Small Goods, Large Returns

…dealers, suppliers explore effective accessory marketing

“There’s been a paradigm shift over the last 10 years in regard to accessories,” says Ted Eschliman of Dietze Music, the four-store Nebraska dealership. “There was a time when you would sell a big-ticket item and then throw a bunch of things in — strings, straps, and so on. That was easier to do when we were making 40 points on an instrument. Now that we’re making 28 points or less, we don’t give accessories away.”

Dietze Music has retrained to do just that in recent years because the stakes are so high, or as Eschliman puts it, “I have to tell employees that if we don’t make points on this small stuff, it might lead to staff cuts and they’ll find themselves working alone on a Thursday night.”

With their attractive margins and turns, many dealers view accessories as a firewall that can stand between surviving and running off track. While too often items that sell for $8 take a back seat to those that sell for $800, it doesn’t negate their pivotal role in securing a store’s overall long-term financial health.

In other words, it’s time to sweat the small stuff.

State of the Small Stuff
The conventional wisdom is that if you can’t count on much else when the economy is going south, you can rely on accessories. Of course that’s not a one-size-fits-all characterization.

“Here’s the deal: when the economy goes down, we do really well,” says Rob Turner, founder and owner of EMG, Inc., the California-based pickup manufacturer. “That’s because people are limiting the amount of money they are spending on instruments, and accessories are a great way to experiment and have fun. A pickup, for example, is a great choice for that sort of thing.”

That said, Turner says EMG specifically does well year ’round. Interestingly, Turner notes tax refund season can be particularly strong. “Instead of spending $800 or whatever on another guitar, a musician can spend less than $100 and literally have a new guitar. A new pickup can do that.”

David Via, D’Addario’s vice president of sales, reports that they are seeing a bump in accessories, and “accessories tend to be a little more recession-proof in general, so we’re seeing modest increases.”

“We see a lot of potential for accessories this year, especially coming out of the successful NAMM Show in January,” says Jim Cavanaugh, president of the Cavanaugh Company (which includes Super-Sensitive strings, Black Diamond strings, and Bari Woodwind supplies.) “It was the best show we’ve had in at least five years, mostly because we’re delivering a better product.” They are also working to get more information about their product to the end consumer through mailers. “We’re also getting out more to see dealers,” he adds.

“There are two reasons we’re experiencing a bump in sales,” says Michael Skinner of Dansr, Inc., distributor of Vandoren and Denis Wick products. “We had a huge last year, partly because of growth in the market and partly because customers are upgrading their mouthpieces. Secondly, in general, accessories tend to roll higher in times like these.”

For Zildjian product manager Ron Allman, the accessories business has been more about consistent growth then cyclicality: “Many of our accessories are essential to drummers, such as cymbal cleaning polish, cymbal and drumstick bags, and cymbal felts.”

Hot Rod That Guitar
David Via says it’s helpful when the dealer recognizes that accessories enhance the sound of their customer’s instrument, and are much more than just an afterthought. For example, it should be instilled in customers that strings and drumheads are not items that just need replacing when they break. “It’s like oil in a car,” Via says. “You don’t wait until oil is completely drained before getting an oil change. You change the oil as part of a regular maintenance plan. Same with accessories such as strings, drumheads, and reeds. When degradation of performance starts setting in, it’s time for a tune-up and a change-out.”

“While guitar sales are strong for us too, right now, we are finding that people are wanting more and more to accessorize their guitars,” says Melanie Beers, Sam Ash’s product manager and a 20-year veteran with the dealership. “Sammy [Ash] and I worked together to increase the selection because we were seeing people were changing up their guitar, adding new knobs, etc. There are people who want to customize their guitar, make changes to it …; so if you need a guitar part, come to Sam Ash!” she laughs.

Mike Fazio, of Fazio’s Frets and Friends in suburban St. Louis just moved a few miles down the road from his original location into bigger digs, which enabled him to expand considerably. One thing that hasn’t changed is an unusually large selection of accessories placed out in the front center of the store. In addition to a generous selection of strings, and cables, Fazio also features a lot of guitar parts.

“We do extensive repairs, so we like to display a depth in repair parts,” Fazio says. “Having whole displays of parts on the sales floor keep people coming in.” Especially in slower economic times, he finds having all those knobs, tuning keys, and pickguards readily visible gives players ideas of dressing up or even just changing out their current guitar or bass and giving it a different look.

