The biggest problem facing the AV industry and its customers today?

Stuart Wright

AVForums Founder
Staff member
The biggest problem facing the AV industry and its customers today?

A potential customer walks into a high street AV retailer and takes a demo of some equipment they are interest in purchasing. The customer takes their time and maybe a cup of coffee and makes the decision to buy. Then they whip out a piece of paper with details of the same equipment for sale cheaper at www. whatever .com and tries to get the dealer to match the price. Or worse they just walk out of the shop and buy online.

Having spoken to lots of people in the AV industry, I have come to the conclusion that the big problem (perhaps the biggest) for the UK AV industry is the effect of internet sales.
Why? Because
  • internet sales have risen dramatically and will continue to do so (see note 1 below).
  • the cost of selling on the ‘net is considerably lower than from a high street shop and therefore online prices are lower (see note 2 below)
  • high street retailers are losing business to online stores
  • manufacturers’ pricing structures have not reflected the costs of making a sale. I.e. the cost of the kit to retailers is the same whether it is to be sold mail order or in a shop
  • Some retailers are fighting back by refusing to stock certain manufacturers’ products unless the pricing structure is altered to create ‘a more even playing field’ (see note 3 below)
This chain of events has caused a bit of a ruckus in the industry. As consumers, we should try to appreciate what happens behind the scenes because it affects us. If all the high street retailers were to go bust because they lost all business to online retailers, we would have nowhere to audition our AV kit (see note 4 below). And the very best advice is to audition equipment before you buy it (see note 5 below). High street retailers can offer us a valuable service we simply can’t get from online stores (see note 6 below).

Many manufacturers are reacting to the situation by either
  • preventing their products from being sold mail order using various methods to discourage the retailers (see note 7 below)
  • restructuring their costs to retailers. Products are either more expensive if they are destined to be sold online, or they are cheaper if they are destined to be sold in a shop. Or a bit of both (see note 8 below)

In short, then, the perception that most of the UK AV manufacturers, distributors and retailers have is that the internet is bad for their business.

The solution?
UK AV manufacturers, distributors and retailers need to understand what the internet actually is. They need to appreciate that it is used by people – their customers – to find information in the same way as people buy AV magazines to find information.
They should use the internet to send their message to their customers.
A message something like ‘buy from our high street retailers/our shop because we can offer you a different/better service than you can possibly get mail order’.
Imagine a magazine advert which you only had to touch with your finger to get more information about the company/products. That’s what you get with internet advertising.

But the internet is relatively new and the concept of advertising on it is completely alien to some companies. I guess part of the problem is that the marketing people don’t know where they can advertise. In the UK there are only two significant online resources for home cinema – the Home Cinema Choice group of sites and the AV Forums.

Many AV manufacturers, distributors and retailers’ adverts are conspicuous by their absence on the AV Forums. Where are the adverts for Sony, Pioneer, Panasonic, Philips, Toshiba, Sharp, B&W, CEDIA, Sevenoaks, Audio Excellece, Audio-T, Practical Hi-Fi? Are these companies not interested in reaching the same target audience they get with What HiFi, Home Cinema Choice etc.?
What Hi-Fi’s ABC (number of issues sold) is 70-80 thousand per month; we have an ABC of over 150,000 every week!
It’s somewhat surprising that the AV Forums – the busiest home cinema community in Europe - is not getting support from these important companies.

In summary
My message to people buying AV kit is not to forget the added value you are getting from a high street retailer which justifies their prices. And don’t go for an audition in a shop just to then buy online. It is morally corrupt and ultimately bad for you as a consumer.

My message to AV manufacturers, distributors and retailers is to embrace the internet – ideally the AV Forums – and use it to get your message to your potential customers.

