By Can you imagine how bad things must have gotten at General Motors back in the day when they realized that their highest end, most iconic car brand, Cadillac, was fully positioned to The Greatest Generation at a time when they were long-past the age when they needed new cars. The early 1990’s pivot to making a luxury, large-format SUV called the Escalade was brilliant. An eventual return to a little bit of their racing heritage and a borrowed powerplant from today’s C8 Corvette all brought new life into a brand that in the 1970s was second in luxury and prestige only to perhaps Rolls Royce.
Today, the audiophile industry faces a similar, large-scale challenge as the OG audiophiles are respectfully aging out of the hobby. The entire mission statement of FutureAudophile.com is about how to find and inspire younger people to be involved with this hobby that we love so much. The motivations for why someone would want a fine music playback system. Audiophile value is an important part of the “special sauce” too but far too often these key concepts are lost in the messaging to our next target audience.
No one place has more of an issue with these challenging AV topics than retail or as I like to call it the stereo store. I started in this hobby professionally at Bryn Mawr Stereo (would become a Tweeter and the disappear in the 2000s long after I moved to Los Angeles) in the suburbs of Philadelphia back in 1990 when I was 16. AV retailers changed forever in the early 2000s with the total failure of the aforementioned Tweeter, Circuit City as well as another key, national chain called Ultimate Electronics.
The same kind of AV industry sea change for the specialty audio retail chain is coming in the next few years. This time it will be powered by quickly changing demographics. Stereo stores are going out of business at an alarming rate despite how much profit they can kick off as a property run small business in the United States.
So what are the audiophile stores that are going to thrive in the years to come to do? We’ve got some good advice for them.
Select the Physical Location Carefully but Creatively
Gone are the days of a stereo store needing to be located in a shopping center or on a busy throughfare. That was the long-long ago. A good audiophile retailer needs some space to do their job at their best. Sunny Components in Covina is about as far from Beverly Hills and what we were doing at Christopher Hansen Ltd. in the 1990s but out of an industrial building, Sunil is one of the top CH Precision, WADAX, Rockport and Stenheim dealers in the nation.
New dealers need to look at rent like advertising dollars. Where are people who can afford to buy performance audio and how can you get access to them? Albeit small in overall scale, could a modern dealer have an active display at a 5-star hotel? Could an evolved audiophile retailer setup a demo at the best, local FBO (fixed-based operations aka: private jet terminal) that services say NETJETS? If somebody can afford to have fractional ownership of a G-200 then they might be able to pop for a pair of Estelons or some Bricasti. The exciting part is that these well-heeled, rich guys don’t even know what we do. They’ve never experienced the goosebumps. While waiting to get on your Global Express pointed at the Maldives – there might have never been a better time to do a demo. Younger people love Trader Joes. If a dealer’s focus is on value gear – then perhaps being near other destination locations like Trader Joes, the house plant store or you name it – could be smart. These decisions are unique and bespoke to an area but they should be made differently today versus in the past. It is an exciting new world for audiophile retailers and that starts with the location of a retail store.
Really Embrace Headphones
My research on the headphone business is that it is roughly 25 times larger than the audiophile business. Most people don’t know what an audiophile system is or what it does while nearly everybody not only knows what a headphones are – they own and need them for their day to day life. Getting people into your store and getting them to slap leather (meaning make a simple purchase at any level) is a big step. Headphones are profitable, small and easy to stock. Everybody wants the best that they can afford and they make for killer gifts. There’s no reason not to be stocking and selling premium headphones as an amuse bouche to the audiophile systems that will be played later.
Always Have Some Key Gear In Stock
The number one mistake all AV retailers make today is not having any gear in stock. A well-qualified customer walks in the front door and is blown away by what you are selling than they want to act on the endorphins and emotions that you elicited and you don’t have anything for them to take home? That’s a failure. Can you stock everything you show in a modern audiophile store? That’s impossible but you could have some of your key components ready to sell. When Wilson Audio’s rep sent me their factory over-runs to my retail gig in Beverly Hills in the mid-1990s, I could offer special values and opportunities that were in the moment. People packed the crates of Wilson WATT PUPPY speakers in the back of their car and became great clients – specifically for Transparent Cable and Mark Levinson electronics.
Amazon, Crutchfield and every direct-to-consumer reseller has inventory and they can get gear into people’s hands within days (sometimes hours if we are talking Apple and Amazon). If you have some key gear in stock, you beat the biggest of the big at their own game.