Fresh from the NAMM Show, Beers of Sam Ash adds they brought in some new pickups from the show and are seeing an increase in that area as well. That is not always as easy a sell – but there are ways to make it easier.

“The best way to display a pickup is to have a guitar line that already has it installed,” advises EMG’s Turner. “We do a lot of OEM products, and that’s the best you can ask for. Otherwise, we also do a lot of Strat-style replacement systems. We have prewired systems on a pickguard, and it takes little energy or time to install one of our systems. It’s a simple way to not only demonstrate the product, but typically sells the guitar, too.

“Our recommendation is to install of couple of pickups in a guitar and hang them on the wall, because in the end you’ll most likely sell the guitar – or at least give people a chance to really hear the difference a new pickup can make.” He adds speakers are also similar – if there’s not a way to let the customer hear it, it’s a much harder sell.

Everyone would agree that the industry’s proliferation of accessory products is daunting, but to paraphrase Mae West, apparently “too many drumsticks is wonderful.”

Dietze Music’s Eschliman backs that up: “I’m stunned by the amount of drumsticks I have to replenish,” he says. “The big thing for us is Zildjian sticks. I’ll order 12 boxes and think I’m done for a while, and the next month I’m having to replenish them already.” Having a variety of marching sticks is increasingly becoming necessary as well, he adds. “It’s almost like a fashion thing. It’s amazing how consumer-able sticks are. I think our total stick collection is three times what it was ten years ago. Same with strings. But it’s no problem because we still sell them.”

And then there are pedals …;

“It’s funny because I thought the market was fairly saturated 10 years ago,” says Kevin Bolembach of Godlyke. “But we’ve seen nothing but new entries every year.

“It’s kind of weird with Godlyke because we straddle the fence between hand-built, boutique-type products and mass market products – we’re quality, but we’re higher turn than a hand-built manufacturer.” But he adds that despite how many pedal choices are out there, there are plenty of “pedal heads” who can’t try enough distortion and compression boxes.

Since NAMM, Dietze is stocking some new pedals, like Electro-Harmonix pedals. Part of the decision to take those on was to have something new and fresh in their store – another important key to doing well with accessories: make sure customers have something new to check out when they stop by.

All in the Merchandising
Godlyke’s Bolembach has a catchy (if PG-13) phrase that cuts to the chase on small goods merchandising: “Behind the glass, pain in the ass. On the floor, sell more.”

Cavanaugh is also of the opinion that accessories behind the counter and under glass aren’t the way to go. And aware of how counter space is at a premium, they are offering POP displays that are easy to deal with and take up little room – their rosin display features great visibility for the consumer and is easy for the dealer to keep stocked.

Fazio, too, is not a fan of keeping accessories under or behind the counter in his St. Louis operation. “If you went to a candy shop and you had to ask someone about everything, you probably wouldn’t bother,” he reasons. Not that Fazio’s is a self-service operation — the sales staff is always around to strike up a conversation. It’s just a sale will more likely be had if a conversation starts with “tell me more about this” after a customer has put his or her hands on the product as opposed to “can I see that thing behind you, third peg to the left?”

But Fazio’s store has the luxury of space and takes advantage of it. Others don’t.

“Many dealers face the challenge of finding the space to put all the accessory products that are offered them,” Zildjian’s Allman says. “Given limited space, dealers want the strongest-selling brands. In addition, Zildjian’s Artist Series cymbal and drumstick bags feature products developed with some of the biggest names in drumming such as Travis Barker, Adrian Young, and Tommy Lee. These products have the added consumer pull associated with these artists.” He adds that they typically provide merchandizing suggestions to specific dealers to “help them create the optimal accessory mix for their store.”

Specifically about displaying drumsticks, Allman says that their stick displays allow customers to easily identify the Zildjian brand in the store and then clearly look at the product offerings.

Kenya Austin, Yamaha product manager for accessories, points to a perhaps unlikely source for inspiration: Internet retailers.

“You can’t leave an online retail page without being asked to add an accessory,” she points out. “I started buying a camcorder online, and I got asked to buy an extra battery –twice! Internet dealers have perfected this art of the add-on, and brick-and-mortar dealers can do just as well with the same concept.”

The key, says Austin, is getting the accessories “right in their face,” and training sales staff to talk up all the available options all the time. “And that’s where manufacturers can get involved with effective POPs.” Austin also stresses putting accessories by the instrument they are accessorizing. For example, Yamaha offers a POP for keyboard covers that dealers like because it’s also the box the covers ship in. Six covers can be placed right by the keyboards and it’s completely self-service. When it’s empty, the retailer just replaces the box. Also, Yamaha has a new POP for its Air Cell Straps that fits in slat walls and can be merchandised alongside the guitars themselves.

“For Yamaha, it’s coming up with display-ready packaging,” she continues. One such merchandising aid is the new Keyboard Integrated Selling System (KISS). Created to be set up near the portable keyboards, it incorporates headphones, pedals, dustcovers, and more.

“Our accessories are based on what will turn around and complement the products,” she adds. Yamaha is aware that dealers have a lot of choices, including creating their own house brands, so “in order to be a full-line supplier, we have to offer them more than just our brand. We offer merchandising, logistics, fulfillment — it’s very competitive and we stay on top of it all because we can be replaced very quickly.” She adds that many of Yamaha’s district managers come from retail and understand the challenges many dealers have working with limited wall, shelf, and floor space.

Bolembach of Godlyke points out other solutions exist for dealers, like fixtures from String Swing and other similar companies. “They have affordable displays for pedals that make it easy for the guitarist to plug in and play,” he notes.

Trends
“With Vandoren, we are blessed with some tremendous technology,” says Dansr’s Michael Skinner. “The company has come up with new packaging that provides reeds so fresh it’s as if they just came from the south of France where they are made.” Sensitive to the trend of “going green,” he adds that while the box these individually wrapped reeds come in are physically bigger then the old boxes, it’s all made from recycled products. “The cellophane can be burnt with virtually no emissions, and the plastic sleeves can be recycled. It’s all more environmentally friendly than our other packaging.” The end result is a smaller “carbon footprint.”

Trends at D’Addario include a surge in their EXP coated strings, and their entry-level violin strings continue to gain market share. “Our Planet Waves cable products continue to see an increase in sales, too – people are understanding that what you put into the cable should be exactly what you hear when it comes out of it,” comments David Via. “Customers want to leave effect elements for the amps and pedals!” Also, like many others making drumheads, D’Addario is pushing for drummers to replace the bottom head. And speaking of drums, their HQ products have seen resurgence of late, with more drummers picking up hi-hat and snare mutes than ever.

“Heavy metal is the trend and has been for the last seven or eight years,” EMG’s Rob Turner says. “We promote a lot of heavy metal artists and people tend to buy what their favorite players are playing. I did when I was a kid!”

Fazio is proud of his selection of strings, which he says is the largest of any store in a multi-state area, adding that a trend is the musician wanting more choices, period. “We’re a gigantic Elixir dealer, and carry GHS, Fender, and D’Addario in depth, too,” he says. As an example, he notes the store carries the GHS Nashville High Strung Set, which is unusual and not every store carries them. He’s glad he does because one customer drives from Alton, Illinois to his store, about an hour’s drive, to get those strings. “I don’t even know how many music stores he passes to get those strings from us, but it’s a lot — and he comes out often, too.”

But trends in accessories can be subject to local tastes – very local, according to Ted Eschliman. “It’s interesting to me to have one thing be hot at one of our stores, and not moving at all at another that’s not even six miles away!” Otherwise, he says they work hard to stock the smart accessories for their smart customers. “That’s where we have the edge over the cyberworld, and even the big-box mass merchants. We don’t take a cookie-cutter approach.” An example, he says, is the Planet Waves Grip Master, which helps the guitarist give his or her fingers a workout. “You’re not going to find that at Best Buy.”

Exploiting the Higher End
Offering higher end accessories seem to be a trend, too:

“Our Rico Reserve reeds have been a real success,” says Via. “Rico is historically perceived to be more of an entry-level reed, but professionals are looking at the Reserve reeds. The entire clarinet section of New York Metropolitan Opera Orchestra is currently playing our Rico Reserve Bb reeds.”

“High-end straps are picking up a bit, and to me it’s a fashion statement,” Beers says. “At Sam Ash, we’re just starting to offer Franklin Straps, and what a beautiful job they do.” While there is definitely an increase in those willing to spend more on exclusive, higher-end straps, the guy or gal who is playing the bars on the weekend are mostly sticking with the good quality, moderately priced straps, she adds.

Front and center at Fazio’s, the first thing you see when you walk in the store is a huge selection of straps. “I like to keep a great array of beautiful leather straps,” Fazio says. “These players who are buying $1,500 to $5,000 guitars need a special strap to go with it.”