Note 1
Roughly half the UK population shopped online this Christmas, spending more than £3bn. Research shows that UK customers are among the most enthusiastic online shoppers. The European Interactive Advertising Association found that 30% of British consumers bought more than 16 items online in 2004, compared with 19% of shoppers across Europe.
Note 2
High street retailers have to pay for rent (expensive in prime locations), staff (highly trained staff are not cheap and 'highly trained' is what we consumers demand), demo rooms and demo stock. It is significantly more expensive to run a high street shop than a mail order business
Note 3
Paul Lee-Kemp of Sevenoaks has written an open letter to manufacturers highlighting the problem. He has ‘declared war’ saying that unless the pricing structure is made fairer, Sevenoaks will not stock their products.
Note 4
Is the boom in online sales and stiff competition on price good for us as consumers? On the face of it, maybe, yes. The price of equipment in ‘rip-off Britain’ is heading in the right direction, right?.
But I ask you to think longer term. If we do not buy from high street retailers then surely they will go out of business. Or at the very least the quality of their demo rooms / trained staff / variety of equipment will drop. Then our choice as consumers is diminished.
Note 5
What is the best way to buy kit? Personally I think we should read reviews by the magazines (online and print), compile a shortlist of the products which most suit our needs and budget, ask for advice from readers of the AV Forums and finally audition the kit yourself. The auditioning part is the most important because only you are going to know whether you like it or not!
Note 6
Besides offering us demonstrations, high street retailers can also install kit for us, calibrate it (no display is correctly calibrated out of the box), and offer an after-sales support service which can’t be matched by online retailers.
Note 7
Actually Linn have had a policy in place for over 10 years which states that a Linn dealer must be prepared to provide on-site support for its products. You don’t find Linn products being sold online.
Other manufacturers like Denon, Yamaha and Velodyne are insisting that their top-tier products are not sold mail order and some must be installed by the dealer.
Note 8
How the manufacturers are going to keep tabs on which stock has been sold face-to-face and which has been posted mail order is an interesting problem. Maybe it will be a cross-checking of serial numbers at warranty registration time?
 
A

Azrikam

Guest
Feel free to delete if this post wasn't meant for discussion. :)

Personally, I think this is definitely a problem facing the AV industry, but I don't think it's such a problem for the consumers.

Maybe the store-front option dying out is a good thing. I do nearly all my shopping online, and I do so quite willingly. Even if prices were the same, I'd still do so, mostly because of the convenience. During my life as an AV consumer, I have gotten more grief via high-pressure sales tactics from store-front shopping than I've gotten useful consumer information... and that's by a very wide margin. That's not even counting the misinformation. The consumer has more access to product information nowadays (via the Internet) than every before, and I wouldn't hesitate to buy an expensive sound system sight-unseen (or rather sound-unheard) if I'd read enough positive consumer reviews.

Obviously, this isn't for everyone, and a lot of people will be willing to pay a premium for store-front service. I do agree that high street retailers offer service that you can't get from an online store. But just how important these services are to the consumer will play a huge part in the future of traditional brick-and-mortar stores.

I disagree, however, with asking people not to audition an item in a shop and then buy elsewhere. The consumer has a right to not buy whatever they want. If a shop can't convince a consumer to buy from them, either by competitive pricing, quality service, knowledgable staff, customer loyalty, or any other means, then they don't deserve the sale. That's free enterprise in action, plain and simple.
 
F

FoxyMulder

Guest
You have to take into account that some people just don't live near any shops which demo products and some people buy without demo's ( i don't bother with demo's ) high street retailers service can be pretty bad too and some of their salesmen don't have a clue ( think shops beginning with c ) online retailing gives us great deals and stops us being ripped off by ridiculous high prices and to me that is a good thing as high street retailers mark up the prices too high.

Long term it can only be good for everyone if prices drop and if shops like sevenoaks suffer and have to close then so be it as i for one am fed up of rip off prices artifically kept high because its deemed that uk consumers will "pay more than other countries"

I am pretty disgusted that i bought a REL Q201E Subwoofer and then after finding out more information i could have bought a Velodyne or better yet an SVS subwoofer for the same price which would give a performance which outclasses the REL in every way, in other words i'm saying the REL subwoofer is overpriced for its performance and they get away with this overpricing of goods because the price is fixed and i actually bought that subwoofer from sevenoaks, its bad for consumers when prices are fixed and should be abolished so yes online trading is good.

