By Todd Ramsey
Having just returned from the SEMA Show, where I enjoyed a variety of forward-looking conversations, and then (just a couple days ago) having recently had a candid conversation with a colleague no longer active on the trade side of the 12-volt "car audio" business, it's clear that the divide between our collective interests and, more importantly, our collective willingness to work on something together, is still very apparent. It seems like an awful lot of the industry is just doing its own thing, somewhat oblivious to any kind of bigger picture.
The fact is, what we’re all finding difficult is the reality of relevance, or our lack thereof. What we USED to bank on as core products and services may not necessarily carry the same relevance when we’re looking forward — not looking back. It’s really obvious that we need to focus on three things as far as industry awareness goes (and when looking for our future opportunities through relevant innovation):
1) Integration with factory A/V systems (primarily by leaving what’s in the dash there and adding on where it makes sense) in a way that’s truly integrated and has tremendous value for the consumer. Since this is somewhat still dependent on professional installation and configuration, the real opportunities for tomorrow will be those who say “not necessarily” to the old convention of taking everything out from the factory and starting from scratch. It’s just not a relevant approach anymore. Improvements don’t always come from simply changing or adding parts.
2) Ubiquitous connection of portable devices to the vehicle, and user interfaces within the vehicle that make sense and are easy to use, oh, and if possible these solutions would be highly reliable too! Beyond the process of integration, we need to focus manufacturing, and even installer-level configuration of aftermarket products, on more intuitive and user-friendly functionality. This business of complicated menus and all around poorly designed user interfaces for drivers (not lab rats) is of great importance. To be relevant to a wide-ranging audience, you can’t have this ridiculous secret handshake so many of our so-called solutions have now. We can do better. We MUST do better, and it’s a lot easier to consider how we can improve when we’re using our own products in our own cars to benchmark where we can improve.
3) We have to be visible online in many places. People research and purchase products based on what they locate online, and the experience of going online to find things and learn about them is different for each person. There are plenty of people who will never look at iPad installation or SPL videos on YouTube. There are people who, believe it or not, do not live on Facebook. We need to recognize that being visible online is not just Facebook or YouTube (or other social networking sites). It’s not just having a website (but retailers — PLEASE GET A WEBSITE if you don’t have one). It’s not just Google search or Yahoo Local. It’s not just online reviews or links with other partners. It’s everywhere, and we MUST understand there’s not one silver bullet on the Internet but that we have to be “out there” to even be recognized, let alone be considered relevant, in each consumer’s mind.
In a nutshell, we really can’t expect any entity like a 12-volt Initiative or MERA to be effective if the pieces of the puzzle that we need to deliver on a value proposition still don’t exist . We can each be doing a better job of connecting with an industry viewpoint, not just our own little bubbles.
It's now a good three weeks after we initially posted a comprehensive blog article, immediately following MERA KnowledgeFest, about the 12-volt Initiative and our industry’s awareness challenges in general. I REALLY had hoped more retailers and other industry colleagues would have some constructive contributions to the discussion of how we can all do something better and more effective. I often wonder if anyone in our industry ever REALLY reads our blog posts!
If we’re not embracing radical new ideas of how we come into the car with relevance to our products, services, and expertise, we’ll just be asking automakers, Apple, Microsoft, RIM and Google to determine what we’ll become by default. You have to ask yourself if that’s really how you want things to happen when you say “Oh, I’m just too busy or uninterested to get involved.”
Tap, tap, tap………………is this thing on?
Often the great part about trade shows like SEMA is the fact that there are other things going on, plenty of other cool things to see at the show, and after hours fun as well. Attending the show for your business is just a fraction of the value you can get from attending trade events. Sometimes the camaraderie and networking after hours, as well as the interesting, somewhat unrelated to car audio things you find, are extras that add to the fun and excitement of attending these shows. It’s certainly been the case with this year’s SEMA show!
Kicker Big Air Bash 9
 For the past eight years Kicker has graciously put on the marquee event for SEMA Show attendees who have a passion for all things 12-volt. They bring in the rock stars of extreme motorsports jumping and give attendees an up-close look at incredible freestyle motocross professionals flying off jumps and doing tricks two stories in the air.
Sadly, Kicker announced that this year’s ninth Big Air Bash would be the last one in this format. Although Kicker is reserving the option to resurrect the event in another format, possibly at another location and time of year, it looks like the epic tradition of Big Air Bash parties at SEMA in Las Vegas have (for the time being) come to an end.
Thanks so much to Kicker for all these great years of putting on the coolest outdoor party at a trade show and for so generously including everyone who attended.
Pawn Stars from the History Channel
 Yes, we did it. When in Rome, as they say. Anyone who has watched The History Channel’s show called Pawn Stars knows it’s a Las Vegas-based pawn shop called Gold and Silver Pawn where three generations of men from the Harrison family — grandfather, father and son — amusingly clash while running the family owned pawn shop together.
The shop is located right in the middle of the Vegas strip on the old town side just a short drive from the Convention Center. A few of us 12-volt guys, including former Mobile Electronics Retailer of the Year, Kent Izuka of Security and Sound Systems in Hawaii, got into town early on Monday and decided to take a trip down there to see the random treasures we’ve all seen Rick Harrison and his crew collect from visitors to the store.
It’s an eclectic mix of art, jewelry, motorcycles, vintage Coke machines and random items you’d never think to even ask about. None of the cast members were there since we went by after hours, but we did get to see some of Rick’s personal collection of items that are not for sale, such as Superbowl rings and vintage weapons. After years of only seeing the inside of the convention center, restaurants and hotels, this was a nice diversion for us!
Peppermill
 Las Vegas locals frequent this iconic lounge for after hours food and drinks. Several of the 12-volt guys including Canadian Shaughnessy Murley, Installer of the Year Jon Kowanetz, and InstallerNet’s Kris Bulla were spotted there enjoying the drinks and casual ambience on the couches amidst the signature pink and blue lighting of the Fireside Lounge inside Peppermill. It’s the perfect stop for great after hours conversation with drinks and food at very reasonable prices with the ambience and history that many associate with a true Las Vegas experience.
