Having just returned from Las Vegas and the InfoComm trade show—an exposition centered on the commercial AV market, but which includes a large number of pro-audio and live-sound companies—I have the amp and speaker segment of our market very much on my mind. And it seems like a lot of you, our retailer readers, do, too. The days when a full-line, brick-and-mortar music store could overlook pro-audio gear and focus solely on guitars, drums, keyboards and accessories are likely over. Nowadays, Internet giants like Amazon and big-box behemoths like Guitar Center have trained consumers to expect their favorite retailer to stock every category. And, truth be told, selling, renting, installing and servicing pro-audio gear is a great way for music retailers to boost their profits.
This month, we feature three articulate, well-informed voices, who discuss the ins and outs of the amp and speaker business. Our participants are Tim Marshall, Yorkville Sound’s Marketing Manager; Courtland Gray, Peavey Electronics’ COO; and Craig Lambrecht, HARMAN’s Speaker & Amplifier Product Manager.
The Music & Sound Retailer: Looking from a manufacturer- and brand-agnostic point of view at the amp and speaker segments, analyze the trends that you’ve observed over the past 12 months as it relates to the features and benefits people are seeking out. Are particular types of amps and speakers in ascendance? Are other varieties in decline? What are the key takeaways relative to trends?
Craig Lambrecht: As we have all seen over the past 10 years, there continues to be a trend toward powered speakers in the market. Naturally, combining the amplifier and the speaker for most solutions has made it easier for both the sales channel and the end user to have the best solution. Beyond the obvious trend toward powered speakers, people are placing a higher value on the looks/visual appeal of the products. More and more, they are being used in places where you don’t want your audio equipment to stand out. Another trending factor is that, now more than ever, consumers are demanding products that are easy to set up and use, and that are portable. Lastly, people are focused on integrating with consumer devices like tablets, so you can stream audio and control the audio experience, as well as notice problems or make changes, without having to be right next to your equipment.
Overall, the market is looking for products that are better looking, easier to use and more portable; that allow the user to plug into consumer functions like Bluetooth; and that have a way to interact with the system away from the speaker or amplifier itself.
Courtland Gray: You can’t deny the continued growth of the powered speaker market. I think that, as with most things, people are looking for easier solutions. Eliminating a single point of failure with a power amp is a plus for many users. Having a power module designed for the specific speaker results in peak performance and, in theory, better sound. Additional DSP features can give the novice user an opportunity to walk into a venue, set up fairly easily and sound pretty good. These days, the overall cost of ownership is typically going to be lower with powered speakers, as well. That being said, we have seen more pro-oriented people go back to their passive systems to gain more control.
Tim Marshall: We’re seeing strong growth in the compact, all-in-one systems with integrated mixer, effects and speakers as a unit…especially with regard to anything that’s scalable. It might be a function of the versatility, or it might be that artists are doing a wider range of small events in diverse venues and they want complete, compact, simple-to-use solutions that are easy to transport and set up.
We’re experiencing a decline in large-format passive cabinets and separate power amplifiers/powered mixers. Even though a small, powered box mixer and a pair of lightweight passive cabinets is still the best solution in a lot of applications, it seems that the trend is powered cabinets in almost all cases.
We’re even seeing powered cabinets slipping into installations and club systems where, once again, passive boxes would still seem to make more sense. However, the customer demand is for powered boxes.
The Retailer: Many of the independent, brick-and-mortar music store owners in our industry come from a background that’s centered on musical instruments proper, as opposed to live sound or pro audio. That being the case, what’s your perception of the “learning curve” for indie guys to sell amps and speakers effectively? How can brick-and-mortar music stores sell amps and speakers better?
Marshall: The truth is, our strongest and most successful dealers have always been music stores with some PA presence. We are a PA company with a strong retail background and a strong rental business. So, we are immersed in PA from manufacture, to delivery, to the end user. There is huge revenue in what I refer to as “MI PA.” And PA, especially nowadays, isn’t that intimidating…and it never should have been for music stores.
Any instrument-centric store that’s not carrying small mixers (powered and unpowered), small PA cabinets (powered and unpowered), and a mix of good vocal microphones, cables, DI boxes and stands is giving away market share, margin and opportunity for profit. If you can sell electric guitars, bass amps and basic keyboards, but you don’t have a small PA business, you’re not going to be an entirely successful music store.
Have basic systems in stock. Be in a position to demonstrate them and walk customers through the setup. It is critical, when closing the sale, to have product that is ready to go. I can’t stress that enough. If a customer made the effort to come into your store to hear the system—to be sold on the system—it’s fatal to direct him or her to put product on order for future delivery. Once he or she is home, goes online and sees the opportunity to order the same model and have it delivered in the same timeframe as you—the local dealer—can offer, you’ve lost the sale to the convenience of free, immediate, to-the-door delivery.
