The av business needs to learn

**deacongreg** · **05-28-09, 01:16 PM**

SOUND ADVICE.

http://www.hometheaterreview.com/av-...ment004076.php

What The AV Business Can Learn From Chef Alice Waters and The Slow Food Movement

* By: Jerry Del Colliano
* - Reviewer's System

* Category:
* Feature News Stories, Industry Trade News, News

* Resources & Links:
* View Jerry Del Colliano's Reviews

* May 27, 2009

Specialty AV retailers are dropping like flies in today's corrosive retail economy. Consumers who once lined up to buy audio gear in the 1990s and flat HDTVs in the 2000s are now either not spending on their AV systems in the same way or looking to new, value-oriented outlets like Wal-Mart and Costco, which sell beamingly beautiful Sony, Samsung and Panasonic HDTVs, Blu-ray players and other AV goodies at rock-bottom prices. Perhaps it's not the high-end or specialty gear we know and love, but even if you're a jaded enthusiast, you have to emit a "wow" when you see a huge 1080p HDTV set for under $2,000 at Costco. It's only natural.

While price is a factor in any buying decision for large-ticket items, especially in a down economy, it's not the only factor. In the "slow food movement" championed by star chef Alice Waters of Chez Panisse in Berkeley, California, the goal of the meal is not only to have it be incredibly tasty, but also that it be sourced with local, organic and somewhat healthier food. People buying high-end home theater and audiophile equipment can also take the same new-school approach to their systems and the way they source their gear. Much as you can buy buying canned, or frozen veggies at the supermarket, if you take an extra 20 minutes out of your week to visit a farmer's market, you can get even better, more exotic, fresher and more delicious food from people who work the land within a few hundred miles of where you live for many months of the year. Imagine if we looked at our specialty AV dealers in the same way. Would you pay five to 10 percent more for your system than you would to an online or warehouse retailer if the system were programmed perfectly, the audio was tuned, the video was ISF-calibrated and the cables were neatly installed? Would you invest $12,000 for your dream speakers over an $8,000 pair if they were hand-crafted by local artisans and used local materials without so many toxic chemicals, which can often get overlooked in the Chinese factories that make most of today's speaker cabinets?

Rewarding excellent service makes it worth spending a little more money. Specialty retailers are the dealers who fuel the higher-end, performance-oriented AV manufacturers. Without these outlets to sell their gear, many specialty AV brands are at risk of going on the endangered list. If their gear isn't up to speed and their service is sub-par, I know what you are thinking: let them go out of business. And you would be 100 percent right, as many AV dealers need to go bye-bye. If your local dealers can't provide top-notch service, competitive prices, calibration, programming and more, forget about them. But when you find a dealer who can deliver the whole AV enchilada you would be well-suited to not just support the dealer's business but to even promote it. It could be argued that when you find a truly fantastic installer or dealer, like the one I found in Scottsdale, Arizona, to install my father's home theater, it's worth traveling to work with them, even if it requires a few hours in the car and/or even a short flight.

Keeping specialty audio/video truly special is something that requires us, the passionate AV enthusiasts of the world, to support those who best support the industry and its best practices, just as Thomas Keller, Alice Waters, Mario Batali, Wolfgang Puck and all the other top chefs support the best purveyors of their raw materials. The end results are worth a few extra dollars at every level of the value proposition.

**lcaillo** · **05-30-09, 11:58 AM**

Where do you get the data to support that they are "dropping like flies?"

I agree that there are fewer than in the past, but much of that change occurred already and is actually less so today than a few years ago, IME. Many have shifted to more custom design and installation businesses, but I don't see them dropping like flies.

**deacongreg** · **05-30-09, 06:21 PM**

Quote:

lcaillo wrote:

Where do you get the data to support that they are "dropping like flies?"

I agree that there are fewer than in the past, but much of that change occurred already and is actually less so today than a few years ago, IME. Many have shifted to more custom design and installation businesses, but I don't see them dropping like flies.

Very true, there not dropping like flies.

**lcaillo** · **05-30-09, 09:14 PM**

Are you being sarcastic, patronizing, or do you have a point? Were you just carelessly posting someone else's comments? If so, please qualify what you post and provide some context or justification for it before simply reposting here. When you simply post something without paying attention to its content and value, your run the serious risk of misleading or confusing readers. We have a higher standard here than at AVS and other forums and I would hope that we can keep the bar high.

