Manufacturers Discuss Pressing Issues That Face The Guitar Market
Fitting with The Retailer’s well-established Guitar Issue theme for our April issue, we present this month a roundtable discussion that features four of the most prominent, well-respected members of the guitar-making community: Alvarez Guitars, D’Angelico Guitars, Ibanez and PRS Guitars. This year, instead of asking the companies about their latest and greatest wares, we sought their objective analysis of the music products industry’s guitar segment. At a time when there are very few “rock gods” on the Billboard charts, what can guitar manufacturers do to cultivate the next generation of guitar players? How can brick-and-mortar retail stores boost their sales numbers for both acoustic and electric guitars? In short, how can we work to create a bigger, more robust guitar market in the years ahead?
Participating in our roundtable discussion are Senior VP with Alvarez Guitars, Chris Meikle; Artist Relations and Marketing with D’Angelico Guitars, Ryan Kershaw; President with Hoshino USA, Shogo Hayashi; and National Sales Manager with PRS Guitars, Jim Cullen.
The Music & Sound Retailer: One of the dominant guitar-centered stories of the last few years has been acoustic being ascendant, especially owing to popular artists like Taylor Swift and Ed Sheeran, and electric guitars struggling a bit. Do you buy into that narrative? Why or why not? As we move deeper into 2016, what’s your assessment of the relative strength of the acoustic and electric sides of the market?
Shogo Hayashi: Well, this is always “the question” in the guitar industry…. Since Ibanez covers all categories—from metal guitars to ukuleles—I would say the acoustic uptick trend continues. For example, I have been seeing a strong demand for “junior or mini” size acoustics with affordable prices; these appeal to both hobby guitarists and beginners. The line between acoustics and ukuleles seems to be disappearing, and we’re now seeing many six-stringed ukuleles. This introduces ukulele players into the real guitar world. It’s my belief that 2016 will be “the year the electric guitar reawakens.” First, the high-end electric market has been very healthy and growing. Second, I am starting to see a gradual comeback of mid-priced electrics: both guitars and basses. These are all good signs. In my opinion, it’s not a true statement that, over the years, there has been a loss of interest in beginner electrics. Sales have moved from brick-and-mortar retailers to the Internet, which is an easier shopping experience for parents who are not musicians. So, I think “the loss of interest” is actually the Internet “retail revolution,” which has been getting bigger.
‘All of the most successful stores invest in educational programs, and they have dozens of kids coming in every week. Having them frequent the store also generates sales of picks, strings and more. With education and local marketing, a store can really become part of the cultural identity of a town.’
—Chris Meikle
Chris Meikle: I can point to several reasons that acoustic sales outpace those of electric. The acoustic guitar, far more than the electric, is recognized as a songwriting tool, which makes it a more personal instrument. There’s instant gratification with it; you can take an acoustic anywhere, and you don’t need an amp or a band. If there’s an issue with the electric guitar, I think it’s bigger than the product itself. Culturally, playing electric guitar solos may not be a feature in the music that speaks to youth today…especially what’s being played in the Top 100. It’s not just the young generation, either. We all have less time, because we’re focused on the newest devices and connectivity. So, the instant gratification of acoustic becomes even more crucial. The music industry has also changed. Labels don’t develop rock bands the way they used to. They’ve shifted to music that doesn’t rely as heavily on guitar. So, they’re not producing or promoting guitar heroes that can affect young people the way that Van Halen or Slash did. It’s really a combination of all of this: a consumer issue, a social issue and a music industry issue. In the end, acoustic plays stronger in this modern environment than electric does.
Jim Cullen: Do I buy into that narrative? Not entirely. Yes, music is currently in a different place. And, the lack of highly visible, inspirational guitar “rock bands” to kick-start a person to want to play electric guitar may put it in a lesser place than it has been in some time. Acoustics in general are also somewhat less of an investment; in the end, all you need is the guitar. There are also established electric players who want to continue to gig, but, with “full band” bar gigs drying up, doing solo and duo gigs has become more intriguing. If you combine that with video games, iPhones, YouTube and other distractions (both positive and negative), we as an industry end up where we are today. But trends ebb and flow. I believe it’s part of our job to create compelling products, at a variety of price points, to inspire music creation. PRS is primarily known for electric guitars. However, within the last five years, we have gotten into the acoustic market at two opposite ends of the spectrum: Private Stock at the very high end, and SE at a very affordable level. When the tide turns, we should be able to prosper from any angle, and that’s our goal.
‘Slash, The Edge and Eddie Van Halen are getting new fans every day. Many legendary musicians are still on the stage, allowing new and seasoned fans to still experience live performances. This is very encouraging for the guitar industry, and this activity needs to continue.’