Lambrecht: The learning curve in today’s market is easier, as we continue to move toward powered speaker solutions. However, it’s also more difficult to understand what you are really getting for your money, as not all wattage and SPL is equal. One of the biggest challenges—and advantages—that I see for brick-and-mortar retailers is to learn about the differences between solutions, and then to present the “value” of why one works or sounds better.
The reason I say that’s also an advantage is that brick-and-mortar locations can demonstrate to the buyer why a solution sounds or works better. That demonstration gives the brick-and-mortar salesperson a better chance to sell higher-priced, higher-margin products because he or she can demonstrate the “value” through the listening experience.
To me, better selling means providing a better experience. So, any time a brick-and-mortar dealer can set up an environment that offers an experience to the user, including sound demos, the dealer has the ability to understand what’s being sold and to sell a better solution that’ll last.
Gray: The learning curve is not that hard, but you do have to learn. If the salesman doesn’t know what he is selling, then the customer is going to have a bad experience. That could reflect poorly on the brands sold and the store itself. That’s the reason Hartley started the Peavey training seminars so many years ago. He was at a club with a one-man band and the audio sounded horrible. He went to see how the guy set up his system. He asked about it, and the guy grumbled, snorted and pointed to the mixer. Hartley looked down and cringed when he saw the logo. Then, he checked out how it was set up. He saw that the musician had adjusted just about every knob to make it sound as bad as it possibly could. Hartley realized the dealer didn’t know how to teach the customer how to use the gear. As is human nature, the musician thought it was the manufacturer; in fact, though, it was an uneducated dealer and user that created the sound. Hartley knew dealer training was the key to having educated users.
Every band is going to need some amps and speakers. If you are familiar with musical instruments, and if the people who shop at your store are buying guitars and whatnot, why wouldn’t you sell them amps and speakers?
Make sure your products are demonstrable! Set up the speakers and amps so that people can hear them. Bogus specs and pretty boxes don’t let customers hear what the products sound like. If you keep expanding your customers’ interests, so, too, will you expand their needs.
The Retailer: In light of Internet-based competition and shrinking profit margins, many brick-and-mortar stores are exploring new revenue streams, such as those from rental programs and basic installation services. Relative to indie stores that stock amps and speakers, what would be your advice as it relates to ancillary programs such as those? Are they a good option for your average brick-and-mortar MI store?
Gray: Peavey has been preaching this to dealers for a very, very long time. Rentals, the install business, lessons and repairs are all things Peavey has encouraged its dealers to do over the years. The advantage an indie dealer has over the Internet is the ability to offer services that online companies can’t. If you can spec and install a system, you are far more likely to guide the customer to purchasing items from you. The added customer interface you get by having a rental program gives you a leg up on the online stores, because the customer is coming in twice for each rental. Rentals are also a good way to increase casual accessory sales. If you stock the replacement speakers and diaphragms that are needed, you’ll likely get that sale. But, since you know something about amps and speakers, and you taught the buyer how not to blow up his system, he might not need any. Keep some spares on hand, though, to serve the guy who ordered his over the Internet.
Marshall: Rentals have always been an essential pillar of our business model, and we have always geared our products—right from the initial design—to being “rental friendly.” By that, I mean not overly complicated, and built for maximum ruggedness and reliability. So, rentals are in Yorkville’s wheelhouse.
We have run in-depth rental training and we’ve assisted our dealers in setting up successful rental operations, because we believe so strongly in rentals as an essential revenue stream. It’s a service that online retailers or big-box stores cannot provide. Rentals offer constant customer contact, bring people to your store on a regular basis, offer additional sales opportunities and generate immediate revenue from the rental activity. Rentals also create a good mix of used inventory that can be sold from your rental inventory down the line. Online dealers and big-box stores can’t offer or compete with that.
The same is true of basic installation PA, which, again, is something we encourage. And we offer a line of basic, install-friendly product. It’s absolutely a business that any music store should be prepared for and encourage. Installs—especially in smaller venues, restaurants, churches, etc.—can be fairly straightforward projects and, again, they’re something that online dealers can’t support.
Lambrecht: Brick-and-mortar retail will always have a place in the marketplace, especially in an artist-driven market like music. Ancillary programs are obviously more and more important in terms of driving more traffic and added revenue. That being said, though, I don’t believe that that’s a one-size-fits-all approach for all brick-and-mortar shops. What I mean by that is, what works for one might not work for all. And, sometimes, to add more is a distraction from your core business. To assess your local market and its competitors—whether for rentals or for installation-service programs—is very important in any market.