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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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