Dansr is offering an “elite program” with Vandoren that Skinner attributes to 18% growth in those products in the last six months. First tried at Paige’s Music in Indianapolis, it reaches out to those better and more serious players and opens them up to higher-end reed accessories. “It allows the dealer to create a preeminent Vandoren presence,” Skinner states.

If a guitarist is looking at a basic pedal, Bolembach at Godlyke suggests showing them a higher-end one before they make their purchase — though there’s no guarantee that will always capture the larger sale. “It’s not too difficult to convince someone that one pedal sounds better than another, but if he or she has ‘x’ amount of money and they need an overdrive unit, they will likely make a decision based on price.”

Maximizing Profits
Cavanaugh says that talking with the dealer about Super-Sensitive’s products and getting to know them and their needs personally, is one way his company is working to increase sales and profits of accessories. In addition, they are expanding their product lines. With the Black Diamond strings, they are offering a jazz flat wound series for both electric and bass guitars. Specific products are being created and marketed for the Flamenco and bluegrass markets, too.

“We’ve redesigned the Super-Sensitive red label, and the string composition,” he says. “Some just think of the vibrating length of the string, but we’re researching eyelets and looking for new materials for that. We actually formulated eyelets to create more warmth and clarity.”

D’Addario’s example of reaching out to the dealers is with a Rico Reserve deal. For 475 participating dealers, they are offering an opportunity that allows customers to try the reeds with no risk. If they like it, they will be sent another one; if the customer doesn’t like it, they will refund their money. “We have 100 dealers participating in the program now,” David Via reports, “and we’re confident we’ll get the maximum participating.”

Otherwise, D’Addario is “always trying to find compelling strategic promotions that will increase business for dealers, as opposed to just giving a discount, which is a short-term hit,” says Via.

Additionally, the company has re-implemented MAP pricing for accessories. “It’s something we previously had on cables and tuners. Last year we expanded MAP to reeds and strings, then we suspended the program last spring due to the ongoing FTC investigation. However, last fall the Supreme Court ruled in favor of manufacturer’s rights to preserve their equity position within the market as reflected in the market’s advertising of the manufacturer’s products. Therefore in 2008, we reactivated the program, and have expanded it across key models within nearly all our brands – D’Addario Fretted, D’Addario Bowed, Planet Waves, Rico, and Evans. MAP is not applicable for PureSound and HQ. To my knowledge we’re the only company that is applying MAP to accessories, and we welcome other companies to consider similar practices. Accessories are not all alike. Just like the old advertisement, ‘Ask for original General Motors parts’, we want customers to understand the quality and value that D’Addario & Company’s products represent,” Via concluded.

Dansr is also coming up with new merchandising tools. Skinner says they took the initiative to create a wire-based rack for their mouthpieces. “It has a nice product pusher that’s a glide, not a spring,” he says. “It’s designed to take up as little space on the wall as possible. That’s a big plus.”

Advice
“Advertise that you have the accessories,” says Michael Skinner. “Too few dealers today think of identifying themselves as a go-to place for accessories. Doing that, and then talking about it, making a big deal about it, particularly during this time period, I believe is wise. Yes, accessories are a long-term investment, but they pay off.”

One thing Cavanaugh encourages dealers to do is to bundle – say, take a set of new guitar strings and couple it with polish and picks.

“The best advice is to ask our sales force for help,” says Allman, specifically saying Zildjian’s are extensively trained and knowledgeable. “They have the best feel for what is working, what is hot, and what the holes are in the dealer’s assortment.”

“Retail stores should definitively pay more attention to the accessory counter, especially when the economy is slowing,” Rob Turner says. “I always recommend training personnel on all the accessories, too. It takes a guy behind the counter who has some knowledge of the product. EMG always does well when there’s a guy behind the counter who says, ‘Oh yeah, I use this – this is the greatest.’ Unless a customer already has his or her mind made up before they walk in the store, people always buy on recommendations like that.

“What you don’t want to do, though, is only recommend what you have in stock. That’s dangerous for customer relations. Help the customer get what he needs or what he’s asking for, not what you want to sell him or her.”

“Margins are good with accessories – that’s a given,” Ted Eschliman says. “But where you really win is serving the customers. It’s not just having the accessory, it’s knowing what it does for a player’s playing and how it can improve it.

“Accessories are not a luxury any more – this is where we make our margin,” he adds emphatically. “People aren’t going to get a capo online. It’s like people at a football game – they aren’t going to shop hotdogs online! It’s there, it’s warm, they are in the mood – and that’s what accessories are to the music retailer.”