There is no doubt that there are many lessons to be learned by specialty retailers, and that discussion is certainly worth engaging here. Most of the survivors at this time, however, have to some degree learned and applied many of these lessons. The larger shakeout in that area of the industry has mostly occured long before now, however. It has always been ongoing, since the earliest days of the discount sellers, starting in the late 1970s. The specialty retailer has since been required to adapt and identify his market carefully, then successfully market his products and services in a manner that differentiates him from the competition. Many have succeeded and many have failed. Many others have succeeded and then moved on to other ventures. These are not really new lessons, but largely the same ones that the most successful understood and put into practice 30 years ago.

**deacongreg** · **05-30-09, 09:33 PM**

Quote:

lcaillo wrote:

Are you being sarcastic, patronizing, or do you have a point? Were you just carelessly posting someone else's comments? If so, please qualify what you post and provide some context or justification for it before simply reposting here. When you simply post something without paying attention to its content and value, your run the serious risk of misleading or confusing readers. We have a higher standard here at AVS and I would hope that we can keep the bar high.

There is no doubt that there are many lessons to be learned by specialty retailers, and that discussion is certainly worth engaging here. Most of the survivors at this time, however, have to some degree learned and applied many of these lessons. The larger shakeout in that area of the industry has mostly occured long before now, however. It has always been ongoing, since the earliest days of the discount sellers, starting in the late 1970s. The specialty retailer has since been required to adapt and identify his market carefully, then successfully market his products and services in a manner that differentiates him from the competition. Many have succeeded and many have failed. Many others have succeeded and then moved on to other ventures. These are not really new lessons, but largely the same ones that the most successful understood and put into practice 30 years ago.

First, I don`t understand the harsh tone. However, I disagree, the article is very pertinent to today. At least here in NY. I can not speak for your area. But as far as I`m concerned, the lessons have never really been learned in the high end community, again, here. The attitude, or lack thereof, exclusivity, manner, just the whole absurd way dealers, salons, and stores have carried on for years, never lended itself to bringing new people and customers into this realm we all enjoy.

Here we are with technology at its peak, with our community filled with knowledge to share it, but.............

Then of course, we had the added frustration of a second format war, hd dvd vs. blu-ray. Firmware updates, etc. etc. , I do not want to go home myself and wait for a firmware update, to watch a movie??!! No, I don`t think so.... And now we expect these consumers with HD DVD players to just move right on in. I have neighbors with HDTVs that still have not bought a Blu - Ray player. But, I`ll leave that alone. So no, maybe where you reside, everything is well, but I can still go in to the few high end dealers that are left here, and get that smug look on the face.....Surely not good for business. But, you are entitled to your opinion. As I am of mine. So yes, I do have a point, if you don`t share it, thats cool.
But being attacked, is not necessary.Have a good one..................

**lcaillo** · **05-30-09, 10:03 PM**

I do not argue that the lessons are not pertinent today. My point is that there is nothing new about this issue, and the lessons have always been valid, and will always be so. The assertion that there is some immediacy in the decline of the independent is faulty as that shakeout has been occurring for a couple of decades.

I see enough information passed on without serious qualification that tends to confuse and mislead that I am not very tolerant of it here. As I said, we need to be more careful about what we post here in order to maintain the high standards and reputation that we have. If you have a point that contributes to understanding please post it. Simply re-posting articles from elsewhere that may or may not have accurate descriptions of the markets, with no comment nor qualification might be acceptable on Usenet, but is not what we need here. If you have something to contribute, please do. Your points are likely valuable, much more so than just posting an lame article that begins with a justification that is misleading.

There are always retailers with attitude problems. There have always been and will continue to be. There have always been retailers that do a better job of defining the value that they provide and selling that value and their services to their clientele. Those that do so thrive in most economic environments, those that do not go away, faster, of course, in hostile economic environments such as we are recently experiencing. Discussion of the matter is useful and your contribution is welcome, but you have more to contribute than just passing on weak articles.

**lcaillo** · **05-30-09, 10:27 PM**

The trend toward discounters and away from specialty retailers began in the consumer electronics industry at about the time that the VCR came into existence. At about that time mail order vendors and big box discounters began to dominate many markets, and the decline of the small retailer began. It was not uncommon for large discounters to negotiate volume prices that allowed them to sell products below the dealer cost of the small retailer. Along with this commodity treatment of electronics came an inability of the volume sellers to qualify clients and sell to anything but the lowest common denominator in the market. For years, and for much of the period of maturation of the video market, we saw a serious lack of attention to performance and greater attention to marketing. This seriously affected the audio products in the late 1970s and early 1980s, as major manufacturers tended to focus on easily sold features rather than more subtle performance. To some degree that came back around as greater attention to performance was paid as technology advanced and new formats and processing became available.

