Should 'Audiophile' Brands Be Sold In Electronics Mega-Stores?

[Ajani]

I haven't seen that kind of videostore in America yet, and think that the Canadian model is the best thing that the boutique brands can hope for. IMHO, Audiophilia is not the vibrant market it once was. Mebbe I should find another forum for this comment, but it has always been a niche market and, with the increasing popularity of ready-to-go music sources, the quick fix will trounce traditional, sedentary sources unless they (a) position their markets for more accessibility, (b) adopt some of the quick-fix technology to their own line, and (c) broaden their appeal and spruce up the snob-status-symbol image. Again, IMHO, the plug and play format is extremely appealing, and is winning over a very eager, young, techie base that may quite overshadow the eager, yet generally older crowd whose interest in things musical and technological may no longer be relevant....

Agreed... I've always said that if Audio Companies really want to ensure that they have profitability (or even jobs) in the future, then they need to look beyond just appealing to wealthy middle-aged to retired vinyl lovers with their $10K+ Speakers... and start trying to appeal to the younger ipod/computer generations... and they need to let go of the snotty attitudes and the retarded notions that unless you are willing to sell your house, wife and children's souls to get the most expensive planar/turntable system possible, that you don't care about sound quality... younger generations want BOTH sound quality and convenience... There is opportunity for these audio companies to make money and not be totally niche market, but they need to start living in the present to see the opportunities...

The good news is that several Audio Companies are producing products designed to embrace modern trends... aka USB inputs and Music Servers... too bad most of these companies are pricing these products out of the range of the people who would actually buy them...

[filecat13]

Sorry, couldn't vote in the poll as the two choices kinda had that end-of-the-week brain fart quality to them. (no offense)

Still I think your overall point in the opening post is a great topic.

Honestly, I don't think it matters whether the audiophile brands get into stores or not. Their core market is dying, and they're not relating to the emerging markets very well.

I can't see how increasing their overhead and putting demo units out (which ultimately lose value) really gets them anything.

There's a fancy, upscale mall nearby that had a Bang and Olafson store in it. Perhaps not audiophile in the mind of many, but certainly high priced. It didn't last a year, despite having a wide range of products and an excellent listening environment. All I ever saw in there were old men. (Yes, even older than me at the time.)

Not too far away was a Magnolia, that had a number of high end offerings as well as several entry and mid level products. This was before the Best Buy assimilation and destruction of the brand. That store had four terrific listening rooms and good staff. All I ever saw in there were old men. It closed after 18 months.

Lest you think that this highly affluent zip code had only old men living in it, there was also a Bose Store, which was perpetually filled with young adults spending lots of cash. It looked like the most popular destination in the mall until the Apple Store opened up.

Point is, I don't think the average consumer, well-heeled or not, is going out of his or her way to seek out audiophile style equipment. They're happy with good enough.

Companies like Bose and JBL, as well as some "resurrected" brands like Altec Lansing, are making a killing in the iPod/MP3 player ecosystem, while others ignore the market. When those convenience consumers finally decide to get a stationary system, they won't be looking to brands they never heard of.

[Ajani]

Sorry, couldn't vote in the poll as the two choices kinda had that end-of-the-week brain fart quality to them. (no offense)

Still I think your overall point in the opening post is a great topic.

Ummm... thanx...

Honestly, I don't think it matters whether the audiophile brands get into stores or not. Their core market is dying, and they're not relating to the emerging markets very well.

I can't see how increasing their overhead and putting demo units out (which ultimately lose value) really gets them anything.

There's a fancy, upscale mall nearby that had a Bang and Olafson store in it. Perhaps not audiophile in the mind of many, but certainly high priced. It didn't last a year, despite having a wide range of products and an excellent listening environment. All I ever saw in there were old men. (Yes, even older than me at the time.)

