The fate of Hi-End Audio?

[metaphacts]

Originally Posted by Antonmb

..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.

One thing I would point out that is a large flaw with the home based dealer concept is that very often, high end customers do not want to shop in someone's residence. We find that the farther up the food chain you go, the less likely the high end client is to want to buy this way. Certainly there are exceptions.

[Antonmb]

Originally Posted by metaphacts

One thing I would point out that is a large flaw with the home based dealer concept is that very often, high end customers do not want to shop in someone's residence. We find that the farther up the food chain you go, the less likely the high end client is to want to buy this way. Certainly there are exceptions.

Good point.

[PHC1]

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.

There is ZERO overhead cost with my proposed model. It can be a network of "home based liaisons". Equipment is already owned and enjoyed anyways.

When I had my not so inexpensive custom built theater room with Wilson/D'Agostino to the tune of over $200k, it was much more impressive than ANY dealer I have ever visited. My dealer indeed asked if he can bring over a potential client to my place. Why? He did sell a pair of Wilson speakers to the client after the fact. Of course I didn't get anything out of it but I had a good relationship with my dealer and would never even ask.

So why not 5% commission instead of 40-50% to a dealer who has to pay for all the overhead of a brick and mortar?

So combine a few dozen or more home based liasons in various locations in various states that would probably be more than happy to make a little "commish" like say 5% just for showing what they have. We, the audio enthusiasts are all in it for the love of gear and music, not for the sales. Do you not think we as enthusiasts can provide better service? I've never had much of personal attention walking into some of the bigger audio stores in my area. The smaller dealers, yes, much more personalized attention and focus on my needs.

Like I said, I have already visited such home based enthusiasts acting as dealers and it was a MUCH grander experience overall than any dealer.

[PHC1]

Originally Posted by metaphacts

One thing I would point out that is a large flaw with the home based dealer concept is that very often, high end customers do not want to shop in someone's residence. We find that the farther up the food chain you go, the less likely the high end client is to want to buy this way. Certainly there are exceptions.

With the levels of products you provide and the associated price, those wealthy clients should be on a private jet flying your way where all your products can be showcased properly in your own custom built "showroom". Not all dealers have ALL your products and certainly not every dealer has the proper room/acoustics or associated gear to showcase Wilson products to their fullest potential. Trust me on that

[PHC1]

Of course at this current time, the only purchases are buying online, wiping the boxes with a disinfectant as well as letting a box sit in the garage for at least 3-4 days is the reality and the limit. Face to Face contact or any unnecessary trips or purchases other than food is simply out of the question.

I don't think the world will forget this anytime soon. We don't even know when it will end or when it will be back and this virus is just too dangerous to mess with.

Will there be more germophobes after this? Better believe it.

[kubla36]

I’d prefer to pay by the hour for demos. Seems more honest compensation for guilt free time with demos, and compensate the dealer for investment and their time.

[PHC1]

Originally Posted by kubla36

I’d prefer to pay by the hour for demos. Seems more honest compensation for guilt free time with demos, and compensate the dealer for investment and their time.

That's what the collection box is for street musicians. I'd much rather deposit $5 or $10 for the guy out on the street playing his heart out than a dealer for his hourly time. They get more than enough compensation from the profit margins. Of course the overhead is brutal, hence the closure of many. Open air markets for audio?

[PHC1]

I've always thought that luxury items follow a similar trend. When the times are booming, everything is moving. High End Audio is unlikely to buck the trend when things aren't so hot...

And times are not so hot right now. Since the word Porsche is probably mentioned as many times as any average piece of audio gear on this forum...

Porsche is starting to take a hit from coronavirus.

After a decade of sustained growth, the luxury sports car maker's deliveries fell 20.2% from January through March in the USA. Over the past few weeks, millions of Americans have lost their jobs, seen their 401(k) values plummet and shopped less during the pandemic.

Porsche, which produces luxury sports cars such as the 911, 718 Boxster, Cayman and Taycan, reported 11,994 total sales in the first quarter compared with 15,024 vehicles sold in the USA during the same period in 2019.
Sales of the company's famed 911 dropped 10.5% year-over-year. The German automaker's mid-engine 718 range slumped almost 40%, and its top-range sedan Panamera dropped 30.3%.