PowerBass Hospitality Suite
 PowerBass graciously opened up the doors of their 24th floor hospitality suite to all the 12-volt folks who wanted to come and have a casual drink and some shop talk. After the MECP Masters dinner on Tuesday evening, a bunch of them hit the PowerBass suite for a visit and some cold beverages.
Other retailers, such as Mark Miller of Westminster Speed & Sound and Chuck Wallace of Ultimate Electronics, were already there enjoying the fun when the rest of the gang arrived. Host Robin McNeal, Vinnie DeStefano and Jason Hannon were all too happy to welcome colleagues for some after hours fun.
RK Concepts Motorcycle Art
While at the SEMA Show we came across what I can only describe as motorcycle art from RK Concepts of Austin, Texas. Designer Rafik Kaissi had four of his creations on display just outside the north hall and these are literally rolling sculptures of innovative industrial design.
From the “Chain Bike” with a frame and swing arm made of huge, industrial-size chain to the mechanical mastery of the “Fighter Bike,” these RK Concepts creations inspire us to rethink our approach to the same old things in our own installations. If even one or two ideas from these bikes inspire a theme in a car audio installation then we’re certain it’ll be pushing the envelope. To check out their awesome motorcycle art visit www.rkconcepts.com.
Here's the Chain Bike.
Next up is the Fatty Bike.
Last is the Racer Bike.
By Todd Ramsey
I think it’s pretty clear by the reactions from retailers to the 12-Volt Initiative’s announcement in our recent Mobile Electronics interview to move forward with a second outreach effort that there’s quite a divide in how each group in the industry sees itself (retailing versus manufacturing). Within that divide, I also noticed a second split in what each believes is the most viable path to increase awareness of the industry. It’s a challenge we’re all vested in, though. It’s one in which we all have a stake that is certainly the fuel for the passionate counterpoint commentary by some of the industry’s most recognized 12-volt retailers.
Well I am going to state the obvious — there’s no silver bullet here. There never was, and there never will be. Oh how I wish there were. I think based on the retailer comments in Greg’s most recent article, it’s clear we’re all becoming more aware of that reality.
The fact is, nobody actually needs a darn thing we sell. Not really. We have to do a really good job of creating interest and then actually delivering something interesting when people make the effort to “look us up” (whether online or in person). We have to give people a reason to shop with us as an industry.
I agree with the retailers’ comments about the off-base and ineffective Car Dance Mob video and What UR Missin website that the 12-Volt Initiative’s efforts produced. Let me qualify that with the fact that, now at the age of 41, I also quickly admitted then — as I do now — that I am WAY outside that target demographic. I may not be the best person to make an assessment of how effective I THINK it would be so I deferred to youth of all ages to ask their take. Not one of them liked it either. More importantly, the ones who did look it over in detail told me “I don’t get it” or “I’m not sure what I am supposed to do.” Given that, even if there were connected dots and a retailer locator pointing people to ANY retailer as there was, it was so watered down in trying to be brand agnostic that it ended up being, in my opinion, unclear about anything — including the categories on the website that followed the video. Manufacturers who participated — go ahead and hate me if you must. I just didn’t get it and still don’t.
Boy would I have liked to see that money spent in other ways that was more inclusive of industry participation and spent on multiple approaches — each with its own set of trial metrics. I think the retailers who commented in Greg’s article cited many great ways to consider spending additional money that would involve more industry people, even some enthusiastic consumers.
In any case, here is the sad reality that all of us need to face. Even if the 12 Volt Initiative’s maiden voyage had been successful in driving some measurable amount of people into stores for “purchase consideration” as it was called, what is the likelihood of those prospective customer visits resulting in a GREAT consumer experience?
Now think about that in a broad sense across all of the possible retail 12-volt venues (large, small and online) and ask yourself how likely is a consumer to have a great experience with our products and services in an easy-to-understand and trouble-free way as things are right now, today?
If you are being honest with yourself, you’d admit — as I have — that it’s a convoluted maze of anywhere from great to disaster with a lot of mediocre in between. As an industry, we could all be doing a better job of giving customers a reason to open their minds and wallets to our products and, more importantly, the services we CAN offer them — many of whom have no idea of what we CAN do.
The 12 Volt Initiative will never be truly successful, even if they come up with a hip marketing campaign that everyone likes, until it’s able to effectively help retailers create a great experience at the majority of 12-volt retailers nationwide. If you think about it, this business of holding next to nothing in inventory for the smaller retailers, having no showrooms OR demo cars to deliver some kind of in-person experience, the fact that so many independent retailers are without even so much as a website, the larger big box retailers having no dedicated, customer-facing sales people or product experts, online retailers peddling a mix of authorized and unauthorized goods…, these are all things that contribute to the limitations we have as an industry right now to deliver, on any given day, a great in-person experience to prospective customers.
If we get into the whole mess of defective products, many of which are not really even defective in the end, we add another layer of secret sauce to a burger many consumers are simply not interested in eating. It’s too complicated and often comes with a risk of wasting the consumer’s valuable time. We can do so much better on delivering what we promise.
Where are my encouraging words in all this? We need more retailers of all sizes delivering on their promise and providing consumers with great solutions for their aftermarket 12-volt electronic needs, even if the consumer isn’t entirely certain what their needs are or what’s available to them. Although there are many fantastic independents out there, there are many more that are treading water at best. The medium and larger retailers also could be doing more to implement broad-reaching awareness of solutions (rather than just products) they can offer.
As I said in my speech at the recent Mobile Electronics Magazine Industry Awards during MERA’s KnowledgeFest last week, we need to be Technology Ambassadors. Every one of us needs to walk the walk for the talk we are talking and share what’s cool, exciting, entertaining, safe and productive with people who may have a limited understanding of what we do.
Any 12 Volt Initiative should be inclusive of the whole industry if it’s ever expected to bring results that people in our business will recognize. In fact, I believe the positive result won’t be any marketing or advertising campaign, but rather it’ll be the rewards that our individual efforts combine to make the machine run better. The sum of the parts is much more powerful than any one piece of our industry individually. I believe that’s our ultimate path to a better 12 Volt Awareness Campaign.
Time for a gut check as an industry! Where do we want to be in a year or two? How about in five years?
What do you think? Let’s hear your comments and suggestions about how we can move ahead, not how we can rehash the past!
Mobile Electronics' Editor Todd Ramsey declares MERA's Executive Director Chris Cook "safe" at KnowledgeFest 2010. MERA successfully brought the industry together at this year's event.
By Todd Ramsey
Earlier this year at 2010 CES, InstallerNet (the new owner of the Mobile Electronics Retailers Association) had an announcement about the whole changing of the guard in a press conference on the floor of the show with the theme “Come Together.” It was unclear at that time what that would mean, but after having just returned from the 2010 MERA KnowledgeFest trade show in Dallas, I can say first hand, as a participant in the seminars and as an attendee for others, MERA did just that. The industry really did come together.
Of course our own Mobile Electronics magazine Industry Awards were fantastic. Thanks to all of the industry colleagues who attended and laughed along with my “How bout that ride in?” comment during my speech and our funny video put together by Joni Owens and the creative staff at Bobit. We were proud to honor our industry’s people and the companies making a difference.
On to the KnowledgeFest event! First, let me say kudos to ALL the presenters who worked to deliver highly relevant and engaging content at this year’s KnowledgeFest. I think the sessions were all great, particularly because they came from industry people, which was ideal for this audience. I know many of you who attended found them to be highly relevant to your business and your job.
MERA was not shy about keeping attendees fed, engaged in networking round the clock, and highly focused on the many themes of industry change discussed throughout the event. I think everyone got plenty to eat and not enough sleep!
Some of the keynote speeches during lunch each day on the show floor included executives from Pandora and RIM (BlackBerry) who were publicly saying to manufacturers in our business that they want to work with us to create technologies that work in vehicles that our industry can install. A lot of big-picture stuff there.
By far, networking was the one thing that makes the in-person attendance priceless. You’d never really know the value of making that effort to go to KnowledgeFest this time around if you did not see and experience it for yourself. Really, it was a vibe that was absent of any doom and gloom and that, for whatever it’s worth, was enough for me to say there are still many great opportunities out there for our industry if we can focus on the positive energy circulating at KnowledgeFest. They already announced that next year’s MERA KnowledgeFest will take place in the same location August 28-30, 2011.
From the perspective of industry education, the seminar program at KnowledgeFest was one of the better ones I’ve been involved with in a while. Nearly all the presenters for the technical classes at the event were MECP Master certified, and I think it showed in their level of expertise, the caliber of credibility, and their willingness to share their knowledge with any of the attendees. So many of the owner/manager and sales sessions were led by successful retailers, including several sessions by our Mobile Electronics Single Store Retailer of the Year winner, Mitch Schafer from Mobile Edge. This was an excellent environment for approaching any of the experts and to talk one-on-one with them, sometimes until the wee hours of the morning.
I will summarize the 2010 MERA KnowledgeFest event with an analogy (because I love analogies). If this KnowledgeFest were a car build, we’d say the engine fired on ALL CYLINDERS the first time out and that the things to review were very minor, such as tire pressure or the torque of the lug nuts, and in the context of the show, mostly related to scheduling. MERA can focus on improvements to an already successful event for next year, and the good part is they have 10 months to do it. Archiving the event for revisiting by attendees in an online format was discussed and would be a great way to keep attendees engaged and interest potential attendees. In other words, I think it was an overwhelming success from the perspective of professional education and also from the perspective of re-positioning the “New MERA” in people’s minds. It’s what it needed to be. It was great, and I’m going back next year.
By Todd Ramsey
Key Questions:
What’s your ideal trade show?
What motivates your attendance?
What provides a great sense of value for you?
Help us learn your preferences and concerns about industry events by answering these important questions in our latest Mobile Electronics blog post. We want to understand more about how the industry can successfully find more common ground around trade shows and events!
It’s been a discussion for years. Some of the bigger Vegas-based shows, such as International CES and SEMA, have seen changes in attendance by vendors and retailers (a.k.a “buyers”). Other industry-specific trade shows, such as MERA’s KnowledgeFest, an option for 12-volt specialty retailers, are going through a rebirth. Then there many other suggestions about whether an ideal trade show should allow in consumers, should or shouldn't be tied to a car audio contest, etc. It’s a buffet of suggestions that’s a lot like a pot luck dinner. Nobody seems to have all the same things every retailer and exhibitor attendee wants, but the business of getting together is still very much necessary in our business. Trade shows are still important for retailers and vendors that want to stay plugged in and moving forward in business.
To that end, please help by using your voice (well, actually your keyboard) to provide insight into what principal elements motivate you to attend a national trade show where the focus is on business. If you would like to take the complete survey, click on the link below and fill in all the answers. If you would like to give us some general comments, please leave them in the "comments" section of this blog post (click on "comments" at the bottom).
Click here to take survey
1) What is the main reason you would go to a trade show? (Select only one please)
a) To see manufacturers or find new ones (or if you are representing a manufacturer, to see existing dealers and find new ones)
b) To see/display new products and trends, regardless of whether or not I do business with them right away
c) To see show cars, get ideas for installation trends
d) To attend educational seminars and for general industry enrichment to stay up to speed
e) To network with colleagues from all facets of the industry and build long-term relationships
f) To have a vacation, maybe party a little, and do a little business while there
g) Other - please describe
2) What are two secondary reasons you would go to a trade show? (Choose two)
a) To see manufacturers or find new ones (or if you are representing a manufacturer, to see existing dealers and find new ones)
b) To see/display new products and trends, regardless of whether or not I do business with them right away
c) To see show cars, get ideas for installation trends
d) To attend educational seminars and for general industry enrichment to stay up to speed
e) To network with colleagues from all facets of the industry and build long-term relationships
f) To have a vacation, maybe party a little, and do a little business while there
g) Other - please describe
3) What choices listed would make you more willing to attend a show if the above two questions were addressed? (Select all that apply)
a) Done as a trade-only event
b) Done as a trade AND consumer event
c) Done in conjunction with a car audio contest
d) Done in conjunction with a car show or car-related event (describe)
e) Done in a particular part of the country (describe where and why)
f) Other - please describe
4) What things listed would limit or cut back your willingness to attend a show with the questions 1 & 2 addressed? (Select all that apply)
a) Done as a trade-only event
b) Done as a trade AND consumer event
c) Done in conjunction with a car audio contest
d) Done in conjunction with a car show or car-related event (describe)
e) Done in a particular part of the country (describe where and why)
f) Other - please describe
5) As things stand right now, today...what is (or was) your favorite trade show to attend and why?
