Musical Instruments Follow CE Recovery - Twice

Musical Instruments Follow CE Recovery

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NEW YORK — Things are picking up — or not — in the realm of musical instruments and accessories, according to whom you speak to.

The category has inched its way to the forefront of the consumer electronics consciousness, driven in part by Best Buy’s entry into the market. And as with the rest of the categories under the great CE umbrella, it has faced the challenges and downturns of the Great Recession.

As Best Buy has expanded into musical instruments, many traditional instrument retailers have continued their natural expansion into such CE categories as DJ equipment and PC home-recording technology.

TWICE reached out to some independent dealers, as well as to Best Buy, to see how they had been affected by the downturns and as to whether they thought this “early recovery” was reaching their locations. Not surprisingly, the reactions were mixed.

Keith Billik, showroom manager of Elderly Instruments, based in Lansing, Mich., noted it felt as if the downturn had been “going on forever.”

“Being in Michigan,” Billik said, “We were actually hurting a few years before the rest of the country was.”

Although he said it was tough to say as to whether the store is yet feeling the effects of any recovery, Billik did say they have begun to hire a few part-time workers back to the stores after having had to do layoffs and reduce hours.

Shane Koss, store manager of an Alto Music in New York City, attributed its pro musician customer base to its resistance to the recession. “Compared to other companies, we fared very well, and we’re lucky with that,” Koss said. “It’s very specialized here. We just cater to high-end working professionals. They always have to work — it’s not discretionary spending for them.”

Koss said that approximately 10 or 20 percent of its customer base are semi-pro or hobbyists, and that there had been a decline in that area.

Best Buy’s customer base ranges from amateur to pro, according to spokesman Justin Barber, and this mix could be one of the sources of its success.

Barber called Best Buy’s musical instrument departments “a non-intimidating environment.” And while the recession had proved to be a hindrance for the company, it still added around 20 musical instruments departments to its stores.

“It did certainly slow down, but Best Buy as a whole opened less stores last year. We’re happy with what we’ve seen so far,” Barber said. He called the new department openings “a learning process.”

Not surprisingly, most of the retailers we spoke with implemented strategies to keep their businesses afl oat during the turbulent times.

Billik said Elderly had “been doing a lot more discounted sales. [We are] a lot more willing to negotiate to on prices, whereas before we had a policy not to do that. [We are] much more willing to do price matching and make a deal — those kind of competitive things.”

Leslie Chew, operations director for Los Angelesbased Westwood Music, said that diversity helped them carry through, including “moving into some other markets, like professional audio, custom installations, increasing our teaching and education schedule, and not relying solely on the sale of musical instruments.”

Chew said it was musical instruments that got hit the hardest, although Westwood, which has been in Southern California since 1946, has seen the guitars coming in on consignment increase over the last year.

While Best Buy does not currently sell or buy back used instruments, often a fixture in a music retailers, Barber said that this doesn’t meant it won’t in the future.

When asked what products are proving to be growth categories, responses were again mixed, partially depending on the product mixes of the retailers.

Barber said that while it depended on where the store was located, “guitars are obviously a pretty good seller. One thing we’ve really seen is DJ equipment has become huge. We’ve also expanded our PA assortment.”

Elderly’s Billik noted that ukuleles had been rising, along with home recording. “Computer-based home recording has been really big. It’s so inexpensive to do it — almost any musician of any genre will be able to participate in that … No matter what style music you play, you’d be interested in it. It’s fairly cheap now. For two hours of studio time you could setup yourself to do it whenever you want, wherever you want.”

Koss of Alto echoed the popularity of home recording. “More and more manufactures … are focusing on that market [home recording] specifically. Even at the expense of their other products. They just see that as an untapped market to expand.”

Westwood’s Chew declined to name a specific category that had seen growth, explaining, “We’ve been relatively flatlined.”

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