Sumner: Yamaha To Outperform Component Market

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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.


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