Throughout this era, the successful retailers continued to do what made them successful in the past. They qualified their clients, fitted the right components to their needs, and demonstrated the performance of the products. As systems became more complex and more possibilities for customization came to market, most of those retailers embraced those new technologies and implemented them. The most successful began to customize their services with installation and calibration services that are just now becoming understood by the mainstream markets. Those that could do little more than sell at retail without justifying their existence with value added suffered, as they do today. Of course, in some markets there will always be the upper-crust dealers that simply skim the cream off the top of the market, with snobbish attitudes and ridiculously expensive products that appeal to a particular high end clientele. Those dealers are rarely successful outside of a handful of large markets. The ones that aspire to that kind of business in more modest markets usually do not last many years, or perhaps a decade before moving on to something else.

There has always been a place for the serious retailer who provides a value to the consumer in terms of services, expertise, the ability to demonstrate performance, and the ability to select high value products. There are many customers who will simply buy from the lowest priced seller, but many who will opt for a more service oriented experience. This is nothing new, nor anything that the restaraunt business has learned any better than any other. There are as many, likely more, food sellers that succumb to the competition from fast food operators as there are AV retailers that succumb to internet or big box store competition. The concept of added value and advanced levels of service is nothing new.

**mdrake** · **05-30-09, 11:20 PM**

Quote:

Are you being sarcastic, patronizing, or do you have a point? Were you just carelessly posting someone else's comments? If so, please qualify what you post and provide some context or justification for it before simply reposting here. When you simply post something without paying attention to its content and value, your run the serious risk of misleading or confusing readers. We have a higher standard here at AVS and I would hope that we can keep the bar high.

Wow do the forum rules not apply to staff? I find your tone very, very offensive! I really enjoyed the above article and found it be very relevant.

Matt

**lcaillo** · **05-31-09, 09:42 AM**

I apologize if my tone seemed harsh.

My point was that the opening line of the article was unsupported and the entire article showed a real lack of understanding of the nature of the business. The response that I made initially was intended to elicit some discussion of the matter. His response was simply to acknowledge that the information was incorrect, offering no additional comment whatsoever. This indicated an unwillingness to make a serious contribution to the forum, which I have a problem with. If one simply posts an article with no comment that can be misleading or inaccurate, he/she is not doing our readers a service. Certainly, readers can decide the value of articles for themselves, but when we start with something that is obviously intended to grab attention at the expense of accuracy, some comment is appropriate. If others dissagree, please speak up.

**deacongreg** · **06-01-09, 04:28 AM**

Until now, you and myself have been fine. This issue has always hit a nerve for me. So for me personally, its important. And during these economic times, any retailer operating this way, needs to turn things around. But to say I`m just posting a weak article because you feel this is not a big deal anymore.......Obviously, we don`t see I to I on this. So...........

**JerryDelColliano** · **06-01-09, 01:18 PM**

Dealers ARE dropping like flies....

Circuit City, The Good Guys!, Tweeter for starters....

I am doing a list of dealers on HomeTheaterReview.com right now and finding that just in Washington State alone - 4 of the 20-some dealers are now chapter 7. That was the first state that I started with. We will do them all over the summer.

Ask ANY REP that sells AV and the Mom and Pop dealers are closing their doors all over the place. Nationwide. Everyone from traditional audio stores (think stores like Sound EX in Philly, Ambrosia in LA and many others) as well as installers all over the country.

**lcaillo** · **06-01-09, 03:00 PM**

But this is nothing new. Nor is it limited to the AV business. Read my comments. The point is that the lessons that need to be learned have always been pretty much the same, and those that learn them are successful, while those that do not eventually fail. The current state of the AV business is that there are actually many retailers doing a better job of focusing their efforts and providing services of value to their clientele. They have to in order to survive. Again, this is nothing new.

Also, I would hardly classify the retailers you mentioned as "specialty dealers." All of these companies were at a point in their corporate life where they were mass merchandisers more than specialty dealers. The specialists have mostly learned the lessons described or they dissappeared years ago.

I would love to see the statistics relative to business in general. I would be willing to bet that most of the dropping like flies happened some time ago, and that the current failures are not out of line with businesses in general.

At the same time that there are failures of CC, et al, we have growth in their replacements, the same pattern that we have seen for decades now. There certainly are dying areas of the market, such as repair shops, and realignment such as the move to custom design and installation.

