Please allow me to write about something I would prefer not to write about …
Today I got an email from my dealer referring to and commenting on a message he found on the Facebook page of the German High End Society. They organize the big, big High End Show in Münich:
Die 32. HIGH END® im MOC-München war mit 363 Ausstellern und ca. 900 Marken aus 35 Ländern wieder ein weltweiter Höhepunkt der gesamten Branche. Insgesamt 16.159 Besucher, davon 5.211 Fachbesucher aus 71 Ländern, waren nach München gekommen. Die Zahl der Fachbesucher ist im Vergleich zum letzten Jahr um 18% gestiegen. Mit 58% war die Quote der internationalen Besucher dabei erneut besonders hoch.
For those who don’t speak German: 363 exhibitors, around 900 brands, from 35 countries. 16.159 visitors, 5.211 professional visitors from 71 countries. 18% more than last year. While international visitors were 58% up.
My dealer comments: “I suppose this represents “the market” for both the “supplier” side as well as the “consumer” side. So 900 brands represent / touch / please 16.159 visitors … Each brand can make 17,95 customers … Sorry, mistake, 16.159 – 5.211 pro people = 10.948 consumers / 900 brands = 12,16 customers. In my mind these numbers should have been 161.590 consumers for 90 brands …”
I understand what my dealer thinks and it made me think in fact of the day long, long ago when I said “One day every consumer will have his own manufacturer”.
But anything more that is worrying about these figures? Well … 900 brands is a lot, but it still is only a part of all the brands currently made. I have no idea how many audio brands exist, but far more than were exposing in Münich. 10.948 non-professional visitors, assuming these all came from Germany, which is certainly not the case, means that 1,35 pro mille of the German population had enough interest to come to visit … What about the visitors? Most, if not all of them are already known with the material, the brands, the suppliers. A part of them will upgrade, replace, but it is also known that the main hobby of a part of the visitors is … visiting audio shows. How many potential new audio consumers have been visiting? We don’t know. Does anyone know? Does anyone have any idea how much direct and indirect costs have been made by 363 exhibitors for being there? For what and whom?
While writing this blog I received the High End Journal Newsletter. It is in English and you have read and download it here. It’s giving the same information as mentioned above and it sounds “glorious”. And it is true . As I said to a collegue: “If someone who doesn’t know about our industry would walk around here, he would certainly think that audio is the best business you can think of …”.
But what’s the reality if you look around? Do you get the idea this is the best business you can think of? More and more shops have hardly visitors (-clients). More and more shops are closing. Magazines are disappearing or getting thinner and thinner. More and more distribution companies are firing sales people who become too expensive in relation to the profitability of the company. Famous audio companies from the past which are becoming smaller or disappearing. Financial institutes are buying famous companies as they see opportunities for pumping up the (in their eyes) too low sales figures. These are not signs that our industry is in good shape.
On the other hand … many new small-scale companies come up and are successful enough to stay alive. There are still some dealers who have enough visitors to keep on going. In Store adds On Line and On Line expands with In Store. There are new webzines coming up. Etc. Etc. If all this is something to stay, especially in the time we live in, nobody can tell. But … let’s hope.
But … what is worrying ME and I guess a lot of other people in this industry, is that we are shooting always on that same group of customers which has already a lot of audio gear and of which we hope they keep on upgrading and updating their stuff. These are also the people who visit the numerous audio shows. And the all-time question is: how much money the industry spends on these shows to get how much sales in return … Aside from dealer shows I think all these shows are just Zoo-type of events.
So what we have is an industry which is loaded with talents that create new brands and new products, an industry which is serving a shrinking group of (older!) clients. During a time that the economy is suffering worldwide. So what do we need? We need more people that are willing to spend some money on good audio systems. The industry seems not to be able to recruit these new customers, so maybe the current experienced, enthusiastic group of audio consumers is able to spread the interest for better audio. The basic interest for music is there -see the number of people having earphones in-. The “only” thing to do is bring them to the next level up … Social networks are there and with a bit of guerilla-marketing we should be able to wake up some of those who don’t know yet how much fun a good audio system can bring! Let me come back on this after the weekend.
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Justified or not? 363 exhibitors multiplied by 10.000€ average cost booth and expenses = 3.630.000€ divided by 10948 consumer visitors = 332€ Visitor Cost by entering the Show.