Write in your response in your own words
Click on the “Comments” below and just type in your responses by question number as an “Add New Comment.” Let your opinion and voice be heard. Let’s let the industry know what people attending shows want and need in order to come away with a lot of value for their time.
By taking some time to answer these questions and elaborate a little bit on our blog, perhaps we can all get a better understanding of what each of us thinks is the ideal venue for them to be motivated enough to attend.
Earlier this week, industry sales veteran Ray Windsor sent an open letter to members of the industry describing the peril he sees for the 12-volt market given his recent experience during the preceding weekend at a local electronics retailer. Although Ray’s experience was related to the intent to learn about and purchase home entertainment electronics, it’s really easy to see some of the parallels in our own industry.
Read it and I’ll comment on the other side.
An Open Letter to Specialty Retailers
After an experience visiting a home theater specialty retailer near my office, with the goal of gathering an education and making a purchase, 7.1 receiver, DVD player, cables, etc., I am not sure if I came away with an epiphany or an intense case of fear, nervousness and frustration.
This specialty retailer is in a location that you cannot get to from here. It was mid day Saturday. All of the TVs were on. I asked the clerk (read “clerk” with disdain) about the difference between 5.1 and 7.1 system configuration. The difference was explained to me. He made an attempt to demonstrate the 7.1 sound in their high-end room. After about 10 uncomfortable minutes he was unable to coax any sound from the elaborate set up. My enquiry about Blu-Ray DVD was met with similar results. Forget the speaker demo. It’s OK (sort of). I understand how folks might “rob” the demo room in a product availability emergency. Maybe a cable was missing…?
My real fears result from the clerk’s absolute lack of interest in learning about where I was in the education / buying process. He allowed me to direct the entire affair. My questions were answered for sure, BUT THAT’S ALL. Forget about “How long have you been thinking about this? Where have you been looking? Do you have a big TV, theater system, audio system at home now? Are you going to do the installation or have it done? Is this a project you are in the beginning of or just finishing? Etc., etc.” Who let this guy on the floor? Management?
No attempt to understand the state of the consumer was made. No attempt to make a sale. No attempt to add knowledge other than answer the questions. No difference from the big red COKE machine in front of the body shop next door. A complete waste of time for me as a consumer. Another nervous point on the education graph, extending a disturbing trend line for me as a manufacturer committed to championing the value of the brick-and-mortar specialty retailer.
Half an hour later on the Internet I learned that I should have a DVD player with Internet connection, built in Wi-Fi, and at least HDMI version 1.4. I learned about 7.1 receiver power, inputs, outputs, digital, analog, tuning and a myriad of other important features. I did not possess enough knowledge to ask these questions of the clerk when I entered or left the brick-and-mortar store. Of course I learned price variances. (Kudos to Yamaha, Denon and Audioquest.)
Is this the common experience of the consumer who seeks out a brick-and-mortar specialty retailer with the intention of making an immediate purchase OR is this just an anomaly? Retailer had a bad day? Unfortunately I have this kind of experience more often than the brick & mortar specialty retailer or manufacturer community should feel comfortable with.
Do manufacturers really need brick & mortar (value add) retailers if this is the kind of value added? The Internet (COKE machine) pages offered up more information, and every page tried to close the sale with a “BUY NOW” button. I note that several of the brands mentioned above performed admirably in their endeavor to manage pricing on the Internet. It can be done.
If a brick-and-mortar specialty retailer won’t even try to create a sale to a flesh and blood consumer standing on the floor in front of him, what respect (forget loyalty) should he expect, does he deserve, from the manufacturers under his roof who did not receive even a poor shot at the deal?
With tears wetting my keyboard, pain in my heart and great concern between my ears for the future of brick-and-mortar specialty retail, I will make my purchases at FULL RETAIL on the Internet.
Somebody help. Convince me I am wrong. Contact me at (877) 689-7833.
Ray Windsor
Although some may see this as unrelated to our 12-volt business because it involved home entertainment products, I see it concurrent to John Haynes’ letter to the industry (which we covered in an earlier blog post) on the opposite end of the supply chain. It’s yet another reason that retailers of CE products in general, but also of car audio, are providing fewer reasons to get consumers to buy in a brick-and-mortar environment and why consumers are making the choice to shop online. It’s not enough that some brick-and-mortar stores are doing a good job and are knowledgeable. By and large, it’s pretty evident that as an industry everyone at every location needs to know our CE products better and how to ask the important questions that ensure customers get something from us they can’t completely get from purchasing online… or can they?
John Haynes, in his letter, was concerned that manufacturers are offering certain online retailers the products directly (or looking the other way when they’re not purchased directly), which creates an imbalance on the playing field. Traditional supply channels are certainly challenged by consumer access to the Internet and the ease of online shopping, but WHY is that happening in the first place? Sure, some of the manufacturers in our business want to grow aggressively, but it’s more because many manufacturers are simply trying to mitigate the shrink from the sectors that used to sell more of their products — namely the specialty retailer and, to some degree, those larger regional chains (like Tweeter) that closed or no longer sell our 12-volt goods.
Then you have Ray’s experience where, commendably, he tries to live by the same credo he’s often suggesting that retailers can find and be a customer himself in a brick-and-mortar retail store. As you read in Ray’s letter, it was only to find out firsthand how poor that particular retail experience was. It’s often really coming down to the need for better, more qualified customer facing salespeople. At the very least Ray’s experience shows they lacked overall in product knowledge and hands-on experience using the products, let alone the wherewithal to qualify a customer to ask what should be mandatory questions. It’s sad that Ray had a bad experience in a retail store. I too have had some myself.
Really, I see Ray’s commentary as identifying a big issue at the other end of the supply chain and explaining how the Internet is a viable resource for consumers, both because the online retailers are supplied and the fact that, particularly in this case, they filled the demand much more effectively than a brick-and-mortar retailer demonstrated they could. It’s a cautionary tale, I believe, one that 12-volt retailers might want to sit and absorb.
Sure, I know there is just as much of a chance that Ray, or any of our potential customers, could have a great experience shopping us in the 12-volt aftermarket, but I think we all know we could be doing a better job at this. It’s a goal that’s constant, no matter how good we think we are.
