THE END OF ‘SAM ASH MUSIC’
It’s no secret that the retail habits of the world’s buyers have been altered out of all recognition by the advent of on-line purchasing.
There is no retail sector out there that has not been directly affected by the seismic shift in retailing, from in-person visits to town and city outlets, to one-click purchase-and-delivery-instructions, and the commensurate rise in delivery-van traffic on the nation’s highways and byways.
It was a sobering jolt of reality, when the announcement in February this year that Sam Ash Music was to close eighteen of its forty-five stores, in order to concentrate on the more highly profitable outlets. This was a reminder, not that any was needed, that the changes in purchasing habits were impacting the music instrument retail sector, in common with every other business transacting in customised premises.
The real shock came just one month later, when the Ash family announced that they were closing all their shops, and looking for a buyer for the business. The hundred-year-old business has long been a by-word for instrument purchase, and has seen many legends of popular music purchase their first, and subsequent instruments at the company’s America-wide network of stores.
Aside from the emotional impact of such a loss, it comes as no surprise that even a legendary company like Sam Ash Music can fall victim to the ongoing growth of internet retail – because profit and loss are no respecters of legend, or fading shopping methods.
As in any business sector, the numbers do the talking, and an analysis of the figures for instrument retail starkly reveal why the future of any retail business that is not diversifying with other revenue streams, is simply marking time before the inevitable shutting of its doors for the final time.
The change lies in the way in which instruments are sourced, stored, and shipped to consumers. It has been custom and practice for generations, that a small-to-medium business premises can stock and supply its local musicians with its instrument requirements quite satisfactorily. But that business model has been swept away by the use of giant storage facilities which can not only offer a vastly superior range of choice to the consumer, but can ship the instruments door-to-door in an acceptable time frame, and at a sufficiently low retail price, to make the model irresistible to manufacturers, and customers, around the world.
This is the reason why industry leader Sweetwater can generate the same level of revenue from its two giant distribution centres, that Guitar Centre can make with its three-hundred retail outlets. Sweetwater can carry a choice of around fifty-thousand in-stock items, as against the seven -thousand that the average retail store can carry. Factor in business rates, utility costs, premises upkeep, and staff wages, and its not hard to see why retailers are going to the wall with such disappointing, but inevitable regularity.
Even the USP of in-store expertise and a one-to-one customer experience which works better with musical instrument choice that almost any other retail interaction, is failing to stem the tide of business closures. The same Internet that allows customers to one-click their choice to their door enables them to source a convenient expert to explain their choices to them, from the comfort of their own computer or phone screen.
The market is now dominated by the twin giants, Sweetwater and Amazon, who, together, account for £2.5 billion dollars in revenue, the equivalent to around nine-hundred standard retail stores.
But it’s not just the individual retailers, with years of experience and a loyal customer base, who have seen their businesses fail in such a short time. Mark Begleman, mastermind behind the multi-billion-dollar U.S. Office Depot chain looked for similar success with his Music And Recording Superstore (MARS) chain. In 1996 he opened the first of forty-six forty-thousand-square-foot locations, assuming that sheer scale would replicate his success with office supplies. Five years, and $100 million in venture capital, later, the business is in liquidation. Clearly size isn’t everything where instrument purchase is concerned.
They were not the only casualties to mis-read the minds and buying habits of musicians. In 2008, American retailer Best Buy trusted its market research which indicated that guitar buyers were similar to its standard customer demographic. Over three years, they opened a music ‘store within a store’, only to find that their electronics-experience staff fell well short when trying to sell instruments to more knowledgeable customers, and by 2011, the idea was scrapped.
Sam Ash Music was a veritable template for music instrument retailing in the days prior to the all-encompassing Internet takeover. Samuel Ashkenazy pawned his wife’s wedding ring to raise the money to buy a small instrument retailer in 1960’s Brooklyn, banking on the success of The Beatles leading to surge in young people wanting to form groups of their own. His vision was entirely accurate, and his sons expanded into fourteen American states with their tried and trusted business model – large well-stocked stores staffed by knowledgeable people selling top brands at reasonable prices.
But they, and everyone else, could never have dreamed of the way in which the Internet has altered the buying habits of every shopper from every retailer in every single aspect of commercial business around the planet.
The increasingly rapid demise of the music instrument retailer comes home in sharp relief when it hits a major player like Sam Ash Music with such devastating speed. Sadly, we must accept that this is how things are, and how they are going to be.
The bright spot on the horizon is, that although the retailing patterns of instrument supply and purchase have changed beyond recognition in less than a generation, the interest in instruments and the variety and range of people buying and playing them, continues to increase at a healthy rate, and that is what we must concentrate on moving forward. Supply and purchasing habits have changed, but the desire and need to create and play music has not, and that is the good news we must all take forward.
ANDY HUGHES.
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Source: musicinstrumentnews.co.uk
