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Distribution Trends

12/19/2011 12:01:00 AM Eastern
TWICE: What trends do you see at retail in the distribution and marketing of component audio?

Johnston: This is where manufacturers have to work hard to develop technology that provides benefits and solutions for ever-changing connectivity challenges and changing lifestyles. Consumers are interested in eco-friendly homes with energy control, solar and LED lighting. Traditional brick-and-mortar retail will continue to be the solution for the consumer to navigate this. Beyond selling the components, it will be critical for retail services to attend to all of the installation and connectivity requirements. Most consumers have their flat panel and now are finding that they need and want the rest of the home theater experience.

Feinstein: We’ve seen a strong increase in the viability of “quality” audio catalog outlets. These catalogs present good audio equipment with the full featureadvantage- benefit story, thus giving the prospective consumer a compelling reason to buy. We’ve also seen a marked increase in the effort and thoroughness that the larger, more traditional online retailers are putting into their audio sales efforts.

In all cases, alternative audio re-sellers are stepping up their marketing efforts as the brick-and-mortar specialty retailers continue to diminish in number and audio’s intrinsically better margins garner more attention from these re-sellers.

Henderson: Necessity is the mother of invention, or in some cases reinvention. TV sales have become essentially profitless where they were once a major profit center. This change caused the demise of many retailers, and it will not reverse (in case anyone is still waiting)! Many aspects of custom integration, starting with the touchpanel, have undergone similar price/ profit compression.

Without question, dealers are back to focusing on selling audio, and they are finding receptive consumers, but it will take time and effort to reignite this business fully. Much like a grand old neighborhood that has gone to seed, the first people venturing back are the adventurous, then it gradually becomes a mainstream trend.

Because there is still a market for quality sound based on the wonderful experience it provides, both in the film and music contexts, retail dealer failures over time create an opportunity for others to fill the void. This has been the case since the beginning of the industry. And, of course, the best dealers survive the tough times and prosper with a rising economy. We’ve noticed that those dealers never abandoned the performance audio message!

Wasek: We experienced growth in all aspects of our retail distribution in 2011. It is no surprise that ecommerce leads the way. However, that by no means diminishes the viability and necessity of Onkyo’s specialty retailers. As A/V products become more featureladen, consumers are looking to the specialists for their knowledge and insight. This value-added is being rewarded through what we see as increased sales through that channel.
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