The Lingering Effects of the Pandemic On Music Retailers

The pandemic saw a lot of highs and lows for musical instrument retailers.

Of course, no industry was spared the global economic impact of 2020, but even a $6 billion dollar industry such as musical instrument retail had both ups and downs as a result.

While there were some short term gains in the form of consumers using their stimulus cheques to buy musical instruments, and an overall increase in the number of people actually spending time learning their chosen instrument (driving sales of consumables and accessories), there was of course a huge dropoff in foot traffic for brick and mortar retailers, as well as the lesser known issue of significant supply chain issues.

Brian Kelleher, the owner of KillerGuitarRigs.com explains that “the biggest challenge for us, as a website that recommends music gear, was finding music gear in stock. Normally a list of the best guitars for beginners needs an annual refresh. In 2020, we were refreshing content every few weeks as things went out of stock and didn’t come back.”

Even the biggest retailers in musical instruments in the US - Guitar Center (for brick and mortar) and Sweetwater (for online sales) - were beset with supply chain issues that ranged from smaller boutique manufacturers right up to the big leagues – Gibson, Fender and others.

Decades Of Change

Of course, the last few years have seen a lot of change for music retailers.

Changing consumer preferences and musical tastes over the last ten years have had a profound effect on the core products stocked by many retailers. For example, according to NAMM (that National Association of Music Merchants), sales of acoustic guitars grew about 36% from 2009 to 2017, an increase of $141 million to the market.

In addition, as big-box musical instrument retailers went head to head, the market for used instruments grew significantly, with online marketplaces such as Reverb stepping in to carve out a huge market for themselves.

Reverb especially drove the used market by convincing many big names in music, such as Megadeth and Smashing Pumpkins, to sell off their own used gear on the site, creating “artist stores” to draw customers to the platform.

On the upside, musical education in schools across the country has increased significantly, and for good reason. Studies indicate that students with some experience of musical performance score between 45 and 63 points higher on verbal and math sections of the SAT. Much of this is believed to be down to studies that show that learning to play a musical instrument stimulate the connections between the left and right sides of our brain, allowing people to better apply their creative skills to solving logical problems.

A new marketing opportunity

One of the biggest boons to the guitar market in particular in the last few years is the growth of the guitar community on YouTube. Many guitar centric YouTube channels boast subscribers in the millions, and virtually all of them feature sponsored music gear heavily.

For example, Neural DSP recently launched a physical modelling amp, the Quad Cortex, to complement their wildly popular plugin series. The pedal was initially launched with some significant issues in the operation of the software, but was still featured in sponsored videos across all of the major guitar YouTube channels within four days of it’s launch.

Following repeated criticism of certain usability issues, Neural DSP issued a patch, and then paid each of the YouTubers an additional fee to make “update” videos, going back over the issues that were now repaired.

Such is the power of YouTube in the guitar marketplace, any criticism of a product could very well lead to failure, whereas positive product demos by the right channels can all but guarantee success.

Pandemic Effects on BM

However, as the pandemic first made waves in several countries that are the origin for not only completed guitars but also the raw materials for guitar components and consumables, supply chain issues happened early for the guitar market.

Immediately after the first round of stimulus cheques were spent in April of 2020, a large amount of retailers found themselves placing orders for stock that could not be fulfilled. By mid summer, the big news in the guitar community was that brick and mortar retailers such as Guitar Center were visibly empty of stock.

Online retailers were similarly short stocked, but with no physical stores, it was not as much of a topic of discussion.

Traditionally guitarists much prefer to purchase things in person as quality among guitars even in the same range can vary massively, and of course it’s important to play a guitar to get a feel for whether the dimension work with your playing style.

However, cautious of catching the virus from crowded retail spaces, more guitarists moved to purchasing online than would normally do so.

The mass exodus for consumers from brick and mortar to online, coupled with difficulties in getting products back in stock, combined to see Guitar Center reach $1.3 billion in debt, again filing for bankruptcy in late 2020.

Guitar Center has had a number of rocky years in their history. While many companies struggled in the years following the 2007 financial crisis, Guitar Center were sold to Bain Capital at the beginning of that year due to mounting debt. Bain would later sell GC to Ares Management in 2012, shortly after Standard & Poors downgraded it’s debt rating for Guitar Center to “junk bond” status.

Coming out of the Pandemic

So where does that leave retailers in 2021 and beyond?

Musical instrument retailers, more than ever, need to find a reason to get the public back into their stores if they are to regain ground post pandemic.

With a huge growth in beginner guitarists in the last year, there is a huge opportunity now for retailers to earn some lifetime customers, but for brick and mortar stores it may be too late as these players will already be accustomed to buying online.

The reality for musical instrument retailers in 2021 is that, unless they find a way to increase their online presence, or find a way to make themselves indispensable to their local music community, their goose is cooked for the foreseeable future.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes