From the February 2018 issue of Acoustic Guitar | BY BRIAN WISE
If there’s one breed of customer that rankles guitar-store owners, it’s not the unreasonable haggler or the teenager who overworks a Nirvana riff for an afternoon. More than anything, it’s the shopper who comes to examine an item but fully intends to purchase it online elsewhere. “Showcasing,” as it’s known, is not new, but it’s increasingly in the open, and indicative of a fickle retail environment where buyers chase deals via the internet.
“We can see them,” says Michael Simmons, an associate at Gryphon Stringed Instruments in Palo Alto, California. “They’ll order on their phones right here in the store. That’s just a fact of life.”
As demonstration videos and 360-degree imagery entice customers to take a chance on guitars they haven’t yet played, many brick-and-mortar retailers are beefing up their websites and focusing on digital platforms such as Reverb and eBay. Music Trades, an industry trade publication, estimates that online business for independent music stores accounts for close to 20 percent of their revenue, though several owners tell Acoustic Guitar that it’s more than 50 percent.
At the same time, dealers are honing their business models in new and unusual ways, whether by selling “starter packages” (comprising beginner instruments, accessories, and instructional books), or creatively marketing used instruments. Some stores will track down guitars from a customer’s birth year, or models tied to specific moments in music history (e.g. a late-1940s Gibson J-50, similar to what Bob Dylan played on his debut album).
Independent retailers aren’t necessarily concerned with competition from online merchants like Amazon and Sweetwater. Guitar Center, which has over 260 U.S. stores, has cornered parts of the industry even as it experiences financial troubles of its own.
And well-documented shifts in musical taste have taken a toll, too, as fewer teenagers and Millennials pursue a passion for the guitar. Though some dealers dispute the severity of this phenomenon, the core consumers for vintage instruments are said to be well-to-do men between 45 and 65 years old.
Dana Bourgeois, the veteran guitar maker in Lewiston, Maine, says that the most successful shops have large online inventories. “That old model of putting the guitars on the wall and hoping that people will come by and like them doesn’t seem to be doing so hot in our market,” he says. Consumers, too, are savvy to the lure of online “guitar porn” and marketing ploys. “The stores that are doing well come across as straightforward and honest and legitimate,” Bourgeois says. “They don’t sound like a big sales pitch. They just tell you the facts of the instrument and then let you decide for yourself.”
Walter Carter, co-founder of Nashville’s Carter Vintage Guitars, says, “We really try to avoid saying much of anything subjective,” referring to online descriptions. “We say, ‘It has a really deep tone or a strong midrange.’” Carter’s website lists instruments by Bourgeois, T.J. Thompson, and Santa Cruz, mostly between $2,000 and $5,000, as well as Martin prewar models selling for as much as $75,000. But Carter expresses caution about online retail. “It’s of critical importance for people to play a guitar. If you have a critical ear, you’re taking a chance by ordering online.”
Not every shop owner agrees. “The reality is that not everyone lives in an area where you can play the kinds of instruments that we have,” says Adam Dardeck, a sales manager at the Music Emporium in Lexington, Massachusetts. The store, which turns 50 this year, launched a YouTube channel in 2014, that now features dozens of instrument demos. Three or four employees take turns updating the site and producing content. Other stores, such as Elderly Instruments in Lansing, Michigan, produce videos highlighting “oddities” and “collector’s items,” sometimes played by touring guitarists.
A more divisive force is Reverb, the online guitar bazaar, which launched in 2013 and generates $30 million in annual revenue, according to Crain’s Chicago Business. Southside Guitars, a shop in Williamsburg, Brooklyn, uses Reverb’s marketplace heavily. Owner Sam Taylor says he welcomes the fact that Reverb—unlike eBay and some other merchants—doesn’t take a large commission on sales, and is an effective marketing tool. Guitarists who encounter Taylor’s virtual storefront on Reverb often visit the shop when they’re in New York. Conversely, a customer may try out the instrument in store then make a bid for it on Reverb. Taylor admits that as neighborhood rents have soared he has contemplated operating solely as an online retailer, but he notes that Reverb is not equipped to handle all aspects of the business. “The best part of the store is people bringing you stuff to buy,” he notes. “I couldn’t do that if I just had an online business.”
