As anyone who's been paying attention to the industry knows, music has been going through some growing pains. World-conquering guitar heroes aren't the norm. Number one albums sell less than ever. Things are fracturing into ever smaller niches.
"Across-the-board stuff doesn't work anymore," says Lace Pickups president Don Lace. "You've got to figure out where you want to go, specifically, and do that the best that you can."
That's not necessarily a bad thing. As the modern crop of guitar parts makers – purveyors of pickups, knobs, nuts, saddles, tuning pegs, and more – can attest, consumers' tastes are becoming more refined by the year. Chalk it up to the growing diversity in music, or maybe the unprecedented access to gear info for players across the country, but a pickier public is also one willing to tinker with the details until the sound is just right.
That's where you come in.
Picking Up The Slack
The conventional wisdom among those in the guitar industry has long been that when the economy nosedives, guitarists head for the parts department. Funds become too low to buy instruments, but an upgrade here or there is still within reach. The accessories market therefore enjoys a little boom. In the real world, it hasn't been that cut and dry. While some look at their balance sheets and notice the predictable bargain shopping explosion, other manufacturers and retailers report a dry spell all around.
Dave Dunwoodie, president of Graph Tech, noted a hit to everything from international aftermarket distribution to the company's extensive OEM market. "Where we really noticed it on aftermarket distribution was in Europe," he says. "A lot of places there got hit really hard – Italy, Ireland, Spain. Germany was OK. The U.K. was slow."
He also noticed a distinct canary in the coalmine effect from his premium guitar makers. "About six months before that recession hit, it hit the high end guitars and that was sort of a window into the future," he says. "Now, the high end guitars are getting really strong again, so if the last change was any indicator, I think things are about to really pick up."
Picking up is an understatement, really. Dunwoodie says that Graph Tech has enjoyed a several years of growth in distribution (boosted by new products like their NuBone XB nuts), including 15 percent over last year, with a few distributors who are up 40 percent. The company's OEM market has grown 20 percent per year since 2009. They're not the only ones. Grover Musical Products, makers of several lines of machine heads, say they've seen consistent growth of six to seven percent over the last several years.
Grover president Rich Berger says it's indeed the upgrade effect that's kept his business rising, citing an increase in cheaper instruments made overseas. "The basic quality of these instruments is good, but in many cases it's the hardware that keeps the price and quality low," he says. "Many consumers are upgrading their instruments with aftermarket accessories, which of course helps our business."
Pickup supplier EMG has also seen steady growth, including double digit gains this year, national sales manager Scott Wunschel reports. "The last five years have not been booming for anyone and let's face it – we deal mainly with hobbyists," he says. "But that's the great thing about guitar and bass players, whatever their level. They generally have multiple instruments and there's always one or two that they want to change. Pickups are a great place to start that change and we have seen a surge over the past few years."
Niche-Oriented
An advantage of aftermarket and OEM parts is that it allows manufacturers to target specific niches with relatively low-cost products. Consumers can try on different tonal identities without worrying about their wallet too much.Lace Pickups has honed on a specific demographic – metal – and it has seen its figures continue to rise over the last few years. Don Lace attributes it to one thing: doubling down on an emerging market.
"Last year, we were up 25 percent," he says. "This year, we're already up about 18 percent on top of that. We definitely attribute it to working with artists a lot closer than we have in the past, especially with our new pickups with the Mastadon boys and stuff like that. It's been a full court press."
Lace – well-known for decades for its smooth-playing and Strat-oriented Lace Sensor pickups – noticed its Alumitone pickups slowly gaining notoriety in certain segments of the market. Sensor pickups had a long history of big-name endorsements and steady sales, but maybe there was new ground to cover. After a bit of research, Lace says he and the company decided to double down on the emerging generation of metal players like Mastodon, Entombed, and High on Fire.
"It's been a daily trudge out into the trenches to find the right kind of players, just laying the groundwork," he says. "And it's definitely paying off. We're also trying to push the artists' ties with the products which we hadn't done in the past, other than resting on our laurels from like 20 years ago. [laughs] There's a whole new crowd of kids out there who aren't really Fender players and they aren't Gibson players. They're a different kind of thing. So we wanted to jump into that."
The youth market has its advantages, including the robust word-of-mouth channels that metal and hardcore bands have been building for years. "The festivals tied in with Facebook and the bands' own sites and how they do things is totally different from the other genres," says Lace. "Once you get in there and get their attention, word can kind of spread really quickly."
Keeping It Familiar
There's room for other innovations within longtime consumers' comfort zones as well. Innovator Larry Fishman has been taking evolutionary steps with new tech like the Fluence pickups and the TriplePlay MIDI system. Not only is it providing growth among early adopters ready to go fully digital on their guitar processing, it's offering renewed inroads to long-trusted big names. At this Winter NAMM, Fender unveiled it's 60th anniversary Stratocaster "Strat of the Future," complete with a Fishman TriplePlay on board. "We were thrilled by that," says Fishman. "I said, 'Right on.'''
Graph Tech's Dave Dunwoodie notes that, on some level, keeping products accessible isn't necessarily a bad thing. Though the company (possibly the biggest nut and saddle manufacturer in the world) makes over 300 different versions of nuts for its OEM operation, they limit the selection for retailers considerably. "It would just get confusing," he says. "We pick the ones that we feel would be most common and would fit guitars like Epiphones and Strats and Les Pauls, that kind of thing."
Dunwoodie goes on to explain that he tries not to stray too far from the conventional notions of what guitar equipment looks like when researching products. Graph Tech's new Ratio machine heads – which are innovatively geared so that every string takes the same amount of winding per interval – are a great example of innovation in a very plain guise.