Lastly, I will say that in our recent Mobile Electronics magazine Industry Guide survey, retailers who replied showed us that more than 30% do not even have a website of their own, and many relied only on their Facebook, Myspace, and/or Twitter presence for their online efforts. With a situation like Ray faced, if Ray happened to have a similar experience with a 12-volt retailer, how would he have found a local alternative if those retailers who COULD HAVE SUCCEEDED in meeting Ray’s needs DO NOT EVEN HAVE A WEBSITE? Why would someone drive across town to see a retailer if they have no other way to learn about them as a company or even know at all if they were there? Think about it.
If you think online retailers are winning, then it’s because they are making themselves accessible to the consumer. Some do a good job of it, some do, well, not such a good job of it, but the online retailer has put themselves in front of the buying public. If you’re a brick-and-mortar retailer without a website, what are you waiting for? You do not have to sell products online to have an online presence and appeal to customers, particularly local customers. First, they need to know how to find you and a little about what you offer, then you follow through with them in the store.
We are in a high-tech business so we can’t act like low-tech people. We need to meet needs of a changing customer contact point profile — which absolutely includes making the retail shop visible to people surfing the internet!
Share your comments for Ray and for us below, particularly if you have some helpful suggestions for an industry that could use some fresh ideas!
What happened? We used to be known for lots of premium products in our industry back when we installed things in peoples' cars that were, at the time, innovative and hard to find. That was a long time ago. In this post, I attempt to identify some of the problems (or you could call them challenges if you want) that independent 12-volt retailers encounter when answering the question of where they fall on the spectrum of offering commodity or premium products.
Although we, as an industry, have created many new product categories outside of "car audio”, many of our products are simply commodities now. It’s not like in the 1980s and (for a while there) in the 90s when we had things that you just couldn’t get anywhere else. What we offer as an industry, for the most part, can be found just about anywhere that other, similar items are sold. Let me put it another way; to many consumers, the products in the same category do the exact same things for the most part. If you are an independent specialist 12-volt retailer, I'm not telling you anything you probably don't already know.
Some of the newer product categories include adding Bluetooth hands-free functionality, portable device integration, OEM audio upgrades, safety systems such as reverse-backing aids, GPS vehicle tracking and others. Since many of these new product categories still involve aftermarket car electronics, they sometimes suffer the consequence of a commodity because of the supply chain in which the majority of these products come to market. It all depends on how they are being presented to end users by retailers and what solutions these new product categories provide.
The possible exception of the dealer-expediter channel is one which still allows tiered margins in solution-oriented product packages that sort of automatically get passed to the consumer, often wrapped into vehicle loans. It's transparent to the end user in that channel, at least when it comes to the nickel and dime differences that appear when shopping for a single product. It also doesn't hurt that in the dealer-expediter channel, the dealership usually will stand behind the product and installation as if it was their own instead of hanging voided warranties in a customer's face as they so often do with aftermarket electronics not purchased with the car. Car dealer work can also be tough to get, at least initially getting “in,” with the dealers and leveling out on cash flow as they start paying on terms.
Product wise, we have some cool new twists on old favorites, but we are basically still saying take this thing out and put our thing in its place with many "core" car audio products. Although that approach used to work to improve a vehicle's sound, it's not necessarily the case anymore. The parts-changing mentality isn't necessarily a guarantee that the sound will improve. Sure it'll change, but there's no guarantee it'll improve. The fact that we have a lot of products that do much of the same thing leaves consumers with (a) a lot of choice or (b) a lot of confusion.
Even though I personally think it’s both of these, the reality is an abundance of supply and confusion about whether or not any one single offering is clearly better (meaning worth more money or effort to find/get), you are going to have the challenge of maintaining any kind of MSRP or MAP pricing with that abundance. This is true even if it’s a perceived abundance (in other words advertised everywhere, even if it’s not really always readily available). Now, the market of what people are willing to pay (with no other clear distinction) sets that price. That's our first problem with this commodity challenge. We’re pissed off about things that we’re essentially clerking, not necessarily selling!
The second problem is that our clientele is all over the place in terms of the demographics purchasing the different product categories, but it's clear that a lot of retailers - focus on a challenging, web-savvy group of 16-30 year old males and then also with products that are really commoditized. My view there is why play that game? You aren't going to win people!
Here’s an idea; let your customers who shop you on price for something that may be very low margin for you to be competitive, and that’s widely distributed such as head units, buy them elsewhere (like online) and then sell customers the installation, sell them the adapters, and all the other costs of getting that head unit in there. Sell your services and let the warranty and return (if necessary) be their problem. With some of the entry level car audio products , maybe it’s not even worth your time to deal with it if it’s going to be a price war. With a few exceptions, why even offer more than 2 or 3 premium head units with at least SOME margin? Why not consider WHICH 2 or 3 multi-channel amplifiers meet the customer’s needs for functionality, footprint, and value and sell only those. Why not sell only the things you can profit from and that have fantastic results and reliability?
Here’s another; maybe offer a couple entry-level loss leader 12v products from any of the popular categories to get people in to the store, but you have to ask yourself as a retailer if that's attracting a customer for a commodity product (the answer is yes) and if that's in your business' best interest. A retailer can play that game, he or she just needs to be prepared to accept lower margins on what he or she is selling by offering products that everyone else sells to be able to get the sale and gain a customer. We simply can’t expect 40-plus point margins on every commodity item we offer. You can’t clerk things that people come in and ask for and expect a payout from selling those same things. It’s not a reality in today’s world. It's completely the retailer's choice, but you can't have both paradigms of commodity and premium value propositions in the same product at the same time.
To put it another way, why not swim in a better pool than one that's full of too many people swimming in too many directions? Why are independent 12-volt specialist retailers jumping in and trying to swim around in that crowded public pool where all the rest of the commodity sellers are swimming and urinating at the same time? What are we – a bunch of rats in a cage just hitting the feeder bar for a pellet because that’s all there is to do? Come on people. Surely you can have more input into the destiny of your business than that! It's just too easy to shop for commodity products of any kind (not just 12-volt) on price using the Internet. The second problem in a nutshell then, is that many independent specialist retailers focus far too much effort in an already challenging and crowded space when they could focus on so many other things to improve their business. Don’t just be good at what you do, be GREAT at what you do. Be the best in your community to the degree there just isn’t anywhere else people can go to get that experience and reliability. Be THAT retailer!
The third thing is that, when it comes to the product categories 12-volt retailers can make money on (let’s call it premium items — regardless of actual cost), they are not always firmly adopting them into their primary group of offerings during sales presentations, in customer-facing marketing, and they are probably not demonstrating (in person to prospective customers) the value or uniqueness that these products offer to a particular customer. Whether it's a great audio experience with products YOU specifically choose to endorse and recommend, or pairing someone's Bluetooth phone to their demo car/demo board and showing how the hands-free call process works, or showing back-up cameras and sensors in a "community vehicle safety seminar" they host, 12-volt brick and mortar retailers could be doing a lot more to take command of emerging categories and products in existing categories that they can dominate. Sometimes to do this you have to get out from behind the counter, get out of the store and go identify those places to deliver your message!
With this commodity versus premium products perception problem comes the fact that smaller, independent retailers are often not evolving to actively identify the innovative and opportune products, perhaps because some of this is not "core car audio" that appeals to their own interests and lie in their comfort zones. The bigger picture is that a specialist retailer needs to cherry pick what's innovative or what's opportune yet not being exploited as a commodity in all of these product categories and then go after them vigorously. Become the authority and the expert. Act faster and more proactively than the bigger businesses can. Although some independent retailers are doing it well, most are not.
Let's hear your challenges and success stories! What categories do you see as your current and future opportunities? What are you doing as a retailer to carve out your specialty expertise and opportunity among the many products available to you? What are you showing customers, promoting, and getting people excited about?
Please post here in the comments section and let us know!
John Haynes, Product Manager for Al & Ed’s Autosound, a 24-store specialist 12-volt retailer in Southern California, submitted a letter to Mobile Electronics magazine recently. He said it was an open letter to the industry. After much thought about the contents of the letter, I thought it was appropriate to comment about how we might help to frame the concerns that John, and probably every brick and mortar retailer, should share about the future of relationships between vendors and retailers.
Here’s a copy of the letter. I provide commentary afterward:
Pirates Legitimized: The Next Great Threat to the Mobile Electronics Retailer
It’s been a tough couple of years, starting with the economic crash in October, 2008. The U.S. economy, and specifically any industry that was tied to disposable income, took a real hit. Unfortunately, the mobile electronics industry doesn’t sell a single thing that anyone needs. It only sells products that people purchase when they have a little “extra money”, and when the family savings is paying the mortgage or putting food on the table, the retailers suffer.
Things are starting to improve, though, although slowly. We’re getting better news from Wall Street, the government pundits have officially announced that the recession is over, tax refunds are flowing and consumers are once again feeding a pent-up demand for entertainment. Things may not get back to the glory days of the mid-1980s, but it looks like it’s going to be OK, after all.
But, as consumers return, a new threat to the industry looms. It’s been growing over the past few years, getting stronger and stronger, and now threatens to cut up the limited consumer pie into smaller and smaller pieces. The unauthorized, grey-market Internet retailer has been gobbling up customers at an amazing rate, and now are some of the biggest mobile electronics retailers in the country. Of course, they have a slight advantage over the “real” dealer — they don’t have to abide by Minimum Advertised Pricing policies, and they have captured their market share by cheating the authorized retailers out of legitimate sales. Hey…why should your customer buy at MAP when many retailers are willing to sell the stuff for a few points over cost? You already know who these online hijackers are, but if you don’t they’re easy to find. Just go to Google Shopping, eBay, Amazon or PriceGrabber and type in your favorite model number. Sort prices from low to high, and you’ll have your list.
It’s not the customer’s fault. Charlie Consumer, sitting in his bedroom at 2:00am, can’t really tell the difference when they’re shopping online. In fact, the websites that many of the illegitimate retailers run are some of the best on the ‘net in terms of presentation, information, support and policies. Most are not the shady “bait-and-switch” type of operations people talk about. In most cases, they will ship brand-new product, on time, and handle any warranty issues. It’s easy when they do million of dollars in business to absorb a return here and there, and they’re willing to do it to maintain their customer satisfaction ratings. In a way, it’s better to be unauthorized — at least that way you don’t have to follow any rules.
But times change, and right now product pipelines are tightening up. The recession caused many manufacturers to pull back on production, and large backorder situations are the word of the day. Some manufacturers are taking a look at the industry, themselves and their distribution channels, and have decided to reclaim their brand value by tightening up on loose product shipments. Some of our manufacturers have always been tough, believing that their integrity is greater than moving a few more boxes of product. All of this has caused shortages in the grey-market shops. Of course, there is a way to make it a lot easier to get product to sell, and many of the online cheats have made their phone calls.
Now, these companies want to go legit, and be authorized by the manufacturers. One online predator is even adding installation bays to skirt some of the contractual blockades put in place. Believe it or not, the manufacturers are talking to them, too. After all, they sure represent a lot of business. They’ve sold a bunch of it so far, so why not? Some vendors have even said things like: “If we authorize them, then they will have to comply with all of the rules. At least we can control them better that way”, or “they’re just going to do it anyway, we may as well authorize them.” While that may be true, there is a bigger and more important issue.
What about the retailers already in place? What about the 12-volters who have been struggling against this onslaught, doing their part to educate the customer, to do quality installs and represent, proudly, not only the brands, but the industry? For years, they have given up customers to retail pirates who hijack their customers with unfair pricing that most manufacturers seem to do little about. What about those guys? Is it right that now, the very people who cheated and stole their way into consumers’ hearts, are to be legitimized and be allowed to cut into the limited consumer market with the manufacturer’s blessing? I don’t think so.
There are enough customers for every legitimate dealer, and the customers will find them if they’re not distracted. The thought of the online pirates, who basically flew the middle finger at the manufacturers, the authorized dealers and the entire industry, sitting down and talking to the vendors is a crime. It’s not fair, it’s not right and it should be stopped. Maybe the right answer is: “Sorry, maybe you should have been more cooperative when we asked you to stop destroying my brand value. We’re fine with the dealer base we have.”
