When famed pianist and composer George Gershwin wrote “Summertime”, I’m certain he was not referring to life in the music products industry. After a two-year hiatus due to the pandemic, a more typical mid-year period is upon us, amplified in a negative way by the current economic environment. The living was relatively easy for the past couple of summer seasons, outside of the battered Live Sound and Events business. My rep firm Reflex Marketing was quite fortunate in this regard, as our vendor portfolio is decidedly skewed towards fretted instruments, home recording, and other products that fared particularly well during 2020 and 2021. For us, there was not a hint of a slowdown, nor the dreaded “dog days” associated with this time of year for music retail.
Back to the Future
The approaching summer of 2022 appears to have returned us to a more typical time for sales, with the pendulum swinging back farther than usual for a few identifiable reasons. The supply / demand imbalance has changed rapidly in some sectors despite continued delivery headaches for importers. Consumers have been bitten by inflation, especially those with lower incomes who are disproportionately hurt by high gas and food prices. Combine this with a more recognizable seasonal slowdown, and you have the makings of trouble in paradise. I’ve written before about the cyclical nature of sales in our industry, broken down into identifiable 8-week segments. Is this time any different? Have we come to the end of a very hot commercial period for musical instrument sales?
Finding Pockets of Opportunity
Suppliers should recognize what is happening right in front of them and make efforts to counteract the situation. We seem to be caught in a period where inventory was king, and nearly every vendor had been forced to raise prices due to production costs and outlandish inbound shipping charges. Now the tide is turning, so as we used to see in summer, promotions, rebates, and incentives need to be put in place to attract both dealers and consumers. Resellers are now forced to deal with large “product dumps” that have occurred recently from some prominent manufacturers, squeezing open-to-buy dollars. It is more important than ever to differentiate and make a clear case for why your offerings are the ones to purchase. This may come as a pain point for many who have been saddled by high operational costs and compressed margins, but not doing anything is a decision in and unto itself, one that may present deleterious side effects.
We’ve Seen this Movie Before
Time will tell how this current situation will pan out. The Fed will attempt to orchestrate a “soft landing” for the greater economy, and rising interest rates may finally cool off the housing market and consumer demand in general. Unpacking what is happening in the big picture compared to a more typical June through August for the musical instrument and pro audio business is a challenge. Remember that we’ve been here before, and despite the obstacles we’ll come out of it in due time. Recognize the things you can and cannot change, and concentrate on adding value, regardless of your role in the industry’s “human supply chain.” We can each make a difference, retain a positive outlook, and keep doing what we do best – selling musical dreams to the millions of people who desire a creative outlet to express themselves. Let’s remember this as we barrel headfirst into the future, cognizant of the fact that even in tougher times, our industry has always been resilient. And in the meantime, please stop and reflect on how good we all have it, enjoying life, family, friends, and music this summer.