twice connect
careers

Sumner: Yamaha To Outperform Component Market

10/17/2011 12:01:00 AM Eastern

PURCHASE, N.Y. – The component-audio market
flattened out this year and could wind up flat for the
full year following last year’s double-digit dollar gains
at retail, but Yamaha expects to outperform the market,
Yamaha Electronics president Tom Sumner said.

He cited new programs, the second year of the stepup
Aventage A/V-receiver (AVR) series, a continued
focus on dealer training through independent reps,
and rising interest in two-channel electronic components,
among other factors.

The efforts put Yamaha in a strong position for the
fourth-quarter selling season because “dealers are
counting on audio” with margins up to 40 points on
AVRs and 50 points on speakers to offset declining
flat-panel TV unit and dollar sales and TV’s slimmer
margins, Sumner said during a one-on-one meeting
with TWICE.

Retail-level component-audio sales (electronics and
speakers) have been flat in dollars and up slightly in
units so far this year because of the economy and CE
store traffic that has declined as consumers buy fewer
flat-panel TVs, Sumner said. Nonetheless, product
segments such as AVRs, soundbars and speakers are
posting rising sales, he said.

Following triple-digit 2010 gains, sales of active
soundbars are up 50 percent in dollars so far this year
because of the need to add intelligibility to thin TVs’
thin speakers and deliver an audio performance that
matches video performance, Sumner said.

AVRs are up by single-digit percentages in units and
dollars because of network connectivity available at
price points below $500 and because of the need to
update older AVRs with HDMI ports to make optimum
connections with Blu-ray players and HDTVs, he said.

With prices ranging from a suggested $649 to
$1,999, Aventage AVRs are giving consumers “a
reason to spend more than $1,000” for a receiver, he
said, noting that The NPD Group sell-through statistics
show that demand for such receivers in that price
range fell about 40 percent in units and dollars over the
past several years. Aventage was built to “sound best
for music,” in large part due to “ear-selected parts”
chosen for their impact on sonic performance, and to
fulfill the needs of custom installers, Sumner said.

These and other Yamaha AVRs starting at a suggested
$249 are “selling through really well,” he said.

Aventage’s predecessor products “were not the easiest
products to integrate,” Sumner said, pointing out
that the control codes enabling them to integrate with
Creston, AMX and Control4 home-control systems usually
came out months after the receivers hit the market.
Now, however, Aventage AVR codes are available to installers
at the time of launch or within a month.

Although Aventage is designed to appeal to custom
installers, it’s a challenge to get installers to spec in
Aventage if they’ve gotten efficient at installing other
brands, Sumner noted. “It takes a lot to pull a custom
installer off what they already install.”

To build demand for Yamaha components in all channels
— including speakers, active soundbars and twochannel
audio electronics — the company is continuing
to focus on dealer training, and to accomplish that,
independent reps will remain part of Yamaha’s go-tomarket
strategy, Sumner said. Only the Southern California
region is handled by factory-direct reps because
Yamaha’s U.S. headquarters is located in the region.

“Reps allow our focus on training,” he explained,
and they “cultivate relationships with retail salespeople.”
Yamaha’s independent reps, he added, “can tell
the Yamaha story just as well as we can” because
they’ve been Yamaha reps for many years.

Training also takes the form of an online site that
salespeople can access to answer questions posed
by customers.

In the custom channel, Yamaha has been using regional
distributors for the past seven to eight years
to supplement its independent reps. The regional distributors
serve pre-approved installers who prefer to
pick up products on the day of installation. In those
distributors’ territories, however, Yamaha’s reps still
work with installers who buy direct and can expect
two-day shipment from either of Yamaha’s two U.S.
warehouses, Sumner said.

Reps are critical to Yamaha’s custom-channel success
because installers “want a lot of handholding and
one-on-one,” Sumner noted. Most of the company’s
reps have at least one staff person focused on custom,
he noted.

Also to build up sales, Yamaha is providing more
detailed online video content for its dealers to use in
their web sites to explain product features and benefits,
Sumner said. “Consumers learn online before
they go to a store,” and likewise, if they heard something
they liked in a store, they then go to do online
research, he said.

To keep consumers happy with their purchase and
entice them to come back again, the company also
instituted a 24/7 consumer-support phone line, up
for about two years now. “We are the only pure-audio
company with 24/7 [consumer] support,” he said.

Also contributing to Yamaha growth was last year’s
launch of a slew of two-channel stereo receivers in
a two-channel market is small but rising this year by
double-digit percentages, Sumner said. Yamaha offers
two-channel electronics priced from $249 for a
receiver to $2,000 for an integrated amp. The receivers
include networked models and models with iPod
docks.

Consumers are buying new stereo receivers to
replace old models, and custom installers are using
them to power the third and fourth zones of a four-zone
A/V receiver, he noted.

In component-based HTiBs that lack Blu-ray player,
Yamaha said its sales are rising even though industry
sales this year have fallen by about 15 percent in both
units and dollars, likely because of a consumer shift
to active soundbars. Sales of HTiBs with integrated
Blu-ray players have also fallen this year, due in part
to soundbar proliferation and to the ability today to get streaming A/V services not just from integrated
HTiBs and stand-alone Blu-ray players
but also from set-top boxes and TVs with
built-in streaming.

PHOTOS
Nationwide PrimeTime 2014

Scenes from Nationwide PrimeTime buy fair held in

ProSource Meeting Filled With Optimism

San Antonio — Optimism reigned at ProSource’s

Ingram Draws 500 To Spring Vendor Expo

Scottsdale, Ariz. — Ingram Micro Consumer

CEA Holds ’14 Digital Patriots Dinner

Washington — CEA held its annual Digital Patriots’

8 Technology Accessories For a Greener Earth

An Earth Day review of Earth-friendly products, by

BrandSource Shows Diverse Product Selection

BrandSource’s Summit show at the Marriott World

Scenes From Toy Fair

By Lisa Johnston