I don’t know if an average amount of € 10.000 is correct. I often hear higher amounts, especially from the larger exhibitors of course. Some of them get supported by the manufacturers they represent, some are not. Of course this Show is no longer a consumer-only affair. It has become more and more an international meeting-place (how about the travelling and hotel costs involved …) for manufacturers and their distributors. And some dealers. It is a fact that only a small part of the German dealers are visiting. But the main problem is (acording to me) that the material is not interesting enough for a high number of consumers … especially new consumers … We need SOLUTIONS or accept that it is a small business, growing smaller and smaller, in which a growing number of creative talents serve a shrinking number of consumers …
Herman, it’s a true but also sad story and we both know that already for years. It’s the market stupid! And in my opinion in the coming ten years there still will be a big shoot out in our kind of trade, because there are still too much shops, too much (loudspeakers) manufacturers. Of course there will always be interesting products in the topsegment, but with other marketing tools to find new consumers and of course other ways of distribution. It’s the challenge for everyone in the market to cope with these facts. My advice: you’d better to do it together…
Herman, have a nice holiday!
Thanks Bert, I enjoy the reasonable to good weather, but it is also less here than it normally is :-(. You are correct that we are facing already facing for many years the way things are going worse, “and we kept on dancing”. But it is now becoming more than serious. If I just think of high-end products, products which often need aftersales-service one way or another. How to deal with that without a local dealer? Maybe there is a new kind of job coming up? A “travelling” after sales guy who can make a local diagnose at the client’s place and decide if the product can be treated at the customer’s house or has to be brought to a technical service centre? What about promotion if less and less parties are involved? What you say about “do it together” is correct. Something like collective, general promotion for “sleep well” by all manufacturers and suppliers of good mattresses. Another way of distribution and presentation? Could be. Speakers are pieces of furniture. Maybe a local collaboration between two different kind of shops. The hifi shop for supplying and after sales, the furniture shop for display, promotion and co-selling. Audio journalists penetrate in other kind of magzines, daily papers. Spreading the pleasure, read PLEASURE of enjoying music through a good system. Don’t concentrate on the 1 Million dollar sound system. That’s the most idiotic approach you can think of. Maybe start with Pioneer’s approach to manufacture products designed by a well-known high end designer. Affordable high quality audio products which migh make people curious about what’s more available. Maybe every dealer should find a way to contact every week one local family and ask them if they want to enjoy for free one week a nice, affordable audio system. Go, install, explain and never think about potential turnover, but just TEACH and make them familiar with something they don’t know of.
Times are gone customers would visit a shop to buy their ‘stuff’ and getting new ideas. A MkII-version of any device doesn’t bring the satisfaction anymore you like to have regarding the money spent. A complete new generation is coming, with other needs and habits… The answer is GO to them.
I agree Theo we have to GO to the customer, but that has always been the case for the better deals and the better dealers. I know it is almost an exception, but there are still a few shops where clients go and visit and are updated with new ideas. I guess this is depending on the people working in the store.
If you say that a complete new generation is coming with other needs and habits, can you explain what they still want and what not? Is traditional stereo equipment (tubes or solid state) gone according to you? Is it useless to promote integrated amplifiers, speakers, cables for this new generation? If so, we are indeed dying as we exist and we do have to take firm decisions.
And why are we still promoting all these “traditional” products on national and international audio shows?
I think one of the main reasons is the almost complete invisibility of the audio industry in our daily lives. For all products people want a lot of advertising on a daily base. Smartphones, tablets, game consoles, cars and so on. But where is the serious audio industry in this scene and what steps are being taken to make people ‘greedy’? Nothing, absolutely nothing, and that certainly for the last 15 years! So no wonder that consumers turn away. Not because they want this consciously, but there is a whole new generation who do not even know this exists! So make more advertising in places that really matter such as TV, and look at the resulting miracle…
Yes Werner, that is true and that is something that also counts. But in an industry where some (more and more) have hardly the turnover to survivie, there is certainly no money to do expensive advertising campaigns. But … we have social networks, we have guerill marketing and with that you can reach far more people than in the past. I was printing at that in my original article. We (manufacturers, distributors, dealers, consumers) know so many people who are not aware of the existence of all the audio gear we like, if worldwide each of us take the responsability to make 50 people enthusiast for the material we are discussing here (we all have the tools in house) we have done great advertising without going bankrupt and maybe a basis to continue to grow the group of people interested in audio, the equipment needed to enjoy it and more people to make the community grow …
Yes Herman, that kind of publicity is definitely important and for this emergency leading industry currently one of the last straws. But as I said, there was next to a brand like Bose, 15 years ago, no audio brand or importer in the TV commercials. And that was a time where there was still enough money in the pocket. The audio industry has too long looked at themselves and made no or little effort to reach the consumer (again).
