The fate of Hi-End Audio?

[metaphacts]

Originally Posted by PHC1

The idea of a boutique show room with the 50% profit margin is pretty much done. Those manufacturers that have adopted direct online sales method with a certain period of try at home minus restocking fee with passing the savings to the consumer may have a chance longer term. There will always be black swan events in the economic cycles and this black swan event will put many more brick and mortar retail stores out of business. Adapt or become extinct. We will see this model more and more with everything across the board in the decades to come. Such is evolution and online retail revolution.

Adapt or become extinct is true Serge. But how any given company adapts doesn't necessarily fit into the narrow parameters expressed above. The online revolution is long past. Evolution is where we are now and going forward.

ymmv

[PHC1]

Originally Posted by metaphacts

Adapt or become extinct is true Serge. But how any given company adapts doesn't necessarily fit into the narrow parameters expressed above. The online revolution is long past. Evolution is where we are now and going forward.

ymmv

I suppose the model may not fit the oil rich Sheiks shopping for Wamm Master Chronosonic but even that is coming to an end. I do understand what you are saying though.

[metaphacts]

Originally Posted by PHC1

I suppose the model may not fit the oil rich Sheiks shopping for Wamm Master Chronosonic but even that is coming to an end. I do understand what you are saying though.

Sheiks? The next one to buy one will be the first.

Have any referrals?

[PHC1]

Originally Posted by metaphacts

Sheiks? The next one to buy one will be the first.

Have any referrals?

No, only Oligarchs and they are not in the mood to spend right now.

[PHC1]

I’ve mentioned it before a few times when these topics came up but here goes again. I fail to see a good reason to keep relying on brick and mortar distribution centers. The most positive experiences I’ve ever had in audio were the home based enthusiasts that were also acting as dealers.

Let’s call this model “factory liaisons”. It’s no different than what Ivan is doing but there could be more geographically spread that can showcase certain products from their homes for in person audition by appointment in various states. Factory trained and perhaps YouTube “channeled” creating content, advise and facilitating delivery and setup of those items that are heavier and need proper positioning (speakers).

All the youngsters are using YouTube for every hobby and interest. The YouTube content creators are often factory/product sponsored and know a hell of a lot more than often the come and go sales staff at say Magnolia (my least favorite distribution model ) It never ceases to amaze me how good the enthusiastic youtubers can present products with detailed, in depth reviews and truly informative videos that drive the interest of the prospective buyer! The manufacturers absolutely should adopt the model and create YouTube content with in depth insight into their products. In any case, I firmly believe there is hardly any need for overhead expenses of brick and mortar. While some dealers are still doing quite well in certain geographical areas with proper demographics, many have went out of business or are about to after this black swan.

[W9TR]

Burt Tansky of Norman Markus in 2008:

“Remember, when our customer tightens their belt, it’s generally ostrich or alligator”

The luxury goods market dropped about 9% post 2008 and recovered quickly due to the strength of the emerging Asian wealth class.

High end audio is a luxury good. A unique one at that, for sure.

[W9TR]

I read Ken’s article, quoted by Bill, above, and have to agree with him. One of my favorite quotes by Warren Buffet:

“Only when the tide goes out do you discover who's been swimming naked.”

My buying habits are pretty conservative - you can see that in my signature.

That’s why I won’t buy a niche audio product from an unknown or new manufacturer.

One of the weirdest things I find about audio is the cult of the self-anointed prophet. Usually a designer, sometimes an engineer, infrequently a marketer, this individual is the whole company. There is no one else. The prophet professes to have discovered a fundamental audio truth that more mainstream manufacturers have missed entirely.

[nicoff]

Originally Posted by W9TR

.....
That’s why I won’t buy a niche audio product from an unknown or new manufacturer.

One of the weirdest things I find about audio is the cult of the self-anointed prophet. Usually a designer, sometimes an engineer, infrequently a marketer, this individual is the whole company. There is no one else. The prophet professes to have discovered a fundamental audio truth that more mainstream manufacturers have missed entirely.

