Audio Retailing: Change is Certain

People of my generation have learned that change is certain. You can't know what the change will be, but you can bank on the fact that there will be serious change over the next ten years. Look at the historically most important change in ten years: microcomputers.

In 1982, Apple was a significant company, but tiny compared to its current giantism; a partnership with mega-dominator IBM would have caused a serious number of deaths from laughter. Stereophile bought its first computer that year, sensibly choosing a solid Hewlett-Packard running the dominant operating system of the day, CP/M—which two years later was virtually obsolete.

Change among high-end hi-fi manufacturers is much slower than in the heady world of microcomputers. Look at the most major high-end companies now: Adcom, Apogee, Audio Products International, Audio Research, AudioQuest, B&W, Bryston, Conrad-Johnson, Counterpoint, Infinity, KEF, Krell, Mark Levinson, Linn, MIT, Monster Cable, Magnepan, MartinLogan, NAD, Paradigm, Snell, Theta, Thiel, Vandersteen, Wadia. (I've included here only the make-or-break products for the stores that sell them, not all good companies.) From this list, only Paradigm and Wadia didn't exist in 1982—not much change for a ten-year period.

The same isn't true in hi-fi retailing, particularly if you include the "big boys." Tech Hi-Fi, Crazy Eddie, Rogersound Labs, Leo's Stereo, Stereo Superstores, Atlantis Hi-Fi, Federated, and Pacific Stereo together did hundreds of millions of dollars annually—admittedly not in High-End Audio—and now no longer exist. High-end retailers tend to be much smaller and more stable, but the recession the country is experiencing has made their lives extremely difficult. I talk frequently to retailers, and there are a few areas in which they all agree: business is very tough, custom installation is a necessity, and Home Theater is the wave of the future.

What's this mean to you? In all likelihood, the place where you buy high-end equipment in five years will look different from where you now shop—even if it's the same store. There will be a pitch for your high-end business from a local chain trying to distinguish itself from superpower retailers like Circuit City. Your current retailer will undoubtedly be able to put on an amazing home-theater presentation, with or without marketing/engineering gimmicks like THX. Although he'll still rely on mid-fi product to keep his store open, my guess is that mid-fi will be less visible as this is an area where he competes directly against the smaller chains. If he's smart, he'll put together very high-value, relatively low-cost systems from high-end companies, offering inexpensive systems with great sound. Again, if he's smart, the environment he offers will be much more comfortable than it now is, particularly for women buyers (as well as men who aren't as comfortable with electronic technology as you are).

Price competitiveness will continue to be fierce, but hopefully this will act to keep retail price increases to a minimum rather than simply erode the dealer's margin. (Without a healthy margin, your dealer can't afford to employ people who know anything about sound quality, system matching, or any of the other things which make a high-end retailer the place to shop; nor can he afford to inventory the more obscure products you may want to audition.)

Mail-order buying may increase, but primarily where authorized dealers vie with each other nationwide (a practice which most high-end companies strive to eliminate). Mail-order in general can adequately serve only a small portion of the total high-end market.

Where should you buy? It's up to you—the high-end marketplace will be formed by your decisions. The simple, and correct, answer is that you should shop where your needs are best met. Just be sure you take into consideration all your needs, not just low price. I've bought a lot of computers for Stereophile since 1982, and long ago discovered that low price fades quickly as a virtue. But good service—not guaranteed by a high price, but eliminated by the lowest—never does.—Larry Archibald

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