Published On: July 3, 2017

Inventory Matters in Specialty AV

Published On: July 3, 2017
Last Updated on: October 31, 2020
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Inventory Matters in Specialty AV

There are many challenges facing specialty AV dealers as they try to compete with online retailers. Jerry Del Colliano discusses the importance of proper inventory management to help give brick-and-mortar stores an edge.

Inventory Matters in Specialty AV

Out-of-stock-225x140.jpgA buddy of mine--a young wealth manager who formerly worked at Goldman Sachs--thinks all traditional retail is going to die ... sooner rather than later. His take is that Amazon and other online players have made the buying process so easy and value-packed that traditional brick-and-mortar stores simply won't make sense in the years to come. Although I see his point, I don't entirely agree with it. I think one of the key elements that younger buyers crave is an "experience," and well-done retail outlets like the Apple Store offer just that. Many others fall short--oftentimes, badly so. Unfortunately, many specialty AV venues fall in the latter camp these days.

Here's a little non-AV anecdote for you: this past weekend, I took my wife and young son to the 3rd Street Promenade in Santa Monica, California. I needed some new workout shorts, and my five-year-old needed some mac and cheese and a $1 ice cream sundae from California Pizza Kitchen. We navigated the gauntlet of shoppers, tourists, and the Promenade's usual collection of freaks (one guy was blowing some type of animal horn and yelling about how vaccines cause autism--don't get me started) and headed to the Nike Store. Nike's Santa Monica is simply first-rate--decorated with super-cool Woodway treadmills, which are the absolute best, boardwalk-like units used by pro athletes and others with $7,500 to $20,000 to spend on a treadmill. The store has cool, well-organized displays, and they have tons of inventory. Plus, the staff is very helpful. I picked out a few pairs on my own and tried them on, but I didn't like how they felt. I found a salesperson in the Michael Jordan department who understood exactly what I was looking for and came from the back with three pairs of XXL shorts for my lard-butt to workout in. Boom. A $160 sale. Profitable. Quick. Easy. I will be back again and again. Had I bought running shorts online, without the guidance and ability to try them on, I most likely would've had to return them. The Nike Store delivered for me.

Next, we entered a new yoga store called Alo, located directly across from the Apple Store on the Promenade. It's a gorgeous store, with wonderful women's yoga outfits neatly on display. They also have a full coffee bar, comfy seating areas, and excellent overall architecture and design. We were greeted by a salesperson who was upbeat and engaging with everyone, especially my young son. Now, my wife is a former NCAA volleyball player who is 5'11", and she hasn't had much success with other yoga apparel sites like LuluLemon, which seem to think all women are a size two. The Alo salesperson reassured my wife that she could find items that my wife liked in the size that would absolutely fit. My wife warmed up and started to pick out items to try on. She selected one item but needed it in a different size. Sadly, the store didn't have it in that size, and that's where the ball got dropped. The salesgirl wrote down the item and said, "Why don't you buy it online? Or would you consider driving to Beverly Hills?" My wife had no desire to drive across town to buy a pair of yoga pants, so she agreed to buy the item online, which she still hasn't done, by the way--the moment has passed.

Sadly, Alo got every little detail right until the very end of the transaction. Respectfully, they should never be without inventory on current product in the store. Sell fewer items if need be. Rent is too expensive to miss out on acquiring a new client who can buy more and more gear and promote the brand organically. If I were the Alo manager and the needed item was in Beverly Hills, I would have closed the deal and paid for overnight or even Amazon-like same-day shipping. Then I would order a few more to replenish the store's inventory.

Now, perhaps you're asking, "Jerry, what the hell does your wife buying (or not buying) yoga pants have to do with AV?" Lots. The day before our family trip to the Promenade, I went to the Los Angeles Audio Show. It delivered pretty much what you'd expect from a traditional audiophile show. Every headphone had a wire. I heard many 70-year-olds waxing poetic about vinyl in a world where digital files are exact copies of master tape. There were very few object-based surround sound demos and little to no 4K video, except in Sony's demo. But you know what the show did do right? It had tons of inventory for consumers to play with. High-end Wilson Audio systems. Audiophile-grade Focal/D'agostino combos. Speakers with one driver. Speakers with dozens of drivers. Speakers that look like Teletubbies (no joke). There was a lot to play with and experience. What stereo store offers that these days? The answer: none.

We've written extensively on how the "if you build it, they will come" concept doesn't work in audio. The high-end superstore has been tried on both coasts (SoundEx, Christopher Hansen Ltd.), in Europe, and elsewhere. It has never really worked anywhere, as the overhead is simply too high, and audiophiles don't really support the stores. They buy used and/or out-of-state to save tax, which here in California can be as much as 10 percent these days. I'm not saying that a well-done specialty AV store can't succeed in today's economy. It absolutely can ... if it's done right.

Proper inventory management is important in specialty AV on a variety of levels. If a store has commissioned salespeople, they need to have popular, profitable products in stock that the consumer can own immediately. Getting an audio product or two across the consumer's threshold is a big deal. Most retailers will tell you that consumers won't come back to the store unless they absolutely have to. But you can't exactly dismantle your store's active demo system to make a sale, can you? Having extra inventory allows the salesperson to close the deal with "Let me bring the XYZ audio preamp over to your house in a few hours so you can hear it in your room." That adds real value for the consumer. Online resellers will ship a product to a consumer with a valid credit card without delay. Why shouldn't brick-and-mortar guys do the same thing in person? They should. It beats the online guys at one of the things they do best while adding more personal service that leads to both the immediate sale and long-term customer loyalty.

It's also a good idea for specialty AV stores to stock lower-priced items. It's great for a consumer to vist the audio salon to hear a demo of a pair of $20,000 speakers; but, for most, that's an investment that is made after long, careful consideration. In the meantime, how about a pair of cool headphones for your travel rig? What about a small music server loaded with HD audio files? What about taking home some nicely designed room treatment that doesn't break the bank but can improve your AV system? Customers want to buy stuff when they come into the store. It just might not be the full reference system every time. Having an inventory of compelling "attach sale" products can help keep your store relevant and pay that nagging monthly rent.

Is my buddy right about the future of retail? Feel free to chime in with your thoughts in the Comment section below, as we always want to hear your take. When it comes to specialty AV stores, I think there is a market for well-done, well-stocked AV salons. Just look at examples like Star Power (Dallas, Scottsdale, and expanding), Definitive Audio in the Seattle area, and Abt in Chicago. They are selling AV and much more to consumers via gorgeous showrooms that provide a truly engaging experience--be it a little Sonos speaker system, a full 9.2.2 surround sound screening room, or something like a wood-fired pizza oven or water-proof audio for your yacht. These dealers are doing what Tweeter set out to do but failed at many years ago. I think the specialty AV store can sell to a new generation of clients--but it's important that, when a customer walks in the front door, you have something meaningful and realistic to sell them. #InventoryMatters.

Additional Resources
Five Questions to Ask Before Shopping for Your Next HDTV at
Why the "Store Within a Store" Approach Makes Sense for CE Manufacturers at
High-Performance AV Companies Need to Find New Distribution Pipelines or Face Certain Peril at

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