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Taking DJ Sales Out For A Spin: DJ Customers Have Gone from the Margins of MI to being High-Margin Customers, but They Want to Know You Know Them

by Dan Daley • in
  • Features
  • March 2019
• Created: March 14, 2019

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If the ultimate drummer diss-joke is “How many people in your band? Five – four musicians and a drummer,” then where does the DJ fit in? Ignoring the endless arguments about whether they qualify for musician status, DJs have built a complex culture and market of their own, one that parallels and often competes with conventional configurations of music – wedding band or wedding DJ? (That question elicited over 1 million responses on bridal boards like The Knot and WeddingWire.com.)

Then there’s the crossovers: Limp Bizkit, Linkin Park, and scores of other successful bands have integrated turntables with guitars and drums. Within the DJ universe there are dozens of subcultures that can argue digital versus vinyl for days on end.

But wherever they fall on the spectrum, DJs mean business, especially for MI retail. Market-data portal Statista shows steady growth of DJ equipment in the U.S., rising from $114 million in 2011 to over $164 million in 2017. That’s roughly in line with NAMM’s data, which further shows that DJ controllers – any of a number of devices used to manipulate audio tracks – account for over a quarter of that revenue. However, as NAMM’s and other market surveys note, the foundational product in the DJ arsenal is a Mac laptop computer, which largely bypasses the MI distribution channel, along with leading DJ software packages, such as Native Instruments’ Traktor Pro 2, Serato’s Scratch Live/DJ, and Magix’s Digital DJ 2, all of which are sold directly through downloads costing $100 or less.

Thus, it’s largely the ancillary equipment that accounts for much of the DJ sector’s considerable revenues, but it’s quite a boatload of SKUs, including interfaces, controllers, media players, mixers, headphones, video systems, lighting and effects. So how does the unique world of the DJ fit into the larger marketplace of MI retail?

Weekend Warriors to Superstars

“The technology changes, but the market really doesn’t,” observes Randy White, senior buyer of pro audio, lighting and DJ products at Chuck Levin’s Washington Music Center, in Wheaton, Maryland. The market tiers he enumerates – entry-level and bedroom DJs; “weekend warriors” who handle the meat and potatoes of DJ gigs like weddings and parties; nightclub spinners who develop regional followings; and finally the superstar concert-touring DJs – represent a fairly solid and predictable taxonomy of the DJ universe.

White stresses staying on top of the shifting and varied technology base of record spinning, which ranges from old-school turntablists who still carry vinyl in crates to controllers loaded from a thumb drive. But much of the business now is centered on hardware controllers, made by companies like Pioneer and Numark, running software from Serato, the sector’s biggest player, as well as Pioneer’s Rekordbox, Native Instruments’ Traktor DJ, and AtomMix Virtual DJ Pro. Vinyl is still a thing, but most of the “records” used by DJs are actually platters embedded with time code read by the specialized turntable’s needle, the information sent through a soundcard interface/mixer to the laptop via USB, which lets the software know key information such as the velocity of the track. These let DJs do all of the usual tricks of vinyl, including scratching a track.

In fact, the common placement of DJ equipment within stores’ pro audio departments reflects the complexity of DJ technology, which uses some of the same SKUs as pro audio, including headphones, wireless microphones, MIDI keyboards, and computer interfaces.

White recalls that when he set up the area’s first dedicated DJ department, at Veneman Music in nearby Rockville in 1990, typical MI store customers took a dim view of DJs, regarding them as something less than musicians. “Back then, DJ equipment was being sold out of car stereo shops,” he remembers. “In the nearly 20 years since then, everything has changed. Now, the DJs are the superstars.”

Crossing Departments

Dennis Shepard, Alto Music’s VP of store operations and manager of its Middletown, New York location, says that the DJ’s ascendance in music’s hierarchy has led to crossover with many other aspects of MI retail, including pro audio and lighting, and it’s not simply a matter of technology overlap. “DJs are competing with each other and they’re using full-on production to differentiate themselves,” he explains. “They used to just light themselves on a stage, but now they’re also lighting the entire venue. Uplighting has become huge, using fixtures like Chauvet washes for the walls and moving heads to create excitement, and with that comes more trussing and lighting controllers. They’re not just playing music – they’re bringing an entire show now.”

Shepard points out that, as with many digital products, DJ items like controllers can scale fairly readily from entry-level to professional applications, a point he makes to parents who come to the store looking to accommodate their kids’ interest in DJing. “There’s been a lot of DJ education programs that have come up in the last 10 years, too, and that’s stoking younger buyers,” he says. He adds that DJ customers are not the types to be easily distracted by other departments. “The pro audio department is at the rear of the store and they tend to make a bee line for it,” he says. “They’re not stopping to look at guitars.”