Yet there is still enough interest, once people know about it! I regularly receive friends, acquaintances and sometimes a reader of Music Emotion in my listening room. And invariably the comment. ‘Gee, that’s really cool and what an big experience!’. ‘Something I also want to have at my home’. But if it succeed me, why not in a significant number of stores? For me it looks like audio stores are no longer able to surprise consumers and also important, sufficient to bind them. And when listen in certain stores for myself, I know sadly why … In other words, it is imperative that the demo in the store is overwhelming and creates a perception that the consumer has not yet at home. But the differences are often simply too small and sometimes even worse, So the potential buyer goes back home disappointed. And I think that’s also part of the “dark” truth.
Don’t talk about individuals, nor incidents. Look how habits have changed the last decade. Eversince music is a file like text or graphics and can be thrown away without destroying physical materials, the awareness of music listening has dramatically changed as well. Do I have to write down more ‘best kept secrets’ in the musical world filled with the ostrich effect?
Theo, I can only partly agree with you. Our world is even today not only the field of streaming audio and the people who make use of only mobile audio gear. We must try to teach and honor interest in real quality and a lifelike music experience. No background muzak, but real quality time in our life to enjoy a beautiful piece of music on quality equipment. When you let people hear that something like this exists, it created automatically renewed interest.
Even “files” can be listened to in a quality way. In fact with so much music that can be stolen everywhere (an important reason for the succes of digital files), we should have even more people willing to invest in a good sound system. But there is more to consider … See my answer to Werner.
Werner, the audio business has definitely made money in the past, but it has always been for most of the people involved an extended hobby where the income per hour has always been “la-la”. Of course making a crazy number of hours made for some the income better, but still very different from other industries.
A few better hifi shops have tried to make some advertising in a normal paper. But 3 times a full page is not enough. Three years every saturday a full page would have answered the question if such was bringing any result.
What you write about being able to surprise the customer is true, but also true with a lot of other things in life. People are spoiled. With luxury in every field and everything is taken for granted. If a dealer is not able to let a system sing and sing, well he will have a very hard time indeed (if he still exists), but a potential client who has heard your system sing and swing and wants to have that at home, will certainly find (eventually with your help) a dealer who can get him such a system and even more important, make it sing and swing in the customer’s home.
Another reality is that not everybody has the income (left) or the space to install and enjoy a good system. And if so, does the rest of the family want to share it (like tv)? You can advertise what you want, if the space is not there, or too small, if the money is not there or if there is not enough budget, or the rest of the family does not accept that you want to play your music in the same room they use to look TV, no chance!! Maybe that’s why so many people go individual with a portable system and in-ear headphones. It is affordable, you can use it everywhere and all the time and don’t have anyone to ask if they agree (or not) …
Customers do change, markets do change, but retail does not react fast enough. If I can buy anything I need online, why would I go to an audio dealer? For a better price? Absolutely not. For advice? Absolutely not as I can read all specifications at the internet. For fast delivery? Absolutely not, most things I order today online willbe delivered at my home tomorrow or the day after. So how can a dealer get me into his store? Only when he is famous for his service, only when he offers brands that I want to discover, only when he gives me opportunities to compare several products before I make a choice and only when he makes me feel important, worth spending time, and possessing a rather original and surely distinctive, not average audio set. Do not offer 100 brands, listen to your customer, follow the market, find out what is hot and make shure that you are a damned good salesman. And do not forget that youngsters should be tomorrows customers. That is the most difficult issue, high end must be cool for youngsters. The one who finds the way to manage that, will be famous …
Again a lot of truth here. Of course there must be a REASON to go through a dealer. If there is no reason anymore, there is no need for a dealer. I think that the highest value of a dealer is if he can make a systme sing and swing in the shop ánd in the home of the client. That is the result of all his experience. That you can NOT get online, whatever anyone claims. The client has to know of course that an experienced dealer is able to get more out of s systen than the client who most of the time has much less experience. But … if he is willing he also can learn a lot of a good dealer. In fact that is often how new dealers are born … clients who lave learnt a lot of their own dealer, get a job in hifi and maybe even start up their own shop later on.
True, it would be fantastic if we could make the youngsters of today enthusiastic for better gear. But the circumstances today are very differemt from the time mosty of us discovered audio because it came up in the same period mass music came up. Think of 60’s, 70’s. Also the time that wealth was going up for most of us while now for most of us wealth goes down … Maybe Rutte & Samson have to declare: BUY FI!