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US DEALER FOCUS: Digital keyboard sales under pressure

Ronnie Dungan by Ronnie Dungan
October 6, 2015
in MMR Global
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We polled more than 300 US dealers to get their thoughts on the current state of the digital keyboard and piano market.

Though it’s a complaint heard frequently with respect to all instrument and product categories, retailers seem to feel particularly under attack by online sales of digital pianos and keyboards with respect to unmatchable discounting, direct sales, and sales tax – or more specifically the lack thereof as it pertains to online merchants. “[There are] lots of distribution avenues that don’t have to charge sales tax, which is a 10 percent savings to customers in our state,” observes Bellevue American Music’s (Bellevue, Washington) James Andre. Ken Udell of Carlsbad, California’s Audio-Depot Decks n Effects ups the ante even further: “In a nutshell, margins are shrinking in the digital market and manufacturers are getting shady as they move towards direct sales.”

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Overall, though, this seems to be a subset within the piano and keyboard market which is providing some reason for optimism, with roughly 75% of survey participants reporting that sales of digital consoles are either up or level with 2014. Increased functionality, more realistic sounds, a small footprint, and lower price points are all frequently cited as strong selling points.

Compared to this time in 2014, digital keyboard sales for your store are…?

Up: 39.6%

Down: 25%

Level: 35.42

 

“The shift we are seeing in digital is away from just lower price items as the customer looks for better deals on higher quality instruments.”

Robert Schaeffer

Rice Music House

Columbia, South Carolina

 

What’s the breakdown, in terms of percentage, of total piano & keyboard sales for your operation?

100 percent acoustic: 2%

100 percent digital: 39.6%

Close to 50/50: 21.9%

Mostly Acoustic: 13.6%

Mostly digital: 22.9%

 

With respect to digital consoles, what price points are doing best for your store?

Low: 47.9%

Intermediate: 43.8

High-end: 8.3%

 

What brands of digital keyboards are the strongest sellers for your operation in 2015?

Kawai: 12.3%

Yamaha: 52.1%

Roland: 22.9%

Casio: 35.4%

Korg: 14.6%

Kurzweil: 4.2%

Lowrey: 4.2%

Nord: 4.2%

Williams: 4.2%

Other: 16.5% (the majority of responses in this category were, in order: Hammond, Hemingway, and Galileo).

 

What larger trends have you been noticing with respect to the digital piano & keyboard market?

“[There is a] higher online presence of low to mid-priced digitals. Manufacturers are giving better deals to larger retailers as well as B and C stock merchandise that they can sell cheaper. We can compete In price with online retailers, but the no sales tax charged online issue is still one that is unfair to brick and mortar stores! To get the deal a lot of the time, we have to include tax…. Charging sales tax on online sales will solve a lot of the problems.  This would level the field and be fair to all stores online, and brick and mortar!”

Mike Donald

JML Piano

Fayetteville, North Carolina

 

“The cheap $299 -$499 digitals being advertised are forcing all pricing downward. Large chain stores and mail order [retailers] sell price only with no concept how to build value into a product. Low self-esteem and no confidence in a sales staff.”

Ronald Klinetob

Keyboard World

LaVale, Maryland

 

“Companies like Casio and Yamaha seem to have figured out the magic price points and continually update and upgrade models without raising street price. This makes sales of new models remarkably easy, though moving big quantities of discontinued product becomes more difficult.”

Jeff Simons

Watermelon Music

Davis, California

 

“None really regarding sales. But the technology is becoming more sophisticated which appeals to many, especially the more realistic ‘piano’ sounds.”

Keith Broomfield

Magpie Music

Bega, NSW

Australia

 

“[There are] lots of distribution avenues that don’t have to charge sales tax, which is a 10 percent savings to customers in our state.”

James Andre

Bellevue American Music

Bellevue, Washington

 

“People are looking for better deals with used product vs. buying new or ‘higher end’ digital pianos or buying ‘starter’ keyboards.”

Samantha Wheeler

Music & Arts

Corona, California

 

“With an increase in apartment and townhouse living, digital pianos are increasing in popularity. People upgrade with more confidence, as well (usually after the third year of a child’s lessons… if they make it that far)”

Katherine Irving

Sound of Music

Abbotsford, BC

Canada

 

“People are looking for better authenticity, reliability, and fewer buttons. Flashy features don’t mean as much as nice cabinets and ‘acoustic piano’ performance.”

James Harding

Gist Piano Center

Louisville, Kentucky

 

“Digital pianos have replaced acoustic rentals as a springboard into the new acoustic piano market. Although the emphasis of our company is and has always been the sale of acoustic pianos, without digitals we would not be able to survive. Roland digital pianos are the most sensible alternative to the acoustic piano on the market today. They are a good value and provide a host of high quality features.”

Dave Goodman

Colton Piano Gallery

San Jose, California

 

“In a nutshell, margins are shrinking in the digital market and manufacturers are getting shady as they move towards direct sales. Certain large, digital keyboard companies have, once again, sabotaged their own dealers by lowering prices without meaningful price protection and by also putting out new models with very few changes, forcing dealers to liquidate older inventory at a loss. Meanwhile, certain manufacturers are not being honest with their dealers in too many ways to list, and some are even breaking state Fair Dealership laws. Like many manufacturers today, some keyboard manufacturers are beginning to sell direct or directly through a single dealer – a practice which may as well be considered direct, but it gives the manufacturer deniability. Audio-Depot dropped its largest keyboard manufacturer last year because they were doing all of the above. I have gone to the Korg website and seen keyboards that have a MAP price advertised for sale at what is normal dealer cost and apparently direct or directly through a single dealer. I have gone to the Akai website and seen products that have a MAP price advertised at a 30 percent discount to normal dealer cost being sold direct. Why would I want to carry these lines?”

Ken Udell

Audio-Depot Decks n Effects

Carlsbad, California

 

“As Yamaha continues to innovate and grow in digital technology, sales continue to increase. Their brilliance doesn’t just stop with the Clavinova and Arius digital pianos, but carries over into the Yamaha Hybrids, Silent Series, and Disklavier pianos as well.”

Steve Salerno

Rockaway Music Co.

Morris Plains, New Jersey

Tags: Dealer FocusUS Market
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