It should be noted that i found out more information online about subwoofers than i would ever get from a high street retailer and the same is true of every product, the wealth of information available online means demo's are usually not needed and this is especially true when you belong to a forum like this.

The way i see it is that online retailers can give home demo's of the products perhaps by renting them out on a lease and if people like the product they buy it.
 

arn

Standard Member
Why don't the high street stores advertise there products on here and give a reduction to customers who come to there shop and buy (with an avforums coupon), I am not saying match the internet prices as you would expect to pay more for the high street service but some incentive would be nice.

Very Nice post by the way Stuart (good read)
 
A

Aryxx

Guest
I firmly believe that online sales give us a fairer price in 'rip off Britain'.

Besides, all internet sales are covered by an act of parliament ( I forget which one) that allows us to return products within seven days of purchase for any reason whatsoever. So you can still audition your kit and send it back if it's not for you. This is all done from the comfort of your own home too.

Now don't get me wrong, I still support the high-street retailers because they still have thier place and they excel in customer service and after-sales service.

Just my 2 pence.
 

GFS AV

Banned
I have been in a few high street stores, and have to say that the majority of the sales assistants have been either very patronising or like you to think they know much more than they do. I have entered AV stores before, and hate the fact that as soon as you walk over the line you're pounced on. I find the more high-end retailers tend to be very snotty and clever.

Given the above reasons, I, like many, prefer to click a button and get cheaper gear online, with the added bonus of not having to drive miles to go to your nearest dealer. I have bought equipment from Richer Sounds before. Not because I like the customer service (quite the opposite), but because it's cheap. I simply walk in, get what I want, then come out. The only added bonus is that if a product fails, you simply take it back rather than messing about with postage. In fact, I find the advice I receive via telephone with online retailers is far more accurate and helpful than any high street shop i've experienced.

I'm not saying all retailers are described as above. I feel sorry for the polite, genuine, helpful firms out there. In my opinion, it's the poorer companies that let down the AV industry. If walking into a high street shop was a much more comfortable, helpful, enjoyable experience, I think the problem would be solved.

I have much respect for online companies. 1. They can be very helpful indeed 2. Cheap 3. Sit back and wait for your goods.

The only drawback is not being able to demo the stuff. But for me, at an early stage find out what kind of sound you like, the simply get as much advice as you can from the forums, then start clicking!
 
F

Family Guy

Guest
And...on tyhe other side of the coin, some high street retailers will gladly "price match"...(Richer Sounds springs to mind) - while for others, "it's just not worth their while, because for every one person who comes in and asks for a price match, there's five mugs who won't"...(quote from a person who works in a "well known" high street retailer when I tried to price match some speakers...).
 
S

Spasm

Guest
Again feel free to delete the post if this is not a discussion:

I agree that the manufacturers have to protect the UK distribution channel. But I disagree that we should avoid shopping around on the internet to help out the high street stores. The internet is a source of information agreed, but it is also an avenue to peruse the market to get the most for your money, we pay enough in taxes etc so why not save a few quid form shopping around. Granted the apparent AV store "tourist" scenario isn't morally right, but everyone does it. I don't know of anyone that would walk into a shop and say well you are £250 quid more expensive than a quote I was given but I'm you've been a great help so I will get it from you (at the most do you think an hour of a sales persons time is worth £250?).

My av equipment has the same warranty, so this is another reason why I don't have a preference to where I shop.

There are always places to view AV equipment such as trade shows etc. and to be honest I have never partaken in venturing into a high street store to peruse the projectors I am interested in. Having said that why should I pay for marked up goods like cables, amps etc when I can source them online for a fraction of the price?

When shopping online I have received some great help from online retailers, they are knowledgeable and spend a great deal of time answering emails and spending lenghtly time on the phone helping me out, I'm not saying that High street stores don't but its not convenient for me to go and spend an hour or more depening on where I have to travel. I like the fact that the internet has made products and pricing more accesable, so why try to illiminate this.

Just to be clear, I have no illegence to either high street stores or online retailers. As long as I get the most for my hard earned money and get the service I deem acceptable from who ever I wish to shop with, then why should the choice be taken away to protect high street retailers?

