Although we cover the accessories category every year in our November issue, our look at the segment feels particularly timely this year, as more and more retailers proclaim that accessory products—bags, cases, stands, picks, strings, sticks, tuners, capos and more—have become genuine profit centers for their stores. To ensure that The Retailer spoke to “best of breed” dealers, we approached accessory powerhouses such as D’Addario & Co. and TMP/On-Stage for suggestions as to which retailers have fully grasped the value proposition that accessories present. Our interviewees’ insights, we hope you’ll agree, will enable their fellow dealers to maximize the profits that add-on items can deliver.
Generously offering their perspective are Phil Rich, Senior Vice President of Merchandising, Sweetwater; Kyle Ware, Merchandise Manager – Combo, West Music Company; and Mike McAfee, Tone Guru and Secret Sauce Chef, Maxwell’s House of Music.
Unsurprisingly, all of the participants agreed that, during a time when the broader MI market has been somewhat flat, accessory products remain a bright spot. McAfee explained, “As avenues of availability have increased for our customers, the accessory department has been keeping our ship sailing. The growth has been massive, and it’s made us front of mind with our customers as the economy has improved, because they know we’re staying on top of what’s new and cool.” Accessory sales, McAfee noted, have served to seed the growth Maxwell’s House of Music is currently enjoying.
So, what is it about accessories that makes them a robust profit center for brick-and-mortar MI stores? According to Ware, “Accessories are consumable. Sticks break…strings get dull…picks get lost. And, just like you might try a different brand of cereal, players are more willing to try different brands and gauges to find that perfect or different tone.” He noted that it’s cheaper to grab a few new add-ons than to invest in, say, a new guitar. “People will throw on a different set of strings or try a different pair of sticks,” he added. That gets people back in the store and up to the counter, generating register rings.
The frequency of trips for accessory products and the immediacy of players’ needs can cut both ways, though, if a store fails to stock properly. “Accessories aren’t much different than any other category with regard to capturing sales, with one major exception,” Rich stated. “That is, you can never, never run out of inventory on accessories. I think most retailers know that, but they don’t necessarily execute it very well.” Related to that point, Sweetwater seeks to have an especially wide assortment in a few key categories of accessories, thus becoming a destination for those products.
Asked about the strategies they employ to maximize their profits from accessory products, our respondents offered different, but equally valid, ideas. For West Music, it’s location, location, location! “If all your accessories are cluttered around the register, it’s hard to know what you need or even what you’d want,” Ware said. “Planting accessories near the products they work with allows the customer to see what can be added and, furthermore, it opens the door to bundling opportunities.” Cables and mic stands should be near the microphones, he suggested, with straps, tuners and capos near the guitars.
McAfee explained that his store avoids pre-fab displays, choosing instead to stand out by creating its own. But the most important factor, he said, is the personal touch that only a community music store can offer. “Our strongest tool in maximizing our accessory business has been hands-on demos to every person who walks into our store,” McAfee stressed. “The face-to-face interaction generates not just the sale, but also loyalty; customers remember we showed them something to make their musical life better.”
Meanwhile, Rich turned to the difficulty inherent in trying to chase customers to the lowest price. “We know we’re not going to be the lowest price on a lot of accessories,” he admitted, “so we pick our battles very carefully.” Sweetwater’s strategy centers on the conscious decision not always to be the lowest price but, rather, to offer discounts for buying larger quantities. “The only way to make any real money selling accessories is to sell every customer more than one,” Rich declared.
Every brick-and-mortar retailer knows the importance of getting decent margin points on any product it sells. That’s why The Retailer asked our participants whether low-price/high-margin should be the name of the game for MI stores at a time when the brick-and-mortar model faces unprecedented—even existential—challenges. “It would be better than the alternative that seems to be taking place currently, which is low-price/low-margin,” Ware chuckled. “Margins do keep everything going, but, instead of talking low prices, I think we need to make sure that quality is not sacrificed and that pricing is fair.” He noted that, as prices race to the bottom, quality can fall by the wayside, causing customers to lose confidence.
McAfee largely agreed, saying, “As much as I’d love every accessory we sell to be low-cost/high-margin, it’s unrealistic. Offering our customers a sensible selection of in-demand items is what keeps them coming back.” Rich took the same customer-focused tack, commenting, “At Sweetwater, we want to serve every need the customer has, whether it’s for an SSL console or the guitar strings they need every three months. When a retailer has a relationship with the customer, and they can meet an extremely high percentage of the customer’s needs, that retailer will hold onto them tightly, and vice versa.”
One of the challenges in generating profits for brick-and-mortar retailers is that musicians might view accessory products as being different from instruments themselves. Many guitar players wouldn’t buy a new ax without playing it first; however, those same guitarists probably don’t need to open up a pack of strings before buying them. Does that push accessory sales to Amazon instead? According to McAfee, “Even loyal customers find themselves shopping online, and I understand it. We strive to make ourselves the first musical thought our customers have. So, we promote ourselves heavily through direct contacts, such as phone and e-mail, and via social media outlets that include Facebook and YouTube.” Crafting a relationship, he reemphasized, is necessary to survive, let alone thrive.
Rich agreed enthusiastically, saying, “If local, brick-and-mortar stores can keep the right accessories in stock and get to know their customers better, they can beat Amazon. It’s not always about price!” If customers love to deal with their local store, he added, then many will gladly pay a bit more to buy locally. “And you have to give customers a reason to visit,” Ware implored. “Let them try out that new instrument that came in. Then, ask if they need new strings or heads. Online sellers can’t offer that. Pictures and videos can’t take the place of physically picking up a brand new instrument.”
For Rich, it’s important for dealers to realize that, far from just selling a pack of strings after a customer plays a new Strat for 30 minutes, product category interconnectedness can spur sales in both directions. “Doing promotions on accessories is a great way to get customers to look at the rest of your assortment,” he stated. “If we’re going to do a promotion with accessories, it’s critical that we do a great job informing the customer of all the other great products we offer…that we tell them our story.” He concluded, “Accessory sales are seeds for the bigger sale.”
Dovetailing with that sentiment, the temptation often exists to “throw in” accessory items to seal the deal on a big-ticket instrument sale, such as a high-end electric guitar or an acoustic drum set. Ware evinced mixed feelings about the tactic, remarking that it can be useful, particularly when the items are those the customer might feel aren’t needed, but that can help protect his or her instrument or improve his or her playing experience. “But,” he added, “unless you’re willing to commit to it every time, you really need to pick your battles.” Others, like McAfee, are more categorical in their stance. “To us, the ‘sweetener’ is to make sure our customers leave knowing they have access to us at any time,” he declared. “The fact that we truly care for the people we serve has done more to strengthen our relationships than throwing in any piece of gear could.”
According to McAfee, although the value proposition that accessories present is undeniable, there are also pitfalls if a dealer approaches the category the wrong way. He said, “It’s easy—and dangerous—to take accessories for granted. Our industry spends so much time focusing on the big-ticket items that the little stuff we all rely on to keep the inspiration flowing can get overlooked.” When buying potential add-ons, a dealer must have a plan to move them. “Without that,” he stated bluntly, “you’re just spending money.”