—Shogo Hayashi
Ryan Kershaw: I do believe acoustics have performed better than electrics have over the past few years. In addition to popular music, we have also seen baby boomers either rediscovering guitar or downsizing their collection, which often results in their playing acoustic. From our perspective at D’Angelico, we just launched our acoustic series about a year ago, so we have had tremendous growth in that part of our business. We are continuing to develop new models, and we’ve recently added the EXL-A to our line: It’s an acoustic version of our top-selling EXL-1 hollow-body electric. I believe the acoustic trend will continue in 2016, but it is important to note that I also believe electric guitars are by no means going away. In fact, we are seeing more and more young players getting into rock fusion genres that rely on the electric guitar. Look at the largest music festivals in the world, which have 150-plus bands on their lineups. An overwhelming percentage of those bands have one or more electric guitars in the ensemble. That should not be ignored. A defining element of business culture right now is to offer and value diversity. This is why we have broadened the D’Angelico line to include basses, acoustics and solid-bodies. Nowadays, you’re rewarded for having diverse offerings.
The Retailer: A few decades ago, popular music was filled with guitar players whom people wanted to emulate: everyone from Slash to The Edge to Eddie Van Halen. At a time when the Billboard charts are filled with artists like Justin Bieber, Drake and Adele, what can the guitar manufacturer community do to re-create an “aura” around playing guitar as part of a band?
Kershaw: This is a great question. I could write a book on the subject. While “guitar gods” may have waned in popularity, guitar-centric bands are still headlining the world’s major festivals. The first responsibility of any manufacturer is to make an instrument that is of the utmost quality, and that’s set up correctly so the guitarist isn’t hampered by the instrument itself. D’Angelico is committed to excellence in our craftsmanship. We also invest a lot of time and resources to help develop rising artists through our support for various music festivals, the community of artists who play our guitars and in-store events at local dealers, as well as our efforts to reach outside the music industry by sponsoring events like the X Games. All of this fosters guitar as a lifestyle; that, in turn, helps create an “aura” and develop great players. The absolutely enormous amount of rock sub-genres alone should alert us to the fact that there are more than enough guitar-centric bands for guitar manufacturers to create an “aura.” In addition, for 2016, we are putting a team of brand ambassadors into the field who are excellent players and product experts. They will visit retail locations to train and merchandise, as well as to provide what we hope will be an inspiring and entertaining experience for customers and staff. Making high-quality instruments for affordable prices, asserting that we believe everyone should feel they can play our instruments, and investing in the newest wave of young guitarists and musicians are all absolutely essential to maintaining the aura around guitar playing.
‘Part of our job is to make products that inspire people to want to play music. If we make a good guitar, customers will need to pick it up. If it feels great, they’ll need to plug it in. If it sounds magical, they’ll need to create music. So, we need to try to capture what fuels that passion in the first place.’
—Jim Cullen
Hayashi: I’m taking an optimistic view of this topic. When I have a chance to talk with younger-generation musicians, I’m surprised by their strong knowledge of ’60s through ’90s guitar legends. They are deeply influenced by them. Because of YouTube and music-streaming services, this week’s Billboard charts do not serve as their textbook or their entire music experience, as it did when I was young. They are exposed to rock music history on the Internet. Slash, The Edge and Eddie Van Halen are getting new fans every day. Many legendary musicians are still on the stage, allowing new and seasoned fans to still experience live performances. This is very encouraging for the guitar industry, and this activity needs to continue. Lastly, as a guitar manufacturer, Ibanez has been making “inspiring” guitars for musicians, such as seven-, eight- and nine-strings, and the SR Ashula bass (combined fingerboard of fretted and fretless). We will keep making “crazy” instruments, and we’ll help musicians make “new” music that no one has heard before.
Meikle: The manufacturer probably can’t create the cultural shift that would be needed to re-ignite rock music and the electric guitar; we have to keep flying the rock ‘n’ roll flag, though. Not only is the electric guitar featured less, but, in addition, the image of the wild ’80s rocker with big hair is perhaps out of context to many today. That’s especially so with listeners under 25. Some guitarists, such as B.B. King and Eric Clapton, will always inspire new musicians, and there are many great young players out there. However, times are changing more quickly than they ever have, and it’s hard to see where a sub-culture or trend will come from that will make millions of kids pick up the electric guitar again. I believe it will happen, though. There will be some new style or sub-culture that gravitates to electric guitar, and I’m sure the manufacturers will be perfectly placed to support it. The sad thing is, if many young people knew what it actually feels like to play live and travel around as a band, just having the time of your life, they’d probably hop onboard. Maybe that’s what we need to promote. Being in a band when you’re young is, quite simply, incredible.
‘Acoustics have performed better than electrics have over the past few years. We have also seen baby boomers either rediscovering guitar or downsizing their collection, which often results in their playing acoustic. We just launched our acoustic series about a year ago, so we have had tremendous growth in that part of our business.’
