Over the last year, many, including myself, have written much about the state of MI retail. In my attempts to draw attention to areas in which MI retail must evolve, I’ve hoped to challenge the “business as usual” attitude that has plagued our industry for so long.

As I read quotes from other MI retailers in trade publications, and as I speak to people at NAMM shows, I marvel at the varying points of view when it comes to the state of our industry, the changing tide of retail and how we, as independent dealers, can cope. Despite the retail juggernaut we all claim Guitar Center to be, and the Internet sales that have cut into brick-and-mortar store sales, independent retailers as a whole haven’t done enough to compete for business. We cling to MAP and old business models, hoping consumers will allow us to hold onto our margins, all while big-name manufacturers have begun competing with their own dealers for sales.

The longtime supposition among independent music stores is that these giants are impossible to compete with. I disagree. I believe there are a number of ways in which we can compete…and not just using the same old line: “Yeah, but we offer service.” Because we are independent, we can control the customer experience in our store, our selection of stock, our services and our prices. We don’t have to engage in a “race to the bottom.” Instead, we can buy inventory that isn’t available online or that has enough margin built into it to allow us to be more competitive, and we can adopt other practices that encourage customers to give local music shops a try.

MI retail giant Sweetwater, an independent retailer that has earned its reputation as a tastemaker among consumers and manufacturers, has fostered a culture in which consumers trust the salespeople and site information. And that’s because the quality of both has been consistently maintained since the company began. Sweetwater’s Web site is hailed as the industry standard. This independent retailer competes not only by training its expert sales staff to build personal relationships with customers in order to build trust and loyalty, but also by being competitive on price. Too often, we give away sales because we aren’t being competitive enough. Too often, potential customers choose to make their larger purchases from big mega-chain stores because they’ve been trained to believe they can find everything there for less.

If you spend time on consumer forums—something I’ve been doing more of after my op-ed about Fender went viral back in 2014—you see the term “price gouging” used often to describe retail stores. This is an especially common refrain from people defending direct-to-consumer sales programs, Guitar Center and Internet sales. It’s past time to change this perception.

The allergy to competition in MI retail must be eliminated. Consumers are more aware than ever before of how retail operates, and they are no longer easily impressed by the difference between MAP and MSRP. In this age of smartphones, consumers can Google any product to see that everyone sells it for the same price, which, therefore, renders MSRP superfluous in their eyes. In the minds of consumers, MAP is the new MSRP.

Independent retail stores have long had to deal with the public perception that, because we’re small and local, we’re more expensive. Consumers learn this not as the result of large purchases but, rather, as a result of consistent purchases of smaller, less-expensive goods. Most small stores also have higher prices on accessories, such as guitar strings, tuners and reeds. Stores that price small goods higher justify the practice by pointing to the erosion of margins resulting from competition from big-box stores and Internet retail. What those same stores are failing to realize is that, even while the guitars on their walls are priced at MAP—just as is the inventory of every Web site out there—they are losing sales based on the perception that they are more expensive. And that perception comes from their prices on smaller-ticket items. There is a growing number of manufacturers that are removing MSRP from their products and, instead, resorting exclusively to using MAP.

Competition can be a catalyst for improving the quality of our stores and the customer experience, and for holding onto—and even gaining—market share in an already-competitive industry. I believe that, by capturing a larger market share in our own areas, we can provide much-needed growth for many small, independent retailers. Yes, that growth will come at the cost of some margin; but, as my friend Brad Shreve, Owner of Larry’s Music Center, likes to say, “A smaller sale today is worth two projected sales.” Or, to put it more bluntly, you can make a profit that’s smaller by sacrificing a little margin, or you can make no profit by losing the sale entirely. We can continue to allow consumers to believe that shopping at small, local retailers will automatically be more expensive, or we can shed the long-held attitude that competing is something we can’t afford to do.

Many store owners postulate that this will lead to a “race to the bottom” that will put us all out of business. I don’t believe anyone wants to race to the bottom, or that independent retailers must give up margins on everything—especially on services and lessons, which big-box stores and Internet retailers don’t offer. I also don’t believe that customers, as a rule, will walk out if your guitar strings are 80 cents more than they cost on Musician’s Friend. However, if your strings are four dollars more, they might…and they probably will.

By being competitive, we are more likely to close a potential sale. When customers take out their iPhones to see if they can find a lower price, they’ll discover that they can buy that same guitar at their local retailer for a little less than at all the big Web sites. It’s a small sacrifice to hold onto—and perhaps even to gain—market share in our area.

Even as consumers who have grown tired of the corporate retail experience begin seeking out new ways to spend their dollars—a trend that, incidentally, greatly favors independent retail—they will continue to make purchasing decisions with their wallets. So, we must provide them with better service than our competitors do, but we also must provide competitive pricing.

How do you compete with big-box retail and Internet pricing in your store? E-mail and let me know.

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