I know there are pros and cons to both ways of shopping and I agree that the manufacturers should control the cowboys that spring up overnight and disappear a few months later, but why should the consumers choice be taken away because of some disgruntled high street stores dictating to the manufacturer!

I may have misinterpreted your views but this is my own personal opinion and do not wish to cause any offence to any one.
 

sc1977

Active Member
And don’t go for an audition in a shop just to then buy online. It is morally corrupt and ultimately bad for you as a consumer.

hmm dont know about the morality issue here but i WILL do this if it means i get the equipment i want at the lowest price

not one person can honestly say they relish the thought of throwing good money away on a duff purchase

and quality kit isnt exactly cheap! :eek:
 

GFS AV

Banned
Family Guy said:
And...on tyhe other side of the coin, some high street retailers will gladly "price match"...(Richer Sounds springs to mind) - while for others, "it's just not worth their while, because for every one person who comes in and asks for a price match, there's five mugs who won't"...(quote from a person who works in a "well known" high street retailer when I tried to price match some speakers...).
Any chance of sharing the retailer with us?
 

Malone

Active Member
Quite simply , sounds like the retailers need to get on their thinking caps and offer the purchaser an incentive, be that monetary, service or otherwise. All industries have to re-invent themselves otherwise they will go under.

Matt
 

BobBob21

Well-known Member
I certainly dont believe that the high street retailers have the moral high ground; similar to Family Guy's comments above I have had a well known high street store 'price match' an item and the person behind me buy the identical product but have to pay 25% more than I did. When I went back the next day as I had forgot to buy a cable the same sales staff were there and laughing abouth the mug behind me who had paid so much more than I.

At the end of the day the internet is still a new venture, a significant proportion of the online stores do also maintain a physical store too and therefore do not get the 'savings' of being internet only (though lets remember that running a sucessful online store is not automatically less costly) and manage to compete pricewise with the online only retailers both online and in store.

I believe there are too many retailers who decided the internet wasnt for them/ wouldnt work etc who are now regretting making that choice when start up companies are starting to make greater profits/ larger customer base over the last couple of years and so now are complaining about the amoral customer, the unfair suppliers, the poor standards of their competition as a way of avoiding having to admit to making a poor business decision.

The way people buy products is forever changing - take insurance, 20 years ago you walked down to your broker and filled in a form. Then Direct Line started and a new concept of buying over the telephone was created - you lost the 'experienced/professional' broker (sales advisor) helping you and the 'aftersales customer service' (sound familiar?) but you got a cheaper price. Now this is changing also and more and more are going online for even cheaper prices. The result? people get cheaper insurance, a lot of brokers went out of business, the 'clever' brokers had to ensure that they added value in another way - preferably one which cannot be emulated by the direct sales option - if they cant then they will go under or be bought out.

There are services which a high street store can offer much easier than a online retailer - like custom installs, setup/callibration - and there are people who will pay the required premium price for these. What I believe is a sad state of affairs is that manufactures are being asked to fix prices against online retailers (and more so that some are actually doing it) - why should online retailers be penalised for being innovative/ successful (normally you get savings for economies of scale) or the free choice of not going online taken by high street stores be financially supported by their suppliers? At the end of the day the customer will pay for these choices and will surely vote with their wallet.
 

AML

Well-known Member
I still feel that one of the reasons people in the UK are so eager to shop online is because they feel they are being ripped off by high street shops.

Same thing is happening in Japan. Shops here can charge nearly 50 percent more for a product we can buy online for nearly 50 percent less!

An example. My denon 3910 was purchased online for about 100.000 yen or 500 quid. The same player would have cost me 150.000 yen or even more at a shop in a place like "Akihabara" which is supposed to be one of the cheaper places to shop for electronics.

How can shops justify charging that much more for the same product?
Do they offer some kind of amazing service in their shop that you cant get online?
You may say "yes, they offer demos" but is a demo worth 50 percent of the price of what you are buying ?

Another point is:
Are the store clerk really all that knowledgable?
I always see them as sales people trying to sell me something and not really caring about what it is they are selling me. They just want their commision.