—Ryan Kershaw
Cullen: I agree that music is currently in a different place. Yet, what influences purchasing decisions is not so different. Part of our job is to make products that inspire people to want to play music. If we make a good guitar, customers will need to pick it up. If it feels great, they’ll need to plug it in. If it sounds magical, they’ll need to create music. It’s easier than ever to create music on your phone, laptop, etc. So, we need to try to capture what fuels that passion in the first place. As the question suggests, one key to fueling this kind of passion centers on artists. When Hendrix, Van Halen, Sonic Youth, Slash, etc. hit the scene, it was something new in a defined space; thus, people were inspired. Some say there’s nothing new now, but I disagree. There are definitely current “tastemakers”: Derek Trucks, Mark Holcomb, John Mayer, etc. There are also lesser-known bands with inspirational song orchestration: Pretty & Nice, Medications, etc. Alignment with both types of artist is key. Today, information is available everywhere. Among the positives of YouTube, Spotify, etc. is having access to an infinite supply of music. People are discovering more music all the time, and doing so in a grassroots manner. So, local/regional music scenes can be building blocks just as much as “stars” are. There’s no magic bullet, though, or else we’d all be doing it.
The Retailer: Given that The Retailer is read by brick-and-mortar music products retailers, I’d like to know what advice you could offer to your dealers as it relates to improving the way they sell your products. Do you have any ideas to help spur guitar sales at brick-and-mortar retail? Is it about merchandising…point of purchase…lessons…add-ons…product knowledge? What could dealers be doing better?
Cullen: It’s all those things, really. At the basest level, the correct inventory mix and educated, passionate salespeople are crucial. I can’t tell you how many times I have walked into a shop to see zero Custom 24s. This model is why PRS exists—a flagship, if you will—and it’s the model that will turn a customer on to the rest of the PRS lineup. Imagine you carry Fender and you have zero Strats on the wall. How many Fenders will you sell? Likewise, your salespeople have to be truly educated about the product, and they must be passionate about helping and inspiring musicians. I look at our distribution channels as an integral part of our team. So, we provide training to all our dealers—take advantage of it! Without an educated staff, you are relying on clerks, and that is a dangerous foundation for any business. In the end, the most important thing to me is to create a positive customer experience from the moment they enter to the moment they leave. This inevitably creates customer loyalty. Follow the Golden Rule. If you treat people with respect and dignity, it makes it difficult to fail.
Kershaw: The key to merchandising D’Angelico guitars in-store is to make sure that the headstock is visible to the customer. It is the most unique and ornate part of our instrument, and it sets us apart from other manufacturers. It is known around the world. Next, guitars on the Internet do not get fingerprints on them or have dead strings; thus, merchandising and maintenance are always key. It only makes sense to show products at their best. Expectations rise directly with clout, and D’Angelico guitars undoubtedly meet those expectations when they are cared for. Also, our brand story is an enormous selling point: from John D’Angelico’s building techniques, to the artists we’ve made guitars for in the past, to those who represent our brand today. We are constantly marketing and supporting our sales efforts with exceptional brand stories. Both our Web site and our team members are excellent resources for dealers. We encourage our dealers to tell our story, show customers your product knowledge, and let your passion for music and exceptional instruments inspire them!
Hayashi: As both an individual musician and as a guitar manufacturer, I would like to see all retailers transform themselves flexibly and consider their customers’ buying behavior/pattern. I don’t think it makes sense to divide brick-and-mortar retailers from e-commerce retailers. Retailers are retailers. I believe the e-commerce trend is a big opportunity for every brick-and-mortar retailer. For example, an average guitar shop that has an incredible effects pedal geek in the store could be a great online guitar pedal specialty shop without changing the physical storefront. With e-commerce, you can have a completely different character, and you can reach customers who live outside your state. While on the topic of physical stores, I’ll never forget my first visit to a music store, when I was 10 years old. They sold both music products and vinyl records. It had a cool vibe and, to me, that place was a museum. After the visit, I felt like I was a special person, even though they told me, “Kid, please don’t touch the Gibsons!”
Meikle: I think that, today, a dealer on Main St. must look at the battlefield and ask, “Where can I stake my claim? Where can I not only survive but, in fact, win?” E-commerce has become so difficult to break into; the major players are absolute giants. Brick-and-mortar stores have to find a way to do what chain stores cannot. One of the most effective strategies I’ve seen is education. Lessons are critical, and I see their efficacy every time I’m on the road. All of the most successful stores invest in educational programs, and they have dozens of kids coming in every week. Having them frequent the store also generates sales of picks, strings and more. With education and local marketing, a store can really become part of the cultural identity of a town. Having staff that is knowledgeable about product is another strong point. A very large percentage of consumers will not buy a guitar online, even if it’s a better deal. They feel they have to play the instrument. It’s worth its weight in gold to certain buyers to have an employee who knows the product, who can guide them and who can assure them.