Not too far away was a Magnolia, that had a number of high end offerings as well as several entry and mid level products. This was before the Best Buy assimilation and destruction of the brand. That store had four terrific listening rooms and good staff. All I ever saw in there were old men. It closed after 18 months.

Lest you think that this highly affluent zip code had only old men living in it, there was also a Bose Store, which was perpetually filled with young adults spending lots of cash. It looked like the most popular destination in the mall until the Apple Store opened up.

Point is, I don't think the average consumer, well-heeled or not, is going out of his or her way to seek out audiophile style equipment. They're happy with good enough.

Companies like Bose and JBL, as well as some "resurrected" brands like Altec Lansing, are making a killing in the iPod/MP3 player ecosystem, while others ignore the market. When those convenience consumers finally decide to get a stationary system, they won't be looking to brands they never heard of.

Interesting point on the Bose Store... The top floor of Bay Bloor Radio is a Bose Store... so they pretty much have all the reasons average consumers would go into an electronics store covered....

The really sad part is that audiophiles waste so much time bashing Bose and (to a much lesser extent) JBL and Klipsch for catering to the mass market, while failing to realize that long after these "Boutique Stores" and Brands are out of business, Bose will still be making money.... Time to stop hating and start competing...

[filecat13]

The really sad part is that audiophiles waste so much time bashing Bose and (to a much lesser extent) JBL and Klipsch for catering to the mass market, while failing to realize that long after these "Boutique Stores" and Brands are out of business, Bose will still be making money.... Time to stop hating and start competing...

One of the things I like about JBL is its long history and the fact that it's still covering the high end as well as the low end. If I had $60*, I could buy a pair of JBL speakers and a subwoofer. If I had $6000, I could buy a full-sized home theater system (Studio L Series) or some really nice stereo speakers (pair of Array 1000 or Performance Series). If I had $60,000, I could buy a pair of some of the best speakers in the world (Everest II). Okay, I could get on the waiting list anyway.

The volume of sales on the low end stuff helps to prop up the sales of the high end stuff, and there's a natural bridge for the low end buyer to come back to a known brand for the next purchase.

On a couple of other forums, I'm surprised at the growing number of posters who are coming on line and reporting that they just got their first "high end system," a set of JBLs from the low end of the loudspeaker range but high priced to them at nearly $1000 for five speakers and a sub. A few months later they're back asking about the next line or the line above that.

I suspect a lot of people get into a brand and keep moving up the chain. If there's no place for a customer to build brand affinity when he or she starts a the bottom, there'll be no brand loyalty later on. Studies show that brand loyalty is a big deal to many young consumers, and brands that don't build affinity early in a shopper's buying history have a hard time converting them later, especially if there's inconvenience attached, such as having to search for a place where the product is sold.




*In fact I did that with the JBL Creature 2. Didn't even need an amp or preamp. Just plug in the iPod and I've got a good sounding stereo system with a sub. All the kids at school love it (or they would if it were 40 years ago and I were still in high school).

[Woochifer]

Not too far away was a Magnolia, that had a number of high end offerings as well as several entry and mid level products. This was before the Best Buy assimilation and destruction of the brand. That store had four terrific listening rooms and good staff. All I ever saw in there were old men. It closed after 18 months.

If you're living in L.A., you would not have seen a pre-Best Buy owned Magnolia location, so I don't know what you mean by "assimilation and destruction of the brand." Best Buy acquired Magnolia back in 2000, and their expansion into California occurred only because Best Buy had the deep pockets to finance that expansion. Magnolia's entry into the California market basically knocked both Good Guys and Tweeter out.

Most of the standalone Magnolia locations remain in place because they serve the home installation market where the margins remain healthy. The issue on the retail side is that audio stores simply can't stay in business by only selling components anymore.

If anything, I think BB has smartly leveraged the Magnolia brand by moving Magnolia ministores into their Best Buy stores. This expands access to higher end brands, while still keeping some separation from the mass market offerings on the Best Buy floor.

Point is, I don't think the average consumer, well-heeled or not, is going out of his or her way to seek out audiophile style equipment. They're happy with good enough.

And this is nothing new. That's how the market has always been. Back in the 70s, the majority of consumers were purchasing cheap portable record changers and all-in-one compact systems, the 80s were dominated by boomboxes and Walkmans, the 90s saw the emergence of mini-systems and portable CD players, and this decade it's all about the iPod.

[hermanv]

Nothing stops the big box stores from carrying these products now except for a couple minor issues.
1. They don't want to.
2. The customers don' want it.
3. The sellers don't want it.

Imagine Joe Ordinary: "Why is this Conrad Johnson $5,000 when the $159 Pioneer has the same watts, more knobs and those cool blinking lights?"

Salesman: Picking his nose and scratching his butt, " I dunno, I'm just here on summer break and they made us promise not to say anything useful." "I own the Pioneer, it's just great!" "Over here are some $139 speakers you could listen for yourself and decide."

[filecat13]

If you're living in L.A., you would not have seen a pre-Best Buy owned Magnolia location, so I don't know what you mean by "assimilation and destruction of the brand." Best Buy acquired Magnolia back in 2000, and their expansion into California occurred only because Best Buy had the deep pockets to finance that expansion. Magnolia's entry into the California market basically knocked both Good Guys and Tweeter out.

Most of the standalone Magnolia locations remain in place because they serve the home installation market where the margins remain healthy. The issue on the retail side is that audio stores simply can't stay in business by only selling components anymore.

If anything, I think BB has smartly leveraged the Magnolia brand by moving Magnolia ministores into their Best Buy stores. This expands access to higher end brands, while still keeping some separation from the mass market offerings on the Best Buy floor.

.

Didn't say that I did.

There was a brand new Magnolia on PCH in Torrance, completely built out in a vacant strip mall space almost immediately after BB acquired Magnolia. It was a pretty good place to go, even if there were mostly old men in there. It was so quiet at times, that I would buy some little thing just to feel like I'd paid something for the use of the building.

On weekends and evenings, things were a bit busier. Without much apparent effort from the parent company, the store slowly cultivated a clientele, and it became busier.

Within a year, the BB three miles down the road on PCH was being renovated for an in-store Magnolia. That's what I mean by "assimilation." When it opened, it was a mockery of the Magnolia brand. Having specialists in different color shirts and having a different supply line can't cover poorly designed listening areas and the stain of flat screens on every square foot of wall space.

None of the types of mid-hi-end equipment on display in the salons of the full store were in evidence. The mix of products was a joke. Sure, you could order anything; you just couldn't see it, touch it, or hear it beforehand.

Shortly after the BB in-store Magnolia opened, the full sized Magnolia was history. Now you know what I mean by "assimilation and destruction."

[pixelthis]

silly silly silly post.
What fine circuitus nonsense.
really, it makes as much sense as an expensive call girl on a street coner with her thumb out, tweeter tried it, look at how it worked out
for them
Big box stores are good for a few things, but for stuff you consider critical, you are just going to need to go to a small dealer, and why you would choose to miss out on that experience is beyond me.
Audio dealers dont get into it for the money (not unless they are really stupid) they get into it for the love.
I cant afford Mcintosh, or even Marantz, mostly, but I can sit and listen to them, or a pair of fifty thousand dollar speakers, and I don't even have to buy anything(at least, not today).
We have made great progress in the quality of the music experience,
the crap the great unwashed listen to today is way better than the crap they used to listen to(small steps)
And we who really like audio, just sitting and listening, well, thats what makes it special, siting on a couch in a small shop listening to
the latest gear and talking shop with the owner and other customers.
You could put the gear in a "big box" store, but not that experience.
Remember, when this started enthusiasts had to build their own gear somethimes, and sometimes still do.
They sell the essentials of life in a Walmart, but never what is
essential

[emaidel]

My answer to this question, like that of a couple of others, is an emphatic, "No." Aside from the fact that that the "space-for-brains" employees at megastores haven't got a clue as to how to explain anything about the benefits of such gear, those stores who do have the wherewithall to explain and demonstrate such merchandise would be totally outraged to see the same gear they spend all their time and effort selling and demonstrating, being sold by some cretin at a megastore based solely on price.