The company handed over a record-breaking 280,800 vehicles to customers in 2019, a 10% rise over 2018. SUVs powered last year's sales.


Amidst the pandemic, Porsche North America has three priorities, the company said in a news release: It's focused on protecting its staff, supporting mobility and helping dealerships manage the fallout.

Most of its employees work from home except for on-site support workers who practice social distancing. The brand is ramping up its e-commerce presence to make home delivery for new vehicles and home pickup and drop-off for service appointments commonplace.

[metaphacts]

Originally Posted by PHC1

With the levels of products you provide and the associated price, those wealthy clients should be on a private jet flying your way where all your products can be showcased properly in your own custom built "showroom". Not all dealers have ALL your products and certainly not every dealer has the proper room/acoustics or associated gear to showcase Wilson products to their fullest potential. Trust me on that

First off, our best selling products by unit are Sasha DAW and Sabrina, not WAMM and XVX. Private jets exist but are very much the exception.

Some dealers who fit your concerns are no longer Wilson dealers. We have also eliminated some who moved from retail to home based over the past decade. All in an effort to address your stated concerns and to recreate the gathering places that high end audio stores were decades ago. It is an ongoing and long term project.

If you go to the dealer section of our website, you will also notice how many of our dealers have a more than reasonable selection of demo models. We do not expect everyone to have everything. We do expect a good representation. But since we do not try to tell someone where they have to shop, the client is free to buy where he is most comfortable.

We're far from perfect but we do try to treat our clients fairly and we try to provide the highest level of service we can.

[metaphacts]

Originally Posted by PHC1

I've always thought that luxury items follow a similar trend. When the times are booming, everything is moving. High End Audio is unlikely to buck the trend when things aren't so hot...

And times are not so hot right now. Since the word Porsche is probably mentioned as many times as any average piece of audio gear on this forum...

Porsche is starting to take a hit from coronavirus.

After a decade of sustained growth, the luxury sports car maker's deliveries fell 20.2% from January through March in the USA. Over the past few weeks, millions of Americans have lost their jobs, seen their 401(k) values plummet and shopped less during the pandemic.

Porsche, which produces luxury sports cars such as the 911, 718 Boxster, Cayman and Taycan, reported 11,994 total sales in the first quarter compared with 15,024 vehicles sold in the USA during the same period in 2019.
Sales of the company's famed 911 dropped 10.5% year-over-year. The German automaker's mid-engine 718 range slumped almost 40%, and its top-range sedan Panamera dropped 30.3%.

The company handed over a record-breaking 280,800 vehicles to customers in 2019, a 10% rise over 2018. SUVs powered last year's sales.


Amidst the pandemic, Porsche North America has three priorities, the company said in a news release: It's focused on protecting its staff, supporting mobility and helping dealerships manage the fallout.

Most of its employees work from home except for on-site support workers who practice social distancing. The brand is ramping up its e-commerce presence to make home delivery for new vehicles and home pickup and drop-off for service appointments commonplace.

Makes perfect sense with a few caveats

First as recessions go high end audio (at least since the 70's) is almost always last in and first out, lagging behind cars going in and leading them coming out.

As for business, Wilson was on pace for it's best Q1 ever until mid March. We still had a great Q1, but it was the inability of clients worldwide to take delivery/have installed their speakers that slowed us. Q2 will undoubtedly show a slowdown but as (if) we find ways around the delivery issues, it will likely not be so deep as Porsche has already experienced. I guess that is one advantage of a stay at home slowdown.

Wilson is very fortunate. We are located in an area not hard hit by the virus, at least not yet. About half of our production staff wear respirators as part of their job. Further, maintaining 10-12 foot distances in the factory is not difficult for any part of production. Even so, staggering shifts and production sections extends that. Many employees live in rural areas where their nearest neighbor is quite a ways away. So we are blessed to be operating. Time will tell whether we have to alter that or not.

Obviously you never know with the course of the pandemic. But if there is one thing that is definitely true in these types of situations: one size DOES NOT fit all.

Lastly Porsche certainly seems to have its priorities straight. Hard to argue with those.