Re-Tales

North Carolina hi-fi dealer Audio Advice has been busy lately. As I reported in last month's Industry Update, the company recently acquired The Audio Lab, a longtime dealership based in Wilmington. As this issue went to press, Audio Advice was getting ready for Audio Advice Live, the show they put on annually at the Sheraton Raleigh Hotel. Just before showtime, Stereophile spoke with Audio Advice CEO Scott Newnam and COO Gregg Chopper via Zoom. We asked about the expansion and their approach.

For years, the number of brick-and-mortar hi-fi dealerships has been shrinking. Audio Advice, though, has been expanding via acquisition; they have stores in Raleigh, Charlotte, and now Wilmington. They're looking to expand further and considering locations outside the Carolinas.

Audio Advice was founded by Leon Shaw in Raleigh in 1978 as a classic two-channel dealership. In time, it expanded into home theater and eventually custom install and smart home systems. Today, the flagship Raleigh location has a showroom of 15,000ft².

In 2008, Audio Advice reached a deal to acquire Charlotte's Innovative Systems. Jim Williamson, Innovative Systems' longtime proprietor, "wanted to be a key part of a growing company," Newnam said. After the acquisition, Williamson continued to run the Charlotte store, but over time, his role changed. Today he oversees training, human resources, and operational systems for Audio Advice.

Prior to the Wilmington deal, for more than five years, Audio Advice had been looking to expand into the Wilmington area. Then Bill Rudisill, who had owned and operated The Audio Lab for more than 30 years, decided he was ready to retire. Audio Advice acquired the company and—as reported in our September issue's Industry Update—is now working on "a massive buildout" at the former Audio Lab store.

This wasn't the only time such a deal has been considered. "We have had dealers from other markets approach us because they want to begin the process of putting their company on a path for the future after they retire," Newnam said. "They want to run the local market for several years while training their successor."

Other times, a prospective partner is hoping to expand, or maybe they want to shed the responsibilities of running a business and get back to the aspects of the job they enjoy most. "There's a reasonable number of people that say, 'I really love to sell and work with my customers, but I don't like the payroll and the operational systems, all of the other back-end stuff that you need to do,'" Newnam said, echoing a sentiment he says he hears from other dealers. "The question we are always asking is whether we can help a retailer grow the business and better serve customers."

The key, Newnam believes, is to provide stability and invest in the customer experience. The pitch: "We're going to take everything that you've done, take care of your customer base, all the employees, but we're going to invest and make the showroom incredible. We believe that you need to have big, beautiful, incredible stores, that you need to invest heavily, so that when someone says, 'I want to come look at audio product,' they can experience everything from a $300 pair of speakers to a $50,000 pair of speakers."

To keep customers returning, Audio Advice rotates the components on display—on the floor and between stores. They want to make sure a customer can walk into one of their stores and see what's "hot" across all their product categories, and if they walk in again three months later, what they see and hear should be different. The stated primary goal is to deliver happiness to the customer and to make the buying process fun. "It feels like they're at Disneyland if you're into electronics," Newnam said.

To feature the latest "hot" products, you've got to keep up with what's new. But Audio Advice doesn't sell just any new thing. New products go through a rigorous internal vetting process: There's a form to fill out, and decisions are made by committee. "What's the cool new gadget?" Newnam asks, rhetorically. "If we come across something, we'll put it through the internal matrix and score it out."

With so much gear on-hand across so many categories and so much change, staff training is a central concern. "It's a challenge to get everyone's knowledge level up to a certain level across the board," Chopper said. Audio Advice trains everyone: salespeople, technicians, CI/smart home project managers. As often as every Friday, a training session is held aimed at sharing knowledge across the company. "We are fanatical about training," Newnam said. "That has always been a core part of the business."

Despite the focus on their bricks and mortar, Audio Advice has an active e-commerce site, which was launched about 10 years ago. The site goes beyond product listings and "Buy Now" buttons; a big part of it is a library of nearly 800 videos, including tutorials, product overviews, and buyer's guides. But the emphasis on bricks and mortar remains. "What's really interesting about that is, we're big believers in stores," Newnam said.

That dual focus—expanding online and in-store while focusing on bricks and mortar—is central to the Audio Advice approach. Even as they've moved online, they've continued to support a traditional, old-school approach, encouraging customers to support local hi-fi stores, even online. "We'll say, 'Go to your local store and buy this,'" Newnam said. "There are great stores around the country that sell this product—and only come to us if you do not have a local store near you.'"