Many manufacturers tried to expand their distribution by taking goods that didn't belong into such stores, only to see the merchandise sit, have their existing dealer base tell them to get lost, and then get massive returns from those megastores claiming that the goods were "unsaleable." And all of this is after the manufacturer has dumped tons of money into advertising and promotional expenses demanded by those retailers. It's a "lose - lose" situation all around.

dbx did this in the 90's, due to an arrogant belief on the part of the then president of the company, and he all but bankrupted the company in the process.

[Feanor]

My answer to this question, like that of a couple of others, is an emphatic, "No." Aside from the fact that that the "space-for-brains" employees at megastores haven't got a clue as to how to explain anything about the benefits of such gear, those stores who do have the wherewithall to explain and demonstrate such merchandise would be totally outraged to see the same gear they spend all their time and effort selling and demonstrating, being sold by some cretin at a megastore based solely on price.

...

I agree total and finally got a round to voting "No way" myself.

In the end likes of Best Buy are not interested in selling stuff that (1) cannot be sold in volume, and (2) requires any degree of sales person expertise or time with the customer. Price is not the issue per se -- if every day someone will walk and without question in plunk down $5k for 60" HDTV or a Bose system, they're fine with that.

[Woochifer]

My answer to this question, like that of a couple of others, is an emphatic, "No." Aside from the fact that that the "space-for-brains" employees at megastores haven't got a clue as to how to explain anything about the benefits of such gear, those stores who do have the wherewithall to explain and demonstrate such merchandise would be totally outraged to see the same gear they spend all their time and effort selling and demonstrating, being sold by some cretin at a megastore based solely on price.

Historically, these dealer relationships have kept a lot of specialty audio brands out of the big box stores (this also would include midrange brands like Klipsch, Onkyo, Sony ES, Pioneer Elite, Yamaha, Denon, and Marantz). But, I think that the line is slowly eroding, primarily because we've lost so many audio/video stores over the past few years.

The JBL example guided the thinking for close to 20 years. Back then, there were enough independent dealers to put a big hurt on JBL when those dealers abandoned the brand en masse after JBL went into big box stores. Manufacturers have since then tried to balance between maintaining good relations with their independent dealers while still finding big box and mail order channels for their products. It still remains to be seen if this can work.

Yamaha and Klipsch only did business with BB after separating out their product lines, changing model numbers and/or face plates, and only selling the entry level products at BB. Same thing goes with HDTVs that wind up at Costco -- they often get rebadged with a new model number, and no product info gets posted on the manufacturers' websites for comparison.

I recall that after Yamaha went into BB, they got dropped by Tweeter and Magnolia (Yamaha has since returned to Magnolia after the ministores inside BB opened). Yet, the independent audio store in my neighborhood continued to carry Yamaha, likely because they were also an authorized Yamaha repair center and got a large portion of their revenues from warranty work.

Many manufacturers tried to expand their distribution by taking goods that didn't belong into such stores, only to see the merchandise sit, have their existing dealer base tell them to get lost, and then get massive returns from those megastores claiming that the goods were "unsaleable." And all of this is after the manufacturer has dumped tons of money into advertising and promotional expenses demanded by those retailers. It's a "lose - lose" situation all around.

That's why you don't see any of the high end brands on the main floor of Best Buy, and it's why they carved out those distinct Magnolia sections in only about 300 of their 1,200 stores. It takes a big population/income base to support an audio store period, and an even higher threshold for high end brands (since consumers looking for high end gear are willing to drive further).

dbx did this in the 90's, due to an arrogant belief on the part of the then president of the company, and he all but bankrupted the company in the process.