More and more companies try to sell us "the next big hit" and many people are tired of spending all their hard earned cash on something they may not even need. Blame advertising, the cost of having a staffed shop, or whatever u want, but I still think we are being charged through the nose for something trivial like a DVD player.

Maybe shops should disappear.
I know it would help to bring down the prices of the things I want to buy.
If I need a demo, im pretty sure my PC is capable of doing that. With faster internet connections coming out and PCs achieving same or even higher specs than the latest AV equipment, why shouldn't we be able to have an online demo?

As for the tea, well I can make that at home myself.
 

harrisuk

Well-known Member
The big problem is that we pay so much more for this kit in many cases than consumers in other countries do. So people try to redress the situation by shopping round for the best deal possible, in many cases that means online.

Its a difficult one as in many cases there are real benefits from buying stuff on the high street, advice, being able to demo the product and most importantly warranty / exchange of defective products. The question is is how much more is this worth ? If its a cheap dvd player I dont see the value added in there. If its a £2000 plasma screen or projector then absolutely.

I have to admit I tend to buy the majority of my stuff online these days. I dont think it will work the manufacturers trying to stop their kit being sold online. They will just up getting a bad reputation and people who want it sooner an cheaper will just go the Grey import route.

I`m not really sure what the solution is to this to be honest.
 

phillem

Standard Member
Correct me if i'm wrong, but i thought it was illegal for manufacturers to fix the price that retailers sell at.

Another thing re rip offs is this, some retailers have web exclusive prices. Retailers are not allowed to discriminate between cash and credit customers, so why are they allowed to discriminate between high street & web customers, afterall the retailer selling online is the same retailer on the high st.
 

forrestgump

Active Member
Stuart
Very interesting comments from a very influential member of the AV community. As the owner of the AV forums you will have seen first hand how basically the invention of DVD has fuelled a revolution in AV sales and the AV industry in general (not forgetting the hi-fi fraternity as well because there is a major cross fertilisation of the 2). What you are talking about has been going on in other walks of life for years. When I worked in the jewellers trade 15 years ago we used to write out quotations for customers who had their jewels stolen, usually via burglary. We charged them £15.00 for the quote to give to their insurers, when they got the payout and returned to buy all the stolen items (usually a few thousand quids worth) we credited the £15.00 against the items purchased. GUESS WHAT!!! 90% of them bought £15.00 worth of items just to get their money back, then off with the rest of the insurance money to buy a new carpet or a holiday! Moral of the story (and also a direct relation to your thread) people are morally in-comprehensible. As a side issue and a major AV thorn in the side, E-BAY has also done a lot of damage to retailers both on-line and on the high street, not just AV gear but a myriad of other areas such as antiques where your small retailer offers someone say £400.00 for an antique watch only for the customer to return 5 days later with an e-bay offer of something similar that sold for £500.00!!
 

harrisuk

Well-known Member
Paul Lee-Kemp of Sevenoaks has written an open letter to manufacturers highlighting the problem. He has ‘declared war’ saying that unless the pricing structure is made fairer, Sevenoaks will not stock their products.

This has given me a big laugh. I wouldnt shop there if he paid me if that is how he thinks. I imagine that letter will have ot some big laughs from some of the manufacturers.
 

Jules

Distinguished Member
If manufactures do insist on having their high end gear installed by a dealer, they would have lost my business straight away.
I always like to install things myself and don't want anyone pearing round my house thank you!

Obviously there is a premium to pay for using a dealer, but the problem is that too many dealers don't try hard enough and that premium is too great.
I simply object to being blackmailed into paying far more than I should under the wimperings of greedy dealers who now reap what they once sewed.

I don't want advice... I do my own research and make up my own mind.
I don't want help installing the gear either and I don't want to be paying for services I won't use.
However, I will gladly pay a little extra for decent aftersales service, and I'd guess this is true of most people here.

I think that's why places like RicherSounds are doing ok because they have the balance right. You can take something back without getting into a fight, but you don't have to pay for other services you don't need.

I think many dealers may just have to change the way they do business.
Aftersales, aftersales, aftersales.... that's the key to success.
 

richardr

Active Member
I don't quite understand why online sales are the biggest problem facing the AV industry and their customers.