Some guitar makers worry that Reverb drives down prices through its bidding mechanism. “It’s viewed as a race to the bottom,” says Bourgeois. “What Reverb does to a high-end brand is it slowly chips away at all of the margins for all of the dealers, while slowly cheapening every brand.” Though Bourgeois says that he is having one of his most successful years ever, “there’s a great deal of risk involved with that price-cutting environment.” (Some dealers suggest they may set prices artificially high on Reverb, knowing they’ll be negotiated down.)
A 20-minute subway ride from Southside Guitars, in a scruffy Downtown Brooklyn mall, is Guitar Center, which beckons guitarists with a much larger and cheaper selection. On a Saturday afternoon, the walls of an acoustic room are lined with more than 100 new instruments, including many sub-$500 Yamaha and Taylor models, plus entry-level ukuleles and mandolins. An employee tells me that the location does a healthy business with young parents looking to start their children on an instrument, though he admits it earns few points for coolness.
“People love to talk trash about Guitar Center,” he says, noting that for several years the company was managed by Bain Capital, the investment firm co-founded by Mitt Romney. As he speaks, two teenage boys practice “Blackbird” in an adjacent booth. Much of the floor space is devoted to electronic keyboards, DJ equipment, and amplifiers. Despite the effort to be all things to all musicians, the mega-chain saw its credit rating downgraded twice this year into junk status as it faces $1.6 billion in debt.
“They aren’t our competition, but they’re such a big player that we hope they do well for themselves,” says Gryphon’s Simmons, who is also the co-founder of the quarterly Fretboard Journal. “If they do happen to go under, we’re afraid they might take some of their suppliers down with them.”
Serving the Vintage Market
In the case of vintage instruments—which have risen to the value of “investment art” over the last 30 years—a different trend emerges: Owners are retiring, decluttering, and selling off their collections. With fewer potential collectors, values may see an impact.
Simmons describes a longtime customer who turned 65 and brought in several guitars. “He said, ‘You know, this is just the first batch. I want to get my collection down to under 100.’” The customer (who declined to be interviewed for this article) started buying instruments when he turned 40, and eventually had some 300 in his collection. “He’s been bringing them in five and six at a time,” Simmons says, “So we’re finding that our supply of recent vintage and actual vintage instruments is much better than it ever has been.”
Maple Street Guitars, a 35-year-old shop in Atlanta, Georgia, is among the dealers to resist the call of online sales. It doesn’t operate an e-commerce website, though 20 percent of its sales come from phone orders and a small number are made through Reverb. Lindsay Petsch, a sales associate and the son of the founding owners George and Claire Petsch, recognizes many of the forces unsettling the industry—Baby Boomers downsizing, local sales taxes that drive potential customers to the internet, the growth in the used guitar market.
But while knowledgeable advice and service remain a family mantra, Petsch acknowledges, “Generation X and Millennials are less appreciative of the service. Most have big student loans and much less disposable income. So they’re price-savvy.”
There’s also a recognition among dealers that some boldface instruments—whether a Martin D-28 or a Taylor 810—are so consistently built that it wouldn’t matter where you buy them. “I don’t feel like Amazon and Guitar Center are our real competition,” Simmons says. “It’s more like Carter Vintage, Retrofret Vintage Guitar, Elderly, and George Gruhn. We’re all scrabbling after the same vintage instruments. That’s how we’re competing against the big giants selling the new stuff.”
At Mass Street Music in Lawrence, Kansas, owner Jim Baggett laments that University of Kansas students buy more iPads and iPhones than guitars in the first week of classes. “It’s easier, it’s a communications tool, it’s something you can socialize with,” he says. “We’ve adjusted to it. The people who buy our higher-end acoustic guitars are older people. Millennials and younger people are not buying $5,000 and $6,000 guitars.”
Serving Local Musical Communities
Elderly Instruments in Lansing, Michigan, offers classes including a four-part ukulele bootcamp and an arranging workshop. Local and touring musicians periodically give in-studio performances, some of which have been streamed on Facebook Live.
Mass Street Music hosts open jams and clinics in its Lawrence, Kansas, store. Recent examples include a gypsy-jazz chord workshop, a Saturday bluegrass jam, and a class on the history of high-end acoustic guitars.
Nashville-based Gruhn Guitars regularly hosts in-store events, including a swing-guitar jam, a free restringing clinic (which doubles as a guitar recycling event), and showcases for various manufacturers.
This article originally appeared in the February 2018 issue of Acoustic Guitar magazine.