Index Of All Articles

Playing Guitar - Is The Other Shoe Dropping?

by Tim Gillespie

Do we need music stores?

I mean really! Do we need them? And if so, what do we want them to be?

Before I get going here, let me just say this. I think we need music stores, but I am not sure what form they should take.

Why? What's the big deal? Here is why! Music stores are changing right now like never before. Never have we seen such big changes in market share, demographics and choices. Never has the retail space been flooded with new storefronts and virtual ways to buy musical equipment. And all of this is changing what music stores do for us and what we can expect from them.

Let me draw attention to a comparable market shift that is also going on right now. Have you gone into a CompUSA store lately to buy any PC stuff? I maintain about 20 different PC's and so I have a tendency to go in looking for whatever I need at the time. Over the course of a year I go looking for lots of different items.

That's fine unless you need something that they don't sell thousands of. Then you may not find it or anyone that knows about it. More times than I care to talk about, I am the one that knows the most about a subject in one of these stores. I want to talk to someone that knows more than I do, because I need something or some information. In my town, CompUSA is the best source we have. Most of the other smaller stores have gone away. I could drive into Denver and go to some different stores, but in Boulder, forget it. This is what I have to work with.

It wasn't always like this. We used to have several places to buy memory or hard drives but not any more. You can find a Circuit City in town, but they do the same thing. They only sell mainstream items and carry only a skeleton crew that has actual technical expertise.

This same trend is happening in music stores. Market share is being captured by big retail giants at the expense of smaller neighborhood stores. These neighborhood stores may very well have teachers and excellent guitar players on staff. When you go in to look at a new piece of equipment, they can tell you what to expect because they have used it. These people live and breathe their equipment and their craft. When I find a person like this, I usually latch on and try to remember all of the questions that have been bugging me.

It is expensive to keep this kind of expertise around. No doubt people like this, have good relationships with key suppliers and know what they are worth in the industry. No doubt store owners are trying to leverage this expertise to make more money. When a potential customer walks in to buy something, they are usually aware of how much the item costs over the Internet and how much they can buy it for in the super stores. When they see how much it costs in one of the finer stores around, it will be more expensive! Not always but often.

So what happens next? Usually the potential customers asks some questions about the product. If they talk to the person with the experience, they will learn some key features or uses right away. They at once start to become familiar with the equipment. They can probably touch it and look at the manual. They can ask questions about how they are going to use it and gain insight from someone who knows something about it. It is common to learn things that may stop you from purchasing the item. It is better to find out the digital delay you are considering is a noise box before you get it home.

A good sales person can help make sure your expectations are met.

So What?

Over the past several years I have talked to more store owners that do not understand how some chain stores can sell a guitar at below their cost. When you see it once in a while, no big deal. When the stores advertise this week after week on the radio, big deal!

Most people do not study music stores. They hear advertised prices over the radio and think "this is it". Time to buy. But what about time to service or time to support? You only need to read a few newsgroups threads to know what this can mean. Mail order guitars get damaged in shipping or are not what they are advertised to be. Some retail superstores will not work on the instrument after the sale. Some will cause you to become concerned to let them work on your guitar.

Are they all bad? No I don't think so. But the horror stories are easy to find. Go to http://groups.google.com, then to alt.guitar and search on any of the big names like Guitar Center or Mars Music. You will find some customers that will stick up for their favorite chain store but you will find a lot more horror stories.

Are smaller stores immune from this experience? No not at all. In fact there are some smaller stores that very well may give you the same experience. But market corrections have a way of getting rid of these guys for us. That is also happening right now.

The bottom 10% of music stores are just going away. For two reasons.

1. They are just poorly run music stores that do not take care of customers. Eventually this business model will fail. Music is a craft that will not suffer this kind of treatment for long. These guys bite the dust because people wise up.

2. The dividing of market share has devastated these guys just like it has many stores only they are not in shape to weather the storm, so they go out of business. Cash flow is king!

A likely time to see this is right after the holidays. They are either giving it one more shot or they are just trying to work through the best retail season, then they intend to hang it up.

This also happens to good stores. I know of several that have suffered this because they are no longer willing to play the game. They have other options and they know it. So they quit.

But what about the big guys? How are they doing?

They are closing eight stores. One in Denver.

Is Mars Music one of the bad guys? They are one of the new chain stores that have entered big national markets and have tried to wrestle market share. Now they are reevaluating their commitment to these markets. If you depended on them in Denver, you now must either deal with another location, or their Internet site, or find another store.

Will there be warranty issues? On some things, probably. Some guitars will still have the manufacturer's warranty or you can run a return through another Mar's Location.

Is it so bad this happened?

When you see how these new marketing ploys have disturbed the existing market and caused stores to rethink the business, you may not be so quick to dismiss it.

I talk to store owners all the time. We talk about the demographics of their area and their business model. This is privileged information and allows me to size up these huge retail markets for myself.

This year the number of disconnected phone numbers is an indication the effects of this intrusion are starting to have dire consequences. Not just for smaller stores, but also for Mar's shareholders.

Did September 11th have an effect. Yes! But I also know of one music store in Midtown Manhattan that was severely affected and they are still there and no one has lost their job. They lost several students in the bombing and revenue and lessons are at a stand still. But the store is still there and still open. Hang tough guys!

That terrorist attack had an effect but it is only on top of the existing strains. It seems most stores recovered from poor early season holiday shopping but it was not a banner year for most.

Music stores are changing. Not much has happened to stop that process since I last wrote about it. If you are lucky enough to have some good ones close to you, consider supporting them.

If you read my last column, I talked about some people I know that have gone to work for these chain store giants. Almost all of them have moved on! One year and they became "turn over". Most of them were at their previous jobs for many years.

I shop the Internet too. But almost always to find out how low the price can go. When it is time to buy, I always go to my local music stores and I always get a fair price. Not the lowest, but a fair price.

I know what I should pay and I know who I want to get my money. I try to make sure it happens. I also know the value of good advice. It has saved me before, it will save me again!