The discussions are already happening. Vendors are already being lured into talks. I’m urging each and every mobile electronics retailer to make a stand. Call, write or e-mail your vendors and give the word. Let them know that you are a proud and supporting dealer, that you and the industry have been damaged by the grey-market pirates, and that you would sure appreciate it if your vendor would support you, instead of them. I’m challenging each vendor to think about the way these companies have done business, trashing their product pricing and damaging their dealer base, and to tell them “No, we’re not interested. We have enough dealers”. Even better would be for our manufacturers to make a corporate statement denouncing these retailers and stating their support for their existing, authorized dealers.
It works in other industries; it can work in ours. With all the challenges facing us today, we don’t need one more big one, the legitimizing of the current crop of industry cheaters. Let’s not reward their bad behavior with the prize they are seeking — product flow and the badge of “Authorized Dealer.”
John Haynes, Product Manager
My comments on John's letter:
John makes some very valid points in his letter. I don’t believe that it’s only because of a recession that people are “looking around” on the Internet for great deals. I believe that the Internet is a vehicle that delivers such robust information in such short periods that just about everything (with the possible exception of impulse buys and dining out) can be researched, analyzed and even purchased online without ever having to leave the comfort of one’s home or office. It’s the Internet age we’ve all been hearing about, and it’s actually been here for some time. It’s just in recent years since the slices of “12-volt pie” are getting thinner for everyone in the supply chain that it’s become a serious point of discussion. What are we going to do? What do we want to be when we grow up as an industry?
Certainly the industry has matured. The things we offer and install used to be scarcely available in all but the most premium cars, and now that’s changed considerably. The electronic entertainment and safety creature comforts that come with today’s cars are getting better and better. This leads me to our framing of John’s position.
If cars aren’t getting any easier to work on, and integration with existing electronics (rather than complete removal and replacement) continues to be how we must approach the installation of our equipment, then it’s an interesting paradox that so much of the complexity of the equation is left up to chance when products are sold over the Internet rather than through an installing brick-and-mortar retailer. We’re leaving a big X factor out there assuming that the products will be installed correctly and safely. We’re also betting that the customer’s user experience in this scenario will leave them satisfied by what our industry offers. That’s a real big X factor — as unknown as what it’s going to take (time and money) to clean up the BP oil spill in the Gulf (though this is obviously not a direct comparison). Nobody really knows yet what the long-term costs and implications are to the Gulf region, just as we can really only speculate as to how the continued sale of our 12-volt products, well below any MAP pricing policies and without some certainty about safe and correct installation, will fare for us as an industry.
Looking at it from some manufacturers’ perspectives, particularly the head unit companies, they sell in many more channels than just specialty brick and mortar independent retailers. If the brick and mortar retailers are only a small piece of their distribution channels, then isn’t it already clear that they must branch out beyond the 12-volt industry anyway? It’s not like Pep Boys and Sears haven’t been already selling brand-name head units and speakers for years now. Many of those larger retail outlets have also had an online presence too. So what’s the answer?
I believe that although head units are still a viable business for used cars, the specialist retailer has many more opportunities to provide a consumer with better sound, increased connectivity and more entertainment when driving with a mix of products that may or may not include head units. It totally depends upon the customer’s vehicle. As in my last blog post, I underscored the importance of having something to demonstrate, first-hand, what your reference of great sound in a car really is. Add other more “installation intensive” products like safety, security, remote start and complex audio pieces and it’s easy to see where it becomes important for distribution of a product to include HOW that product will be installed for an end user.
I will say that on top of this, retailers MUST have robust websites that drive customers to their stores. Manufacturers who SAY they support specialist retailers need to be on top of providing brick-and-mortar retailer locators. It’s a little unfair to have a manufacturer showing products on their own website and then drive the online consumer right to an online retailer, to a national retailer, or to an invalid/unscrubbed database of retailers who may not be delivering the kind of experience we’d like customers to have. If the customer is provided the information they need to visit a retailer in person, the 12-volt retailers with brick-and-mortar stores need to also be willing to present a professional image to the customer leads referred by manufacturers. A great website is a must-have in this case, as important as a demo vehicle, in my opinion.
Of course we all buy things online. Well, most of us anyway. From time to time, even people like me who want to support local businesses simply can’t find what I need or find anyone to demonstrate a certain degree of expertise about a given product or service. In some cases, buying online is a means to an end because a local business or retailer didn’t even try very hard. I am just pointing out that even though we might not like the availability of car audio at online retailers, it is part of the world we live in today. The question is, how are we going to deal with it in a way that’s right for the long-term health of our whole industry?
Knowing we are not going to arrive at a solution today, how do you feel (and this is directed at all areas of the business — manufacturers, retailers and everyone in the supply chain in between)? How has the unauthorized, online retailer situation affected your business and, if so, in which categories specifically? How do you feel about larger vendors considering some online retailers as “authorized” partners? What companies are shining stars in your business relationships right now?
Please let us know your comments by posting a response below!
By Todd Ramsey
For some time now I have been beating the drum that, as people in the 12-volt Aftermarket Automotive Electronics industry, we need to have the stuff we sell and install in our OWN cars. In an Editor’s Forum column in Mobile Electronics magazine earlier this year, I volunteered that I have been one of those people who, sadly, had been lagging in my efforts, over a period of years, to get aftermarket gear in some form or fashion into my own vehicles. Although I did a few things over the past 5 years to my vehicles, they’ve amounted to only the addition of head units or a GPS navigation rear-view mirror. I haven’t had a real audio system since probably 2004. So, in essence I volunteered to you all that I was part of the problem that our whole industry has — not making the time or effort to install the things we ask other people (i.e. customers) to purchase for their cars! I am not alone though. What a bunch of hypocrites we are!
It all started at this 12-volt Awareness Summit in Dallas, Texas, nearly two years ago now. Along with many people who I’d consider industry leaders, I flew to Dallas so we could all hold hands and summon the “awareness gods” and figure out how to raise industry awareness of our category to people who already knew of us (but perhaps thought we only put large, neighborhood-disturbing audio systems in cars) as well as the many, many people who knew nothing of us. The latter group, of course, was the most challenging to figure out a strategy to reach because many of them have gotten by just fine without using ANY of the technology we sell or install. Maybe they have it from the factory, maybe they just don’t care, maybe (we theorized) there was a notable contingent of regular people who simply wouldn’t know what we had to offer in the way of 12-volt aftermarket automotive electronic enhancements unless we could SHOW IT TO THEM! Go figure.
