mobanmarketIt’s 2021, and the audio business marches ever onward. Accelerated by the pandemic, economic transformation continues apace; online sales are burgeoning across all industries. This includes hi-fi, which is under pressure to facilitate more online sales, and—maybe, for some—move away from the traditional dealer-based sales model.
As I reported in these pages about a year ago, companies including VPI and Bowers & Wilkins (the latter recently acquired by Sound United) have begun selling products online or expanding existing online sales. McIntosh is selling some of its products through online dealers. A little more than a year ago, PS Audio, which had always sold direct and through dealers, dissolved their US dealer network while continuing to sell through dealers internationally.
For companies, selling online has obvious advantages: wider customer reach, lower overhead, convenience—plus, they don’t have to share profits with dealers. But online sales work best with products that can easily be shipped and set up and that aren’t too expensive. Higher end, more expensive products benefit from a local audition, setup service, and a more personal touch.
Wendell Diller, Magnepan’s longtime marketing manager, recently told Stereophile about his efforts to start selling online while keeping dealers in the loop. Customers interested in Magnepan products can click on an “Online Shopping” tab on the company’s website and fill out an online “purchase request” for any of the company’s six loudspeaker models—although the only one you can buy direct is their smallest, the LRS. Upon receiving the form, someone at Magnepan reviews it and contacts the customer directly while also contacting the nearest or most suitable dealer. Magnepan, though, is responsive to the individual customer’s wants and needs: They mostly let the customer set the parameters.
Diller’s objective is to work with dealers to provide customers with “the whole range” of purchasing options, from click-and-ship online orders to full dealer service. “Our online shopping is not in competition with our dealers,” Diller said in an email. While a website is a fine place to initiate a sale, “you need to insert someone with intelligence and experience at some point in the process,” Diller said. “We view our dealers as a resource that can be of assistance to the customer.” The extent of dealer involvement in a sale and the details of the transaction vary case to case and is still evolving.
One thing customers seem to crave is conversation about the product: 90%–95% of people who fill out the form have something they want to talk about. “Most people want some sort of interaction,” Diller said on a Skype call. “They don’t want high pressure [selling], but they always have some kind of a question.”
I filled out the form on Magnepan’s website. Within a day, I’d heard from Diller and a salesperson at my nearest Magnepan dealer, Hanson Audio Video.
This tag-team approach has advantages. The customer develops a relationship with the dealer and the manufacturer. The dealer gets a new prospect they might not have connected with otherwise.
After discussing this process with Magnepan, Canadian manufacturer Bryston is now taking a similar approach. The first steps are identical: Click on the “Online Sales” tab and fill out the “purchase request.”
In contrast to Magnepan, Bryston doesn’t sell direct. “Everything goes through the dealer, no matter what product they’re interested in,” Bryston Vice President James Tanner, who was also on the Skype call, said. “We’re trying to make it clear to the dealer that, as Wendell said, it’s a partnership, and we want to maintain our brick-and-mortar dealers, and we want to help them survive and go forward.”
Tanner said that it’s crucial that dealers have something to offer customers. “Dealers should be able to give savvy advice and not just be selling something,” he said. Like Diller, Tanner wants to provide service that’s customized to a customer’s individual needs: “You’re really trying to develop a relationship there as opposed to just pushing the button.” Closer coordination between manufacturer and dealer should lead to better after-sales customer support.
Some dealers need convincing about the new approach. “Initially, they are sort of [skittish] about the idea,” Tanner said. “A few days later, they get an email from me with the list of all the things customers filled out, and nine times out of 10, they’ll email me back saying, ‘Yeah, this is a great idea.’ They realize that we’re in it together as opposed to [me] trying to eliminate [them] from the sale.”
There are some complications. Having a manufacturer act as a matchmaker could make it harder, not easier, for dealers to build customer relationships. Manufacturer oversight on pricing may not be welcome. Online, the price is the price, but when a dealer is involved, negotiation is commonplace. “It’s up to the dealer to make the deal,” Tanner told me. “[But] if you have one dealer that starts selling at 20% off, and the word gets out, that’s going to look bad. I guess that’s something we’ll have to police and fix as we go.”
Sustaining dealers is important, especially now: Some are struggling amid COVID-19 restrictions, and many customers aren’t comfortable visiting showrooms where they can give a product a proper audition. In the future, though, people may be hesitant about traveling to audio shows, even after the pandemic is controlled. Somehow that gap must be filled by resources closer to home—like dealers. “My guess is that there are going to be fewer and fewer dealers, but they’ll have a bigger and bigger market area,” Diller said.
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