the professional.”
“Education!” Cullen exclaimed. “Education equates to confidence, which leads to an increase in turn. Sales is the transference of enthusiasm. Confidence makes it easier to be enthusiastic.”
“Yamaha emphasizes sound quality, so your customers need an opportunity to play and hear our guitars to truly be able to experience the fundamental differentiating value,” said Watanabe. “Let them plug in, especially our acoustic-electric models, so that they can hear the full range of benefits they get from Yamaha guitars.”
To wrap up our guitar feature, we asked our respondents to glance outside of their companies. Are they optimistic about the overall guitar industry today?
“Absolutely optimistic! There has been a whole lot of chatter around the guitar dying by some people, but we have not seen it,” asserted Cullen. “We have seen significant growth during the last two years, and it looks like we are poised to make that happen again in 2019. The challenge is to keep PRS ‘front of mind’ through everything. We need to answer the ‘Why PRS?’ question without anyone asking us. As I said earlier, education on what makes us different or unique combined with good-old-fashioned high-quality guitar building is paramount. People buy with their eyes first. If the guitar looks cool, you’ll want to pick it up. Then they buy with their hands. If the neck feels great and it balances well, you’ll want to plug it in. Then they buy with their ears. If it sounds great, you just bought yourself another guitar, in theory anyway. Point being, if we can hit those three senses, hopefully observations on attention to detail follow, and we have the opportunity to develop a lifelong customer.”
“We’re in an interesting place,” said Watanabe. “Data seems to indicate that the industry is growing slowly overall. Without delving deep into the underlying implications, it appears that the industry needs to make a concerted effort to engage new players. While this is nothing new, the data suggests that there hasn’t been much traction in this area. Given that most people in the guitar industry are aware of the situation, there is reason to be cautiously optimistic that breakthroughs are possible.”
“People have lamented the lack of guitar heroes for years, but I’m not seeing any shortage of kids that want to play,” responded Appleton. “Music school franchises are cropping up everywhere, and I know that many of our dealers also have robust lesson programs. As I stated earlier, I think the slump we faced after the 2008 financial crash was more about economics than interest in music. As long as the economy is on the right track, I don’t think we’ll be seeing a major shift anytime soon. I am optimistic we’ll have another great year in 2019.”
“Our industry is growing. I am extremely optimistic,” said Van Donk. “Music consumption from live music to digital streaming is at an all-time high. Live Nation recently reported that last year alone 100 million fans attended a live music event. In terms of Fender, we are doing a good job at being a contemporary provider of product and a contemporary marketing partner as well. We have stepped up our game in terms of marketing investment, dealer focus, and more to appeal to expanded audiences, genres and more female artists, which has been paying off.”
Before we go, we asked our panelists if they had any parting notes. Here is what they said. “Passion. Passion is a part of our moral fiber at PRS, and the crew here is passionate about making the best products [guitars, amps and accessories] we can,” stated Cullen. “We try hard, and we [make sure] we’re doing our absolute best and continually asking ourselves how we can make it better than it is right now. It’s a blessing and curse, but it’s what we do. We are a group of guitar builders, and our focus is making magical instruments to inspire and create with. We obviously focus on other things to keep the business running, but at the heart, it is making heirloom-quality instruments. That mantra runs deep in our veins and into all of our products from Private Stock on down.”
“Our commitment to providing innovative, quality products from analog to digital is expanding by the day,” said Van Donk. “We are always looking to set new standards of excellence across the brand and are grateful to have such strong dealer partners as we go through this journey.”
“We look forward to having a great year and we thank everyone for their support,” responded Watanabe.
Concluded Fuentes: “The industry is counting on you. Stay relevant. Develop your niche. Focus! Know what you do best and hone it. Be mindful and see to it every one of your customers is taken care of. Owners/managers: lead by great example. Rediscover the affection that brought you into the business to begin with. Lastly, in today’s retail environment, our customers have options. Make sure you are option No. 1!”