"In developing guitar parts and components, you can't go too far off the beaten path as far as looks go," he says. "The two most popular electric guitars, the Les Paul and the Stratocaster, were designed in the '50s. The acoustic guitar was designed 300 years and still looks the same, you know? So the Ratio is something that really changes things but looks totally stock. You can't really tell if it's a Ratio or standard machine head."
EMG – for nearly 40 years the prototypical "black pickup" on shredder axes – is branching out into new colors, while Lace is experimenting with different metal finishes in an effort to be the "nice watch" of guitar gear. In short, whether you're aiming for conservative or splashy, appearances play a key role in this market.
Educating The Customer
The main secret to success, though, may be in making sure the front lines of the aftermarket business are educated. Long & McQuade president Jeff Long observes that while the aftermarket segment has sometimes lagged, the difference is in sales floor know-how. "It really depends on the salespeople," he says. "We have 65 locations and the sales are stronger where we have a salesperson who is really champions hardware and pick-ups. Stocking an assortment is important, but also challenging as there are thousands of options available for the customer."
Dunwoodie agrees, noting an oft-cited maxim from Steve Jobs: "The customer doesn't know what they want until you show it to them." Graph Tech is in the middle of a revamped repair program that's set to provide more information to sales staff and repair shops about how products like Ratio work, focusing on techniques like in-store visits and internet tools for retailers.
"I used to work in retail for five years and it's just natural – you sell what you know," says Dunwoodie. "If you know a lot about a product, you love to sell it. So that's why we want to get that message out. You have to understand it and believe in it."
D'Addario and Planet Waves product manager Rob Cunningham adds that attention to customers' own first impressions is of utmost importance on mechanical products like tuning pegs and endpins. "It's easy to forget, because a lot of us are very familiar with these products, but there are a lot of beginners out there," he says. "There may be parents of players going into these stores, and for them it can be confusing to just look at some of these products in their bags and figure out what they do."
"We don't want to take that for granted. It should be clear and simple." In turn, D'Addario has made it a point to make their Planet Waves packaging as clear as possible for customers coming across the products anywhere in the store so that no one really has to ask, "What does this thing do?"
By that same token, simply battling for floor space can be a challenge for many miniature parts. "In some of these stores, they can get a little lost among all the other stuff," says Cunningham. "So product placement is a big deal. You're really competing for that space."
Grover Pro's Rich Berger agrees. "The best way to get small goods sales is to make sure these items are easily visible and accessible to the consumer," he says. "A set of machine heads can also be an impulse item, but only if the consumer can see and touch them. Also, a good salesperson will should always try to add additional small goods to each sale being made."
The OEM Factor
The interesting thing about aftermarket parts, of course, is that many of your customers are already familiar with them as the pre-installed components on particular brands. In many cases, OEM relationships are the hard-earned bread and butter for many of these companies.
"Even with our mainstay – TUSQ, which we supply to so many manufacturers around the world – I was going to trade shows with that for five years and nobody would talk to me," says Dunwoodie. "Finally, one year, Taylor and Larrivee said they'd change to TUSQ. As soon as they did, all those guys who'd said 'No' for five years said they'd take another look."
Graph Tech nuts and saddles are standard issue on guitars from around the world now, and the company's Ratio tuners are picking up. An important aspect for manufacturers and retailers alike, though, is the way OEM works to strengthen the brand's identity throughout the market.
"It's like now when you go buy dishwashing soap with OxyClean in it, or window cleaner with Febreeze in it," says Dunwoodie. "You buy a Toshiba computer and it's branded with Intel and Windows. That goes with guitar manufacturers, too – a customer will recognize Gibson acoustics and will see that there are TUSQ nut and saddles on them. Then you'll also see a music shop selling TUSQ nuts and saddles as an upgrade kit. So it's a good back-and-forth. You want to upgrade to the same parts that Godin and Gibson and Carvin are using."
Wunschel agrees that the OEM market works for brand growth and adds that the partnerships help push new ideas. "OEM has been important to the growth of EMG from the early days with Steinberger to today with the likes of Schecter, ESP Guitars, Ibanez, and many other major brands," he says. "Different EMG models get exposure by being in guitars and in some cases models are developed because a company will ask for a certain tone or look. It's definitely a brand partnership which brings us back to continuous innovation."
With a product like Fishman's, great OEM connections lead to market-wide acceptance of newer concepts. "It was always a novelty when we first start talking about it TriplePlay a few years ago and the acceptance has spread daily. You see it everywhere – Lanikai has it on their ukuleles, Ibanez is putting it on instruments, Fender, Martin, Tanglewood."
Moving Forward
As the economy shifts into a more proactive mode, retailers would be wise to keep the aftermarket parts segment on their radar for clues about moving forward. Though things are improving, all businesses are mindful to operate with caution and an eye toward the future, and with their relatively small products and lots of room for innovation and adaption, guitar parts companies are incubators for pioneering strategies.
As part of its transition into a more pro-metal brand, Lace has gleefully adopted a more aggressive, metal-friendly approach, with self-censored slogans for its pickups boundary-pushing pickups. "We work in the metal business and they use preamps and batteries, so our mantra is 'No F*#%IN' BATTERIES!,'" says Lace. "It's an in-your-face saying, but it makes sense. You can let your hair down with this product push and it makes people smile."
Asked if the attitude shift is a turn-off to any traditional retailers, Lace simply points to his steadily increasing sales figures. "It's only a problem for those who are planning on going down with a sinking ship," he says.