I got burned learned long ago by a fly-by-night operator. Guru or not, lesson learned.

The high-end is populated by too many one-man shows. They will leave their customers stranded if they, say, were hit by a bus. Not worth the trouble in my view.

[Antonmb]

Originally Posted by PHC1

...that can showcase certain products from their homes for in person audition by appointment ...and facilitating delivery and setup of those items that are heavier and need proper positioning (speakers).

Isn’t that what a good high-end brick-and-mortar dealer does now? Whether it’s done from a home, like Ivan, or from a storefront, there’s still the overhead and cost to display and audition equipment.

Originally Posted by PHC1

...It never ceases to amaze me how good the enthusiastic youtubers can present products with detailed, in depth reviews and truly informative videos that drive the interest of the prospective buyer!

I agree, but I think this is more of a threat to the traditional magazine reviewer than to the dealer, who provides the opportunity to touch and listen before buying.

Originally Posted by PHC1

The manufacturers absolutely should adopt the model and create YouTube content with in depth insight into their products.

👍

Originally Posted by PHC1

... While some dealers are still doing quite well in certain geographical areas with proper demographics, many have went out of business or are about to after this black swan.

The first to go were the big boxes like Magnolia, because they catered to exactly the demographic you’re talking about - the mid-fi buyer who could care less about seeing in person, is happy to rely on a self-appointed expert on YouTube, and isn’t a critical listener anyway. Magnolia, the Good Guys, Circuit City, etc., were never ”high end,” although Magnolia may have had aspirations. What I’ve seen developing as a sustainable model over the last several years is dealers branching out into custom installation: home theaters especially, but also custom yachts, music systems in high-end homes (think brands like Wilson and Sonus Faber) - a model which allows them to still maintain a brick-and-mortar front end, albeit often in a reduced footprint with a more focused offering. Some also innovate with things like customer events showcasing manufacturers present (e.g. Seattle-based Definitive Audio and their Music Matters events). As long as there are 1% communities and people who aspire to them, I think this model is sustainable. There may be some fallout of “naked swimmers” (I love that quote), and some restructuring, but I don’t think brick-and-mortar will go away. It may shift to more individual dealer homes or smaller footprints, but the smarter, more innovative and adaptable dealers will still survive. A shakeout in the industry typical of any downturn, but not the death of it.

[W9TR]

Originally Posted by Antonmb

Isn’t that what a good high-end brick-and-mortar dealer does now? Whether it’s done from a home, like Ivan, or from a storefront, there’s still the overhead and cost to display and audition equipment.





I agree, but I think this is more of a threat to the traditional magazine reviewer than to the dealer, who provides the opportunity to touch and listen before buying.





[emoji106]







The first to go were the big boxes like Magnolia, because they catered to exactly the demographic you’re talking about - the mid-fi buyer who could care less about seeing in person, is happy to rely on a self-appointed expert on YouTube, and isn’t a critical listener anyway. Magnolia, the Good Guys, Circuit City, etc., were never ”high end,” although Magnolia may have had aspirations. What I’ve seen developing as a sustainable model over the last several years is dealers branching out into custom installation: home theaters especially, but also custom yachts, music systems in high-end homes (think brands like Wilson and Sonus Faber) - a model which allows them to still maintain a brick-and-mortar front end, albeit often in a reduced footprint with a more focused offering. Some also innovate with things like customer events showcasing manufacturers present (e.g. Seattle-based Definitive Audio and their Music Matters events). As long as there are 1% communities and people who aspire to them, I think this model is sustainable. There may be some fallout of “naked swimmers” (I love that quote), and some restructuring, but I don’t think brick-and-mortar will go away. It may shift to more individual dealer homes or smaller footprints, but the smarter, more innovative and adaptable dealers will still survive. A shakeout in the industry typical of any downturn, but not the death of it.

Good points, Tony. The industry is changing, in many ways for the better.