I recall dbx's ill-fated foray into the speaker business (didn't Circuit City sell them?). After a few years on the market, they wound up getting rebadged with BSR nameplates and sold thru liquidation catalogs and magazine ads (alongside old DAK catalog stalwarts like the Fone Bone).

dbx I guess was fortunate to have a strong customer base in the pro audio market, and have all that licensing revenue from their MTS stereo TV decoder.

[Woochifer]

Didn't say that I did.

There was a brand new Magnolia on PCH in Torrance, completely built out in a vacant strip mall space almost immediately after BB acquired Magnolia. It was a pretty good place to go, even if there were mostly old men in there. It was so quiet at times, that I would buy some little thing just to feel like I'd paid something for the use of the building.

On weekends and evenings, things were a bit busier. Without much apparent effort from the parent company, the store slowly cultivated a clientele, and it became busier.

Within a year, the BB three miles down the road on PCH was being renovated for an in-store Magnolia. That's what I mean by "assimilation." When it opened, it was a mockery of the Magnolia brand. Having specialists in different color shirts and having a different supply line can't cover poorly designed listening areas and the stain of flat screens on every square foot of wall space.

None of the types of mid-hi-end equipment on display in the salons of the full store were in evidence. The mix of products was a joke. Sure, you could order anything; you just couldn't see it, touch it, or hear it beforehand.

Shortly after the BB in-store Magnolia opened, the full sized Magnolia was history. Now you know what I mean by "assimilation and destruction."

Actually, the Torrance location's the only full sized Magnolia store in California I know of that has closed since the BB stores began appearing. All of the Bay Area locations have remained open.

If anything, the BB Magnolia locations have expanded the coverage for higher end brands into previously underserved areas. For example, before the Magnolia ministore got added to the Fresno Best Buy location and after Good Guys closed, that town actually had no place whatsoever to demo any AV gear beyond whatever BB, CC, and some appliance stores carried. People wanting to hear Martin Logan speakers or even Denon receivers had to drive more than 100 miles.

The only thing missing from the BB Magnolia locations is two-channel gear, but the name very clearly indicates that the BB locations' emphasis is home theater.

I don't know what you mean by lack of "apparent effort" by the parent company. After making my first purchase at the Santa Clara Magnolia store, I've been getting invites to their frequent private sales and open house events. And the sales reps at that particular store actually call their customers afterwards to check up on how their purchase is working out. I'll grant you that the BB Magnolia locations don't do this.

My concern for Magnolia is not about "assimilation and destruction" by BB, since the Magnolia subsidiary operates under the same management team that ran the chain before BB acquired it. My concern's more about the market trends and how it impacts the Magnolia (and all other audio) stores.

The standalone Magnolia locations have been slowly getting renovated into home installation showrooms. This means fewer demo models on the floor, and more space devoted to home automation and installed systems.

Unfortunately, that's the reality of electronics retailing -- unless they deal in comparable volumes as a big box chain, specialty audio/video stores can no longer survive by just selling components. The home installation services have a much higher margin, and that's how many of the surviving high end audio stores in my area keep their doors open. Magnolia has always had these services with licensed contractors on staff, but it seems that now they are putting more of their product mix into that area.

[filecat13]

Actually, the Torrance location's the only full sized Magnolia store in California I know of that has closed since the BB stores began appearing. All of the Bay Area locations have remained open.

That's good for the Bay Area, but the reality is that BB closed six Magnolia Stores in August and September 2007:

Arden Fair CA, Clackamas OR, Colma CA, Silverdale WA, Tacoma WA, and Torrance CA.

BB closed another store prior to those six, leaving it with 13 standalone stores, the same number--though not the same stores--as when it first bought the small chain.

During that time period, BB opened 30 in-store Magnolia Home Theater sections in "flagship" locations.