At that very same meeting, I asked a whole bunch of people across all industry categories (executives, non-execs, retailers large and small, reps, and even association and media people) if they had audio systems or other 12-volt aftermarket electronics in their own vehicles. Guess what the answer overwhelmingly was? “No, I have the stock system,” or “No, I haven’t done anything to my car.” WOW — that’s something to note right there and something that got me thinking. We’re at least partially to blame for our situation. We did this to ourselves. Without cool products to install and then show to our customers, we can’t very well make the case that these prospective customers should purchase and install them in their own cars. In essence, many of us industry people are not walking the walk.
There are many reasons for this. We might not actually like what’s available sometimes (which is often my position). The reliability or performance could be questionable, or for the price it doesn’t provide significant value for us (and thus the customer). The supplier might have issues when it comes to availability, support, or warranty. Sometimes you’re just flat out are challenged by the scale of getting something into your car because you’ve made it into a big project in your mind, or the car offers a difficult technical challenge on its own. For all those reasons, and probably many others, we’ve gotten really good at not installing the equipment we sell to our customers. We have gotten really good at saying we will eventually get to it and yet we don’t. That, my friends, sucks!
The thing is, if it’s that much of a hurdle for us to engage in the process, what do you think the public at large feels like? We must consider our approach to offering what we can sell and install so we’re not reinventing the wheel for weeks on end with projects that don’t quit (and often end up paying out poorly). We have to think more about what can be done in several days, maybe a week’s time. For the majority of prospective customers, that’s well within your target.
In my own 2008 Chevy Tahoe I’ve been enjoying a Rosen Factory Fit GM head unit (with all the bells and whistles) and recently installed a JBL MS-8 to enhance the sound of my non-Bose factory speakers. I am going to put an Infinity Bass Link in for a powered subwoofer and Hertz entry-level component front speakers (with Scosche’s Accumat sound deadening) in the short term for a simple upgrade to what I have already done. Later, I plan to do separate amplifiers for front, rear and sub (possibly JL xD) with a custom enclosure in the rear (driver’s) side panel. The subwoofer is still to be determined as it depends on space and amplifier power. At that time I will probably revisit the component speakers in the front and move the existing ones to the rear. I also have a Clifford 590.2x two-way security/RS system with a SmartStart module for use with my iPhone.
I am not building a month-long install, nor am I trying to compete for Installer of the Year. I drive my vehicle regularly (as do most of you), so I want to do measurable upgrades, live with them for a while, then move on to the next step. By adding upgrades this way, I believe I can speak with relative certainty when I recommend things for others, particularly when it comes to taking into account the overall plan for what they are trying to accomplish and the reliability of these products over time.
What do you have in your own car? Post it here in the comments and let us know. Also if you have nothing, please post that too, only let us know WHY you’ve got nothing in there (yet). What are you waiting for?
By Todd Ramsey
For so many 12-volt specialist retailers, getting it right with the customer on the first job is key to establishing the perception that they are experts, particularly when they have already closed deals and customers are anxiously waiting on the installation of whatever it is they’ve purchased. Although much of the challenge to getting all the elements right is within the control of the retailer, there are always a few things retailers and installers consider wild card elements. One of these is product failure and the process and hidden costs to get it taken care of.
Here’s the scenario: Small retailer special orders an item or sells something they don’t regularly stock more than one of. Installer puts the item in (perhaps as part of several things being installed) and discovers a failed product out of the box. They retrace some steps to try to gather information that may accompany a tech support call and, ultimately, taking care of this problem requires the retailer to order a replacement part.
There are several things the retailer must consider now. First, the cash flow of purchasing the second item (for those not on terms with a vendor). Second, the time it takes to deliver the new product. Third, inconveniencing the client due to the extra time required to make things right and schedule installation of the replacement part. Fourth, the cost of sending back the defective part to the manufacturer and what happens to that before it becomes credited or returned (repaired or replaced), ready to sell.
Although the manufacturer or supplier can’t always control the impacts of the first, second or third items directly, many could actually create policies or programs that help with that fourth issue — the costs of shipping returned items that, in principle, are not the retailer’s fault.
In discussions with several small 12-volt retailers who have tried to streamline their inventory to smaller levels and turn it more frequently, not to mention that it’s impossible for them to hold every single application specific part in inventory anyway, many feel that the manufacturer should bear some responsibility for the cost of returning items that are defective out of the box.
Surely with the volume of a manufacturer’s product shipments, it would be much less costly for them to send a call tag for an item to be returned and then, if upon testing and inspection the product is found to be defective, the manufacturer would absorb that cost. If the manufacturer finds the retailer is at fault, then at least if the retailer were charged it would be at a much lower rate than the manufacturer pays for shipping costs versus the “retail” rates that retailers usually pay through UPS, FedEx, etc.
Considering that margins on many products are thinner than they have been, but also adding any costs to reschedule or accommodate clients because of unforeseen product failure that extends the amount of time required for product installation (or necessitates a subsequent visit), the retailer bears a cost anyway. Such a return shipping amnesty program could create more loyalty among retailers who are looking for more of a partnership with a supplier, and it would certainly give customers greater confidence that the retailers they buy from can take care of any problems that arise.
Of course there are opportunities for manufacturers in such a program. They could either leverage the returns data to track some unknown manufacturing issues contributing to failures or, if the problem was due to an installation error, they’d quickly have a short list of training topics to get out there and spread to their retailer dealer base. If there are no faults found on a returned product, the retailer would pay anyway — but they could have a vendor profile that their sales or support rep can leverage to provide input on where the retailers can improve to avoid those issues in the future. Either way, whether it’s the ultimate fault of the product (manufacturing defect or damage in transit) or from the retailer (due to installation errors), there’s an opportunity here to deal with it in a way that limits the burden on retailers when it’s not their fault and to use it as a focused customer support opportunity when faulty product installations are the fault of retailers.
What do you retailers think? Would you like to see your key vendors help you mitigate the damage control of the “surprise” product failure when it requires otherwise costly return shipping on your end? How are you handling it now? Please comment here on our blog and let us know!
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