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Over the past few years, we have all seen many piano dealers suffer through some very hard times. Is it because of the decrease in the emphasis on the arts in our education system? Could it be the economic state of the United States? Might it be the invasion of the internet sellers? Or, has it become too expensive, by way of floor plan interest, advertising, etc. for the independent retailer to make it??? Are the manufacturers helping the retailers like they did in the 70's, 80's and 90's? Why has the desire to be in the piano retail business become just a desire and not a reality to our young business investors as, even according to our own trade magizine articles, the net profit nationwide averages in the low single digit percentages? Not one personal opinion do I post. I would like to see what the masses of professional dealers and piano forum populations feel is causing this.

Respectfully,

I think it isn't just the piano business. How many independent grocery stores are left? How about hardware stores? Funeral parlors? Automobile dealerships even? Retailing and the service industries were once the bastion of independent "mom & pop" businesses. That is less true every year.

Or bookstores? Or farms? Hairstylists? Coffee stores? (Starbucks, anybody?) I agree with you, TX-Dennis; it's not clear to me that this is a problem hitting only, or particularly, the piano industry.

We need our economists (yoo-hoo, piano*dad! ) to offer an opinion as to whether trends in the piano industry are any different than the overall retail/service industry.

At one time not so long ago, a piano was a very common place item in the home, almost a tradition. TV, XBOX, Playstation, and the Nintendo have taken over as priority. There is apparently no problem on spending 10-20K for a home theatre setup, but you are mad if you drop that much money, or more, on a piano.

From my recent shopping experiences the piano business is very cutthroat and not getting easier.

B

Um, Monica, that's not what I study.

Nonetheless, I can offer two general comments. Franchising tends to have a number of beneficial effects, some on the supply side of the market and others on the demand side.

First, franchising can lower overall cost by economizing on a number of specific things. If there are scale economies in the provision of any inputs, then large scale provision of those inputs results in lower cost. Some of that benefit (or most of it, in the long run) gets passed on to consumers, but some of it goes to firms in the form of higher returns. Advertising may be one of those inputs where a scale economy might be present. I'm sure there are others as well in each industry where franchising has made significant inroads.

Another benefit, on the demand side, is that consumers may view a franchised product as a lower risk purchase (other things equal). You know that a MacDonalds fry is what it is in Seattle and in Miami, and the MacDonalds corp. works assiduously to ensure that the raw materials AND the processing by its franchises leads to that uniformity (at least within a given cultural space).

The independent firm may have certain advantages as well. Where the product produced is on a small scale there is much less benefit from franchising. Hence no Jordan-Kitts of Steingraeber. Also, in industries where service is important (not just a homogeneous product) the benefits of uniformity may be lower. Here, the retailer who knows local preferences may be able to fill a niche effectively.

The problem for pianos, of course, is that many consumers may think of them like MacDonalds fries ....a big black homogeneous lump, and in the case of entry level pianos one that they want for the lowest possible price. They may not know about (or care about, even if they know) any other service the dealership might offer. The afficianados argue that pianos are all individual and that what a dealer does to them is crucial for presenting them at their best. But independent dealers (all dealers, actually) have some trouble communicating the meaning of that service to customers since it's a hidden process and it requires some skill to discern its effects.

In many markets, it's not perfectly clear that franchises are destroying independent retailers. They may also be expanding the market. I think of this every time I go to my local coffee house. It roasts its own beans and provides a diversity of coffees that you will never see at the ubiquitous Starbucks. As long as there is a demand for that variety, there will be a market niche for independent firms.

the dealers i have spoken with about this say it is the internet that has changed everything for them.

that, and cheap chinese pianos that are getting better and better....

and the devaluing of the u.s. dollar isn't helping, either.

What pique said...

What Kenny and Pique said.

That's not all of it.

When one looks at total sales, be they Chinese or not, and compares those sales to total sales numbers from decades before, we find that sales are most definitely in decline, even though the population of the United States has added over 100,000,000 to its population within my lifetime.

Chinese and the internet may be factors, but they cannot explain drastically declining sales in the midst of a major increase in the number of possible consumers.

The fact is that consumers have voted with their feet, and the acoustic piano is fast on its way to being a niche instrument. And when it does...

Most of us won't be able to afford one.

I remember when every home had to have a piano and a cat!

We need more than one cat. My dog eats them.

Isn't dog food cheaper.

You mean, people pay for cats? Get outta town!?

Blame it on the slogan, Upgrade Me"!

The cat's been upgraded to "fido".

The "piano" has been upgraded/downgraded to a "threatre room" with surround sound!

There seems to be several categories of piano consumers.

First time family purchase

Upscale Furniture/investment Buyer (includes players)

Serious , skilled Pianists/ advanced players

The piano market is missing that entry level first time buyer. There are several reasons for this. Gas prices have taken away the piano monthly payment. First time house / home equity LOC not available, multiple after school activities, Techno toys/ time on the internet.

The acoustic piano is slowly becoming a buggy whip for which there is an Amish market. With the importance that the keyboard plays in music theory and fundamentals, as long as we continue to embrace the diatonic basis for instruction there will be a need for Keyboard. Quite frankly, the pie gets smaller, annually.

There will be a need for fine performance instruments, and conservatory quality practise instruments, etc.

Increasing the pie, is the increasing challenge for the acoustic piano survival. More and more Piano stores are struggling to survive. Over supply and soft market trends continue to present challenges.

The signifigance, importance of music learning for the young child needs to be advertised far more vividly than the next College Sale. Major Event sales are an important component for today's dealer. However, they will be of little consequence, if we don't reach the potential new Piano Players. Keyboard instruction in elementary and middle school should become part of the Fine Arts curriculum.

Harold Smith had it right: Concentration, Coordination, and Confidence. These are the benefits from studying piano that become lifelong attributes.

The overall lack of demand for accoustics may also be impacting the private used market. There was an article in our local newspaper this weekend about the decline in the value of used pianos. One of the interviewed technicians blamed the change on the glut of older pianos entering the market from retiring baby boomers who are downsizing to smaller homes or condos. However, it was also pointed out that at, say $1,000, the cost of moving and tuning a used piano represents a significant percentage of the total cost, especially for something with an uncertain life expectancy. With digital pianos undercutting the very low end, and entry level new Chinese pianos starting at $2,500 - the inexpensive used piano has become unattractive to most buyers. One rebuilder commented about how sad it was that many decent instruments with years of life left in them were simply going out to the dump; they can't even be given away.

I couldn't agree more. I don't care if either of my children(both just starting), ever become accomplished musicians. The benefits they gain as mentioned above will translate into an ability to teach themselves and their offspring anything-the ultimate parental litmus test.

I think a good portion of the used market implosion can be attributed to better quality, better feeling digital pianos. These as you know can be purchased from Costcos, BJ's, etc and not necc. the local dealer.

from Ron Gardiner
Agree on all. One other factor is that so many piano retailers condemn present-day entry-level pianos either because of their national origin, their small margin for profit, their limitations vis-a-vis more expensive pianos, or their lack of a track record. Most industries realize that entry-level sales are important to the health of up-market sales. Not so in the piano industry!

Jettisoning the base of your product pyramid is a bit short-sighted.

Anybody who'd charge $1000 for a single story to single story move + tuning, should be lined up against a wall and shot.

Unless they're moving a piano from New York to L.A....