What Car Audio Retailers Are Up Against

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Brick and mortar retail is ‘Turning to Rubble,’ said a New York Times headline last week.

In the past two weeks Macy’s said it will eliminate 10,000 positions and The Limited said it will shut down all 250 of its stores, eliminating 4,000 jobs. Sears will close 108 Kmart and 42 Sears stores over the next few months.  All this while Amazon announced it will add 100,000 jobs in the next 18 months.

The typical online retailer generates over $1.2 million in sales per employee!  While the typical brick and mortar store generates $279,000 in sales per employee.

In the year 2000, retail electronics stores employed close to 550,000 people,  As of the end of 2016, they employed about 450,000.

If there were no online retailers, there would be 1.2 million more retail jobs in the U.S, said the chief US economist at J.P. Morgan, Michael Feroli, according to the NY Times.

Currently there are 16 million retail workers in the US., but traditional retailers have let go more than 200,000 jobs in the past four years, reported the Times.

See story “Amazon Will Add 100,000 Jobs as Bricks-and-Mortar Retail Turns to Rubble.”

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20 Comments

  1. just waiting for the manufacturers to realize how much money they can save just sending ten
    trailer loads of car audio to amazon. distributors are in the same boat.

    g

  2. JH,

    From a technical support point of view… The manufacturers are closed for the Internet when they are closed for you. If the Internet has the answers for your consumers when the manufacturers are closed you should also have the answers. The Internet guys have already asked the questions and stored the information in effort to benefit their (your) customers. If they can do it, you can too. At worst if the consumer can get technical support information from an Internet site, you can go there while asking your consumer to have a cup of coffee, go in the office and find the answer on the Internet.

    In an earlier post, someone suggested we do less complaining about the Internet and embrace (use) it a little more.

    1. Don’t worry, we fully embrace the internet and educate people on a daily basis about the pros and cons of what is offered on the internet but that is also part of my point. Manufacturers are not doing their part in this area. Some put small statements on their websites about their product not coming with warranty when purchased online or at least not through an authorized internet dealer but that isn’t good enough especially if they aren’t all doing it. Their needs to be a bigger statement from the manufacturers about the value of purchasing directly at the local level. Manufacturers would benefit a lot from putting someone in the retail environment for extended periods of time on a regular basis and that is not just a reflection on them. Think about it. If brand XYZ puts someone like yourself in a retail environment for say a week at four different dealers in four different areas of the country how much would both parties benefit from that? The manufacturer gets a first hand sample of what dealers are up against on a daily basis and the dealers get in person assistance in dealing with the daily challenges they face. Maybe it’s not a week but it has to be more than a few hours. Maybe 3 days at 8 dealers. Whatever the ratio, it seems to me this would be a real eye opener and value to both parties as it is clear to me that some manufacturers are clearly more out of touch with what we as retailers deal with on a day to day basis.

  3. Something else that dawned on me as I’m here in my store working on Martin Luther King’s birthday is that many manufacturers, suppliers and distributors are closed on holidays or do not accommodate the multiple time zones very well. We’ve ran into a problem with tech support lines being on east coast times and the only time we need tech support is at 4:30 on a Friday. (Little sarcasm there but you know there is some truth to it.) Or what about manufacturers being closed for some holidays? The internet is open 24/7 and if we need answers or to simply check availability of product on one of these holidays then we can’t help the client standing in front of us therefore increasing the chance that they may turn to the internet for answers which puts them in front of online retailers. Basically, I feel manufacturers could do a better job on multiple levels at helping retailers compete with internet because it isn’t just about price protection.

  4. After reading several replies it’s clear to me that those who are having success are providing a service, both in store, but most import, installation. We too are having a banner year and are lucky to have a good group of techs installing into these high tech cars.
    My question to you is this; do you provide installation of products not purchased from you? Can a customer of yours purchase online and have you install it? I struggle with this because we always have. Nobody likes to say no, and we all talk about turning that customer into ours. But at the end of the day when we talk about what makes us different, namely our techs, and provide install services to everyone, we are allowing that consumer to have his cake and eat it too. Sure we charge a little more for customers own equipment installs, but that will never make up for what lost in those sales.

    Has anyone had success saying no??

    1. When business is slower we will install product clients provide but if we are booked out we will not. Also, we don’t up charge for their gear instead we offer an incentive on labor if they purchase product from us. Our hourly rate is 90 an hour but if you purchase from us we change it to 75 an hour. Seems to work better than charging extra.

      I think if everyone got on board and said “no” to customer provided product then it may be a more successful idea, however, what I believe will come from that will simply be install only facilities which I’ve already seen a couple in our area.

      1. JH,

        Smart tactics! We recommend similar plan to all our elite retailer clients, as who doesn’t like to get a ‘discount.’ By contrast, “charging extra” is a clear negative that customers will seldom ‘warm to.’
        As added ‘disincentive,’ you can also tell them you will need to charge an extra hour, to bench-test anything they bought elsewhere — cause we can’t afford to install it, and THEN discover that it does not work…
        Together, these tactics will serve as a “force-multiplier” and will help customers to realize the greater benefits of ‘buying local,’ plus enhances your “value-added” for services provided. THE most important brand in your shop IS your expertise and that’s what you must ‘sell’ first and foremost.