Value is the Most Important Concept To Younger (really all) Audiophiles
Once you realize that you are into high end audio, you realize you likely don’t have enough money to invest in all of the best gear. That’s only normal and the journey is more part of the fun than owning any one specific component or system configuration. No brick and mortar retailers that I know sell any CHI-FI but perhaps they should even if they need to get it “sideways” in that some of these odd companies might not have very good support for U.S. dealers. There are other brands who offer low price points and high value like Schiit, iFi, NAD and SVS (only a few that come to mind – there are many more) that fit this bill too.
Audiophile value doesn’t just mean cheap. There are many famous $50,000 speakers in the audiophile marketplace today that I wouldn’t dream of swapping my $31,000 reference Bowers & Wilkins 802D speakers for. The 802s are a killer value as you get basically the mastering system at Abbey Road or Skywalker Ranch in your living room for roughly 40 percent less than other, well-respected audiophile speakers. Electronics offer the same exciting value proposition. There are so many components that we’d consider expensive but perform better than others in the same product category at twice, three times or more the price.
Offer a Meaningful Trade-in Program
At Cello in the mid-1990s we did this and our existing clients were the best source of new business as well. The deal was this: if you upgraded in a year – you got back every penny of money that you spent towards a more expensive component. This was pre-Audiogon so being able to fully liquidate your recent upgrade to make an even bigger one had a finite timeline on it and it motivated people to take action.
Giving any kind of trade in for components can get people thinking of upgrading. It doesn’t have to be a $5,000 amp trade-in. It can be a $100 inventive to upgrade a CD player or an integrated amp. No matter what, these types of client-forward concepts make for happy and loyal customers.
Offer Better Than Factory Warranties…
Paul Wilson used to own some Esoteric gear. That is some seriously premium, Japanese stuff but sadly the amp broke which required it to be sent all the way back to Japan via their California service center. As our gear gets more and more exotic, this becomes more and more of a reality. Another local dealer lent Paul a comparable Constellation power amp. He also found a suitable amp from his inventory to leave with Paul so that he still had music in his life at least for a little while. The Esoteric amp for a number of unique reasons, needed a four month repair but Paul was fully taken care of. Amazon can’t do that. Costco can’t do that. Local stereo stores can.
Keep Your Active Displays Fresh
The sad fact is that there are fewer and fewer stereo stores in North America. That makes them more and more important to the enthusiasts in the hobby. Changing up active displays is a really good way to keep your local fans and biggest supporters engaged with your best products. On Rodeo Drive and other mainstream, high end retail locations it isn’t uncommon for a store to close for a day or two while a whole new display is installed. In Manhattan, the big retailers spend a fortune decorating their window displays to catch the attention of potential clients walking by. Audiophile stores can (and should) sell off some of their displays quarterly to keep things fresh in the store and to give consumers a chance to hear different permutations of different valued systems.
Get Creative With Special Events
A modern audiophile store should aim to have really high customer engagement. Porsche spends a large sum of money supporting the PCA (Porsche Club of America) not because that it is a profit center but because it keeps the automaker’s most passionate enthusiasts engaged.
The audiophile store of the future should look to host events to teach about audio. How about a basic turntable setup event for beginners with a local rep from XYZ brand? They can bring say 10 turntables and other goodies so that there in inventory to sell as well as components to setup. A little local PR (literally hundreds of dollars) could get new people that have never been to the store coming by for the event. Maybe a partnership with the best, vintage vinyl store in town who could bring in some really choice 180 gram pressings or first edition releases of meaningful records? They should be expected to help promote the event a bit too which might get some music lovers into the store who might not have ever found you. Customer engagement is essential for future success be it an online audiophile magazine like FutureAudiophile.com or the stereo store of the future.
Final Thoughts About The Audiophile Store of the Future …
Why more people aren’t interested in playing with stereo gear for a living is beyond me. I’ve made a pretty respectable career playing with stereo gear and in AV retail you can do the same in a high profit margin, low stress, playing-with-toys type of business. There are older stereo stores and AV retailers who are looking for any kind of off-ramp from their business ownership right now. Imagine inheriting (for a very fair price) a generation’s old client roster and bringing them a thoughtful, fun and engaging retail experience? That is a recipe for success, client happiness and overall health in the hobby/industry.
