CEOs say personalization is the key to success in music retail

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Guitar Center and Sweetwater, two of America’s major music gear retailers, are striking slightly different chords with how they plan to maintain and grow their market share, customer loyalty and engagement in a specialty industry that includes newbies, hobbyists, influencers and full-time professionals.

Guitar Center operated 303 locations as of early November. The California-based company also operates about 250 stores under the Music & Arts banner. Those stores focus on school band and orchestra product sales and services. 

Sweetwater, in contrast, is almost exclusively an e-commerce business, operating just one flagship physical store at its corporate headquarters in Indiana with no current plans to expand its brick and mortar presence.

The indoor main entrance to Sweetwater music's retail store in Fort Wayne, Indiana

Sweetwater’s retail store in Indiana

Permission granted by Sweetwater

 

“Generally and generationally, I think there’s just a momentum towards online shopping,” Sweetwater CEO Mike Clem said in an interview with Retail Dive. “Every category is seeing this increase in digital penetration.” Clem also said the pandemic reshaped expectations around online shopping. 

With no other option during the height of the pandemic, many people decided to give online shopping a try. Clem said Sweetwater gained 2.5 million new customers during the pandemic and customer retention has remained strong.

Neil Saunders, managing director of GlobalData, said it is somewhat surprising that consumers seem increasingly comfortable making online purchases for musical gear because it’s often a deeply personal discretionary buy for a hands-on product.

“However, a distinction needs to be drawn between generalist purchases for those dabbling in music and more specialist purchases for those more involved in making music,” Saunders said in emailed comments to Retail Dive. “The latter will often have tested instruments at specialist retailers or during the course of their work, so they do try things out before buying. The former are quite content using Amazon or a non-specialist and making decisions by reading reviews and watching things like online videos.”

The May bankruptcy and closure of Sam Ash Music also means there’s one fewer major player in music retail’s brick and mortar sector. As the New York-based music retailer celebrated 100 years in business, it closed its 42 stores. Among other issues, the company said in court documents that it was too dependent on in-store traffic.

However, the Sam Ash brand name will continue on. Gonher Music, a Mexican-based company, won a bankruptcy auction to buy most of the company’s assets, including its e-commerce operation for $15.2 million. But a representative told Retail Dive that it has no plans to reopen physical stores and that its strategy will be focused on e-commerce.

“It’s a sad story,” Clem said regarding Sam Ash’s closure. “We knew the Ash family well. Sam Ash was one of the most respected and iconic names in our industry. And even personally, you know, as a young musician, as a kid, I remember going into those stores and falling in love.”

News of Sam Ash’s closure drew an outpouring of lament online from customers and current and former employees. For musicians, all music stores, with their gleaming rows of instruments, impromptu jam sessions, music lessons and a regular clientele of local and renowned performers are more than just a place of business. They’re often a third place where people come to connect, learn and celebrate.

In early November, the company announced the opening of Sam Ash Direct, which it described as an “online music and sound megastore.” In a message to customers, the company said it would offer “a seamless online shopping experience” featuring gear from top brands. The company also touted the debut of “gear experts” who are available to provide personalized guidance for purchasing decisions via phone or live chat.

Sam Ash’s loss could be Guitar Center’s gain, as the company confirmed it’s considering expanding the national footprint of its physical stores, CEO Gabe Dalporto told Retail Dive in a statement. “We do see opportunity to expand, and we’ve currently got a couple in the pipeline for the next year. However, the order of operations for us is to build and create a powerful customer experience in our existing fleet before we make significant expansions.”

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