**lcaillo** · **06-01-09, 03:11 PM**

Quote:

deacongreg wrote:

Until now, you and myself have been fine. This issue has always hit a nerve for me. So for me personally, its important. And during these economic times, any retailer operating this way, needs to turn things around. But to say I`m just posting a weak article because you feel this is not a big deal anymore.......Obviously, we don`t see I to I on this. So...........

I did not say it is not a big deal anymore. Read my comments. Service and added value have ALWAYS been an issue. My point is that many could get away without them in the past, but for the last couple of decades the big box stores, mail order houses, and the internet have forced them to change or die. This is just not news, nor have I seen evidence that retailers are "dropping like flies" for this reason. The current economy is hurting may businesses far more than the reasons proposed. Those of us who have been in the industry for decades know that these issues came to a head a couple of decades ago. Those lessons keep getting learned by lazy retailers with no vision and no commitment to service, no matter what their size. The point is not that it is not an issue any more. The point is that it has always been and it is not necessary to resort to unsupported sensationalism to start a discussion. Read my comments in full. If you did you would not attribute my criticism to feelings that are counter to my point. It IS a big deal, you should be sensitive to it, and it will always be what differentiates a good businessman from a poor one, IMO. As for you, it is my opinion that you could contribute more effectively if you gave us your views rather than reposting what I consider to be "weak" articles. You are obviously intelligent and articulate. My other point is that we need to constantly raise the bar, for others, and ourselves. Expect more and you get more, expect less and you get what we see on other forums or usenet. This is Home Theater Shack and it will be different.

**JerryDelColliano** · **06-01-09, 03:13 PM**

When I sold AVRev.com in 2/08 I was offered a business in San Diego that had been around since the 1950's selling televisions. While the offer was a nice one - I declined as other dealers couldn't make the living they needed to survive in an area that boasts the highest per capita income by zip code in the United States. I am not sure if this store is gone now but it might as well have been as it had no inventory. Its competition was gone too.

The effect of Audiogon has gone a long way to ending the viability of audiophile salons. Why should people buy an audiophile amp new for $10,000 when they can get one used that looks perfect and sounds perfect for $5,000? Unlike an exotic car - a good pair of speakers or an amp never really wears out.

The Audiophile community has done little to build new followers. Everything in a home theater is HD and pretty affordable these days. A Compact Disc isn't HD at all. DVD-Audio and SACD were but they are dead and music isn't really sold on Blu-ray anymore. With a new crop of audiophiles you'd have more people that want to buy product. Consumer demand.

In my career which includes working in ultra high end AV (Christopher Hansen Ltd. and Cello LA) over 15 years ago - I can tell you there is no more entitled a group of people than specialty AV dealers. Stereotypically, they don't market. They don't advertise. They just demand 50 points plus of profit and wait to order take. Sales is NOT order taking. Do I love it when an ad agency calls me up and pops for a $20,000 per month deal at $25 CPMs? Of course I do. But sales is more like the creative deal I just did with Audio Research last week. Small, targeted and in line with the needs of the company that started with a promotional email and a cold call. THAT is sales. I should write a book (I am actually writing a book on sales).

**deacongreg** · **06-01-09, 04:26 PM**

Quote:

lcaillo wrote:

I did not say it is not a big deal anymore. Read my comments. Service and added value have ALWAYS been an issue. My point is that many could get away without them in the past, but for the last couple of decades the big box stores, mail order houses, and the internet have forced them to change or die. This is just not news, nor have I seen evidence that retailers are "dropping like flies" for this reason. The current economy is hurting may businesses far more than the reasons proposed. Those of us who have been in the industry for decades know that these issues came to a head a couple of decades ago. Those lessons keep getting learned by lazy retailers with no vision and no commitment to service, no matter what their size. The point is not that it is not an issue any more. The point is that it has always been and it is not necessary to resort to unsupported sensationalism to start a discussion. Read my comments in full. If you did you would not attribute my criticism to feelings that are counter to my point. It IS a big deal, you should be sensitive to it, and it will always be what differentiates a good businessman from a poor one, IMO. As for you, it is my opinion that you could contribute more effectively if you gave us your views rather than reposting what I consider to be "weak" articles. You are obviously intelligent and articulate. My other point is that we need to constantly raise the bar, for others, and ourselves. Expect more and you get more, expect less and you get what we see on other forums or usenet. This is Home Theater Shack and it will be different.