That kind of laser focus on their craft is why Shepard stresses that MI retailer who want to the DJ trade need to provide knowledgeable support for those customers. Part of that at his store is

having DJ Victor Vargas on staff, at least when Vargas isn’t touring on another continent. “You have to be able to know the nuances between trance and house and other genres,” says Vargas, who says Milan, Mexico City and Barcelona were on his tour itinerary last year.

“You have to build the relationship with them in order for them to trust you, because even if a DJ travels all over the world for work, they’re still coming to the store close to home for their gear, from controllers to cables. That’s the kind of loyalty you want.”

Part of Pro Audio, and Then Some

Across Guitar Center’s 290-plus outlets, DJ product sales remain a steady percentage of the mega-retailer’s annual sales, says Patrick Sullivan who was VP of merchandising at Guitar Center and was recently named president of InMusic, whose brand portfolios include Denon DJ. While those numbers may spike a bit in a few hot spots like Miami, Los Angeles, Chicago and New York, it suggests that the DJ has become an integral component of MI retail in general nationally.

“The DJ used to be the person playing the records and keeping the event moving along, but now they’ve integrated instruments and other musicians into their shows,” he says, noting a show at Miami’s Ultra festival in 2016 where Rage Against The Machine’s Tom Morello joined DJs Knife Party and Deadmau5 on stage during a performance.

“They’re putting on productions now, they’re part of bands, and that’s brought many more products into that ecosystem.”

GC groups DJ and pro audio products in the same area of its stores, but Sullivan says that’s a “natural adjacency” rather than a strategy or a policy. It’s also where Guitar Center, one of the very few MI retailers that’s also an authorized Apple sales outlet, bases its computer sales from. “The computer is still the ‘brain’ of the DJ set up,” he says, adding that DJ and pro audio also share a lot of other product types, including interfaces, mixers and controllers. (Washington Music Center’s Randy White says that’s been their experience, too. “You’ll see that customer just walk straight back to pro audio and never stopping or even looking at anything else,” he says.)

Like other retailers who want to target DJ customers, Guitar Center tries to keep working DJs on its sales staff as an interface with that cohort. Sullivan says they’ve gone further most, collaborating with manufacturers on some products – he says they worked with the reinvigorated Technics brand in 2016 to get a version of their SL-1200 turntable, a legend in DJ lore, back on the market – and they have a presence at major trade shows catering to them, such as DJ Expo, where he says they are actively looking at new products to help develop markets for. Sullivan added that as GC’s lessons program is completely rolled out to all of its stores sometime next year, DJ training, which is now available in certain locations, is planned to be on the national curriculum.

Sullivan says these steps are necessary for a market segment as dynamic as DJ is. “It’s a very progressive culture, always looking for new things,” he says. “It also has a very well-developed community, and it’s encouraging to see the continued success of DJ music festivals, and seeing them interact with other genres and instruments, which is helping it go more mainstream. The DJ market is very robust.”

Good Product Turnover

Sam Ash Music, which has 47 outlets nationwide, doesn’t deal in laptops – COO Sammy Ash says it’s unreasonable to expect sales people to be fully conversant with DJ equipment, lighting technology and computers, and that margins in computers are razor thin.

“However,” he says firmly, “we have everything else,” enough to keep actual DJs on staff at a number of key locations. Given the peripatetic nature of the DJ trade, Ash says several of those staffers will travel regularly for gigs, but alert store managers about their schedules.

Ash says the correlation between DJ and lighting products is strong, and in-depth knowledge of both categories is critical. “We consider DJ to be part of pro audio and lighting,” he says, noting that Sam Ash Music first entered the DJ market in the late 1960s, importing products from Europe, including the now-vintage Soundout brand, a precursor to Soundcraft, from the U.K. Given the store’s Greater New York area roots, he’s not surprised that demand for DJ equipment has been fairly steady there over the decades without ever really peaking or even periodically spiking, such as during the Disco era of the late 1970s. “It might be that we’re also a brass and woodwinds house, we have more categories than most retailers, so DJ seems like more of a steady thing over time,” he speculates. “But we’re definitely deep in it.”

Ash says what sets the DJ category most apart is how quickly and decisively its product mixes change. They do some trade-ins on some equipment, he says, but the vast majority of sales are for new equipment. ”DJs are constantly upgrading, because their shows are for other DJs, too, and they have to have the latest stuff and look cool. So there’s a decent amount of turnover in DJ, which is good.”

DJ has become a fully-fledged MI category in the last decade, and it’s one that extends its tendrils across multiple departments. As importantly, it’s now also on the radars of parents as a legitimate music-career pursuit, which will help boost product sales and encourage it becoming a lessons category of its own in more stores. But, Randy White cautions, it’s not a category for dilettantes at retail. “You need to be fully onboard and all-in for DJ,” he says. “They know it when someone’s not.”

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