  5. @David you said you ran as fast as you could, where did you run too? I assume you meant you got out of the industry? If so, what industry are you in now?

  6. Zach,
    The MOTHER called you to see if you’ll be hiring her SON because he is having a hard time finding a job… Does anybody else see a problem with that scenario. We gotta have our own CHOPS and stop relying on MOMMY. And MOMMY has to raise her SON to be capable and self confident.

    More good news is available in a few of the posts. Glad to hear it. As a retailer be a professional service provider. Vendors encouraging retailers to make and execute business decisions regarding the “selling” of brands that make good “Profit, Identity and Predictability” sense as opposed to clerking what the low price guys have taught consumers to buy.

  7. Its axiomatic that “Value Dives Retail Sales.”
    The combination of large selection, easy of purchase and swift delivery, plus typically lower prices (by virtue of lower overhead model), makes the online option seductive.
    These factors all contribute to the enhanced ‘value’ customers perceive, and the results are now clearly manifest.
    However the 12V Specialist does have several advantages, including ‘audible demo’ capability (powerful “Wow” customer experience), and the critical installation factor, plus the ‘get it now’ element, ARE substantial assets, if they are properly implemented and applied.
    Upscale 12V retailers can augment these key advantages by deliberately choising to not just ‘clerk’ brands that are all-over Amazon et all.
    Actively ‘selling’ brands that deliver clearly superior perfomance AND enhanced value, which are NOT found or discounted on the Internet, IS now absolutely crucial, IF 12V Retailers desire to improve their GP, and also ignite their cadre of happy clients ‘actively selling’ for them, which is an extremely powerful tool…
    Sell better gear and opt to not simply rely on, or only selectively support brands that have clearly demonstrated they are really only interested in ‘moving more boxes’…
    The benefits for this ‘evolved,’ value-driven merchandizing strategy deliver proven rewards.

  8. It’s a shame to see Americans destroying their own economy by buying online, sending their money to overseas companies. Last week a mother called me to see if we are hiring for her son because he is having hard time finding a job. So, during the conversation I asked her how she shop? she replied proudly ” Online, that’s how I get the best deals”, so I replied ” and that’s why we don’t have jobs opening” . Yesterday, my wife and I went to the Mall, I was shocked to see how many stores are closing and how empty the mall was. Let’s wake up people, support your local businesses even if you have to pay extra otherwise one day we will face the horrible reality of boarded and empty buildings.
    God Bless America.
    ” Don’t ask what your country do for you, ask what you do for your country”

  9. We must stop thinking of ourselves as retailers and start considering ourselves expert service providers. Nearly all of the doom and gloom in the “retail industry” is related to grab-and-go product categories such as clothing, household goods, music & movies, and small appliances. We in car audio are all fortunate to sell a product category that must be installed. We’re not much different than plumbers, remodelers, mechanics, etc. We make ourselves relevant by having the expertise and specialty parts to install the products that we sell. Here, our install attachment rate is nearly 4x what it was 15 years ago and our labor rate is 100% higher. Sure, we’ve lost some “do it yourself” customers to the internet. But vehicles are increasingly complex, which is what gives us – the expert service providers – job security.

  10. Well said Todd,
    We are also very busy, best January start in a while. As long as there is not an “install now” button on Amazon we will flourish.
    Business models for retailers may change as it always has over the past 43 years I have been in business, but good business models will prevail while gaining market share from other brick and mortar retailers as online continues to grow.
    Floyd Seal
    Empress Audio

  11. Well… The good news is Car Audio Retailers are not singled out in their challenges. All brick & mortar retailers are similarly challenged. The other good news is that this condition is no surprise. Brick & mortar retailers have been facing these challenges for many years. That means we have all had time to analyze the challenge. Prepare a plan to meet the challenge. Execute the plan.

    I contend the plan should include considerable focus on the “consumer experience”. ALL RETAILERS must do likewise. For instance AMAZON is not the cheapest, BUT they do deliver the best experience for their very loyal customers. Crutchfield has never been the cheapest BUT they have always worked hard to deliver a terrific catalog experience and later on-line experience for their very loyal consumer.

    Brick & mortar retailers can no longer pretend that just “having the inventory now” is a significant enough advantage to overcome an otherwise “adequate” consumer experience. Merchandising, enthusiasm, knowledge, communication (sales) skills, superior installation skills, deliberate & consistent outreach through social media, simply asking consumers to refer their friends are some of the things we can do with little cost but significant “thought and execution” effort. No rocket science here. Just observe the challenges, properly identify them, plan to surmount them and execute.

  12. Eliminate state sales tax, and charge an internet flat tax to level the playing field, or we will all be beholden to Amazon. All hail Jeff Bezos, the retail killer.

    1. Been saying this for years. States are loosing millions to internet sales as consumers are often buying online to simply avoid paying sales tax.

  13. Yup, retail as we knew it…..time for the “Specialist” to be special or irrelevant. It’s not doom and gloom, just time to step up your game, deliver performance at a fair price and don’t discount your labor!!! If you discount what makes you a specialist, are you?

  14. We have never been busier as we come off of the best year we have ever had!!! Everyone needs to stop concerning themselves with the internet and embrace it as a fantastic marketing tool. And no, we don’t sell on the internet. We are selling a service more than a product. You can’t buy great service online. I could use some of the 100,000 people out there that are no longer employed in the retail electronics industry.

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