First, part of your reply should be directed at my publisher, the dropping like flies comment. You generalize this whole thing. Sure, this was going on a while ago, but its my contention, that is why the high end did not prosper. Long before the internet became and issue, this was going on. Now, years later, to walk into a high end salon and still encounter this same snobbery attitude, is really ridiculous. So we have what we have now. I was specifically talking about the specialty dealers, high end salons, etc.
And yes, some high end products you can now buy on musicdirect, audioadvisor, etc. etc. And good luck with that, because unless these customers are savvy enough, they will still need a high end person to install it. Listening to you, its like, this is old hat, those who adapted made out, while those that didn`t........... No, if you care about our little corner of the universe, then lets try to save whats left. I think it still needs to be discussed and dealt with today!!! Its that kind of thinking that has partially caused the demise. And then you say, its not an issue anymore, then it is a big deal. So, what gives?

I`d like to see someone buy a VPI TNT turntable with SME arm and cartidge on line,d and install it themselves. I don`t think so. But, we are now in the I-pod world, where convenience is truly the order of the day. Quality of sound is so far down the ladder, I`m afraid we will never be able to pick it up. So, I should be like you, oh well, it is what it is.................

And to accuse me of trying to hurt Home Theater Shack, definitely not trying to do that. I`m passionate about music, and the equipment that reproduces it, that`s all. And BTW, I worked in the AV industry for 13 years, so I have some first hand knowledge as well, as to what was, and is going on today. But, maybe its better you continue this conversation with my publisher.

**deacongreg** · **06-01-09, 04:33 PM**

Excellent, this is what I`m talking about. Is there anyone else out there, that cares??!!

**lcaillo** · **06-01-09, 08:57 PM**

Quote:

deacongreg wrote:

First, part of your reply should be directed at my publisher, the dropping like flies comment. You generalize this whole thing. Sure, this was going on a while ago, but its my contention, that is why the high end did not prosper. Long before the internet became and issue, this was going on. Now, years later, to walk into a high end salon and still encounter this same snobbery attitude, is really ridiculous. So we have what we have now. I was specifically talking about the specialty dealers, high end salons, etc.
And yes, some high end products you can now buy on musicdirect, audioadvisor, etc. etc. And good luck with that, because unless these customers are savvy enough, they will still need a high end person to install it. Listening to you, its like, this is old hat, those who adapted made out, while those that didn`t........... No, if you care about our little corner of the universe, then lets try to save whats left. I think it still needs to be discussed and dealt with today!!! Its that kind of thinking that has partially caused the demise. And then you say, its not an issue anymore, then it is a big deal. So, what gives?

I`d like to see someone buy a VPI TNT turntable with SME arm and cartidge on line,d and install it themselves. I don`t think so. But, we are now in the I-pod world, where convenience is truly the order of the day. Quality of sound is so far down the ladder, I`m afraid we will never be able to pick it up. So, I should be like you, oh well, it is what it is.................

And to accuse me of trying to hurt Home Theater Shack, definitely not trying to do that. I`m passionate about music, and the equipment that reproduces it, that`s all. And BTW, I worked in the AV industry for 13 years, so I have some first hand knowledge as well, as to what was, and is going on today. But, maybe its better you continue this conversation with my publisher.

I am certainly not accusing you of trying to hurt HTS. I never said that. What I said was that I agree with the general premise of the article, that the sensationalist into detracted and made it lool foolish, and that you are an articlate and intelligent person who can do better. Please stop attributing intent to my posts that is clearly not there. The problem of our apparent disparity in perspective has largely arisen from your inability to post a clear statement of your perspective and your somewhat automated post of what I still consider to be a "weak" article. Again, please offer your perspective and intelligent comment, as that is what is valuable.

Frankly, if you are lamenting the demise of the ultra high end retailer, you are at least a decade too late. Most of the ones that remain are insignificant to the larger HT market, and if they suffer from the problems noted in the article after all these years they deserve to go away. I come from an audio background and installed and aligned truckloads of tonearms and cartridges. That said, the process is no more complicated than understanding a convergence repair that thousands of DIYers do every week. That kind of repair is my "bread and butter," yet you can read pages of contribution on how to do it yourself here at HTS. The reason is that I have no fear of DIYers nor internet sales. When I was selling high end audio, we faced the same kind of competition. We built a clientele that respected our advice and selection of products, along with our services. Some people will look for the lower price or trendiest product. Some will opt for better service and support. Again, this is nothing new. These lessons were learned decades ago.

The fact is that much of the high end in audio has little justification, and many of the sellers do not provide the kind of service that you suggest is important. How many attend to room acoustics and provide for room treatments to go along with their outrageously expensive products? How many even understand the interactions of the system with the room. My experience is that many of the ultra high end people do not. The real value is to be found in many of the HT specialists that understand the limits of the equipment, the limits of the room, and the available technology to implement a complex system in a livable environment.

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