In these challenging economic times, the big box stores will stay
focused on price, price, price when they should be focused on value,
sales and expertise. This leaves a beaming opportunity for specialty AV
dealers and audiophile salons to differentiate themselves from their
big-box competition, as they can add real value to the sales process.
As Bose has proven at their stores - you can do stunning demos for each
and every person that walks through the doors. I challenge specialty
stores to find affordable and meaningful ways to get people into their
best demo rooms (Google ad words, online ads with specialty sites,
cheap radio ads, email outreach, special events, geo-targeted PR,
search engine optimization) because if Bose can score customers with
their slick demos - so can specialty AV dealers.
Sadly, many specialty retailers demand high profit margins for the
products that they sell but are reticent to reinvest those margins into
earning new customers. They long for a return of the good old days of a
booming real estate market that had consumers pulling 130 percent
equity loans so that retailers could just take orders off of the phone
for large dollar installations. Those days are gone as today,
meaningful clients with real budgets need to be earned. These buyers
need to be educated as to why they should spend a little more than at
the warehouse stores or big box retailers. Big profit margins must be
invested back into creating customer demand by these same retailers -
another lesson that Bose has always known, as creating consumer demand
For example: try telling a guy who owns a Ferrari or a Porsche that "Bose is crap." Not only is it a foolish thing to say - it simply doesn't add up to how they view the brand - as that is the audio system in their exotic car. Conversely, show them what the world of high end of AV and home theater offers and why it is worth the money and you might earn some of the money that this wealthy client historically has proven he will spend on exotic cars, watches and other luxury goods.
The good news for specialty retailers is that as we learned with the recent catastrophic failure of Ultimate Electronics (and others before them like Circuit City, Tweeter
and The Good Guys!), is that price isn't what sells over all else. And
for those who are only shopping for price - there is the Internet where
you can both save state sales tax and additionally get prices on AV
gear that is reflective of the lack of brick and mortar and human
resources overhead. But even for the price-oriented consumer, the guy
wandering into the Bose store in the mall or the wealthy, young couple
getting ignored in Magnolia
- they all want to be blown away with AV technology. They want to be
shown real value and real performance. They want to be sold a system
that they can afford, that can also perform all of the latest and
greatest tricks while sounding and looking fantastic in their media
room. Show them how to make CinemaNow
jump through hoops or how good your remote programmer can tweak out a
Harmony remote and you are starting to really earn a customer.
At this level of excellence, the Internet and big box stores will have a hard time competing with. Once again, a lesson that Bose already knows. The challenge for the remaining brick and mortar, specialty AV retailers is - can they drive meaningful traffic through their front doors without counting on their manufacturers to do all of their advertising for them so that they can show real consumers why spending 10 or 20 percent more than Costco is worth every penny and then some? I still believe this is a realistic goal if retailers work to create consumer demand and do fantastic demos - just as Bose does all day every day in nearly every major city in America.