Clarion Corp. of America cited a shrinking car audio aftermarket, the growth of online car audio sales, and a lack of scale and volume for its decision to stop selling aftermarket car audio to distributors and brick-and-mortar retailers in the U.S.
Clarion informed its U.S. dealers and distributors last week of its decision to focus exclusively on selling direct to online retailers Amazon, Crutchfield, and Sonic Electronix. The company, which has been marketing car audio in the U.S. since 1966, will fulfill existing orders to distributors and brick-and-mortar dealers.
“In the past three years, our online sales have been growing, and our brick-and-mortar sales have been shrinking,” said Allen Gharapetian, marketing and product planning VP. “The writing has been on the wall in terms of where the market is going. A significant percentage of our sales are already online.”
Larger aftermarket suppliers “can sustain online and brick-and-mortar sales,” he continued, but “we can’t compete with the 500-pound gorillas with their advantages in cost and volume.”
“It was a matter of deciding where to focus,” he said, citing the high cost of supporting brick-and-mortar stores with in-store resources and training.
For the past several years, the company added in a prepared statement, retail sales “have shifted heavily from brick-and-mortar retailers to online sites such as Amazon. The driving force behind that is the consumers themselves who are looking for convenience, selection and competitive pricing.”
By selling exclusively through the three online retailers, Clarion “believes it will be able to provide a better product selection, greater service, and more competitive pricing to consumers,” the statement continued.
Clarion has been selling direct to Amazon, Crutchfield, and Sonic Electronix for many years, selling to Crutchfield for 30 years and to Amazon for more than 10 years. Its products were also available to other online retailers through its authorized distributors, but those retailers won’t be able to get the products anymore through the distributors.
Online advantage: One advantage of focusing on the three online retailers, Gharapetian said, is that “all our SKUs will be available to consumers,” whereas “brick-and-mortar retailers were unable to support an entire product line.” That’s one of the key reasons consumers go online to shop for car audio, he noted.
He also said the three online stores deliver a high degree of consumer education to help consumers buy the right products. For consumers who aren’t do-it-yourselfers, the retailers suggest recommended installers, he added.
With the shift, Clarion said it believes its business with the three online stores will grow and that, over time, the company could make up for the sales it is losing with the distribution changes.
Maintaining OEM, marine: In the U.S., Clarion will continue to supply car audio products on an OEM basis to automakers. Clarion will also continue to sell marine audio to brick-and-mortar marine-specialty outlets, online stores and boat makers, Gharapetian said. Clarion is maintaining brick-and-mortar marine-market distribution because marine is “a significant business” for Clarion and growing for the company, whereas the company’s aftermarket car audio sales are shrinking, he said.
In other regions of the world, Clarion’s sister divisions are maintaining brick-and-mortar car-audio distribution --including in Canada, Europe and Japan – because “other countries are less affected by online purchases,” he said. “Most of Asia is like the U.S. was 25 years ago” in terms of car-audio distribution channels, he noted.
Clarion was established in December 1940 in Japan, at first making home radios and then adding car radios. The U.S. subsidiary was formed 50 years ago solely to sell car audio.