Firstly, from a manufacturers point of view, they still get the sale. Why should they subsidise one type of retailer over another?

Secondly, from the customer's point of view it has added to competition and reduced costs. It has also reduced the near monopoly one or two big chains were beginning to get on the High Street for the mainstream market.

The only possible sufferers are certain retailers, and it is there that they have to learn to compete. Whilst they may not be able to ultimately compete on price, they have to be competitive elsewhere, especially with service.

Customers will accept (OK some will) higher prices if the service is good.

Whilst certain retailers act as cowboys selling inappropriate warranties, giving poor advice, and generally ripping people off, then it is no wonder many people choose to shop online.
 
D

dhansak79

Guest
My view is - Split the market

Put the cheaper end of products online and in stores. Leave the specialist retailer to deal with higher end products. This is largely the case already with companies like Linn, Meridian & Cyrus not supplying online retailers.

In my opinion it's good to demo kit but if the traditional shops can't compete with their online counterparts they should move into areas where they can.

I use the internet for large amounts of my shopping but would never spend £10k on a hifi from someone I'd never met and on something I'd never heard.

The problem nowadays is that most people don't care about service until things go wrong. If you wanna buy expensive kit online - be my guest. Just don't expect to get a quality service - or in some cases even a reply - when you are looking for after sales support.
 

harrisuk

Well-known Member
I think that's why places like RicherSounds are doing ok because they have the balance right. You can take something back without getting into a fight, but you don't have to pay for other services you don't need.

I agree with this, well actually most of what you said really.
 

greyhorse

Standard Member
Like everything in life people dont want to pay over the odds, some high street retailers eg Comet,Dixons,John Lewis dont train the staff. They will in fact sell you any old crap !!!!!

People on the high street want a fair price for a good product and I feel that if retailers like an audio/hi fi shop offer a price in between the manufacturers recommended retail price and the cheapest on the net, then back it up with a good service etc etc (People will buy from them)

For how long has the british public had to suffer price fixing from the major retailers, prices much higher than the USA and europe !!!!

At last the internet is stopping people from being ripped off !!!!


Just take Plasma screens, retailers pusing non HD screens that will become out of date within 24 months.

No matter what you say not many people can afford to spend £2000 on a tv, only to have to change it again in two years.

Retailers come clean dont sell the low spec rubbish as top quality kit, train your staff, offer true advice and then perhaps people will then feel that the extra spend at a local retailers is worth the money !!!! :thumbsup:
 

theendisnye

Standard Member
The internet is here to stay and provides the consumer wth 24*7 research, shopping and real choice.

Specialist shops need to look at their channels to market and provide a real diffrentiator rather than rely on restrictive practices to try to maintain the status quo. This is nothing new but it is always easier to blame others for your failing business model than to derive a more effective one.

Those same retailers probably moaned about the likes of Cut price chains, High street stores and EU competitors.


Those that have embrased new channels and provide service diffrentiators will shine through.

Recently I have bought a number of items via the internet (but not always on-line) and have to say that the service I received was better than when I purchased through my local store both in terms of technical knowledge, enthusaism and quality of service and what is more they didn't try to sell me an something I didn't want. I did have problems with one of the items and a a courier picked it up the next day and delivered a replacment two days later - I have never had that service from a local store.

Steve
 

The latest video from AVForums

Panasonic LZ2000, LZ1500 & LZ980 Hands-on Launch Event | No QD-OLED for 2022, new 77-inch for LZ2000
Subscribe to our YouTube channel

Latest News

iFi Audio launches new Go bar portable DAC/headphone amp
  • By Ian Collen
  • Published
Sony adds LinkBuds S to its earphone series
  • By Ian Collen
  • Published
T+A announces Solitaire T headphones
  • By Ian Collen
  • Published
Audio-Technica launches ATH-M20xBT wireless headphones
  • By Ian Collen
  • Published
Focal and Naim announce new Special Edition Ash Grey system
  • By Ian Collen
  • Published

Full fat HDMI teeshirts

Support AVForums with Patreon

Top Bottom