by Jeremy J. Glowacki
“Nothing is more important right now for small, independent AV specialists than the relationship they have with their vendors,” noted David Wexler, co-owner of veteran specialty retailer/custom integrator The Little Guys in Mokena, IL. “If you’re not smart in the way you pick your partners right now, you’re in big trouble.”
Wexler spoke from experience, having been chosen, recently, to build the first of what could be as many as 60 Lenbrook turnkey high-resolution digital audio demo rooms across the country.
The concept, called i Fi Zone, has been championed by Lenbrook America president and CEO Dean Miller who was tasked with expanding a program originally envisioned by his team before he joined Lenbrook in early 2011. The company was looking for a way to help dealers showcase the capabilities of high-resolution audio versus basic MP3 downloads and, of course, sell more complementary Lenbrook gear, like DACs, digital media tuners, iPod docks, and speakers in the process.
Lenbrook America's first i Fi Zone is featured in a dedicated room within the specialty retail store for The Little Guys, in Mokena, IL.
“The concept was to establish a showroom to demonstrate how people were using computers to obtain their music, store their music, or transport their music with the most common applications, while also encouraging dealers to really embrace the iTunes ecology,” Miller explained. “I believe there are now more iTunes accounts than there are people in the United States, so all dealers had been selling some form of these products already, but it hadn’t been brought together in one category until now.”
The keys to success for specialty dealers always have been on adding value by educating customers on the benefits of AV products through highly differentiated stores and mixes of products. Miller wanted to bring that model up to date with a focus on a category that was already popular with consumers. After convening a panel of experts, it was Miller’s hypothesis that while a lot of people were, in fact, already downloading “lots of music,” they didn’t know much about taking advantage of enhancements like high resolution.
Late last year, a store design from ImageCrafters was approved and work began building the first room in a previously undeveloped space at The Little Guys’ new location, 20 miles south of Chicago. From the beginning, dealers had suggested that the showrooms should look very similar and have the same areas or zones or applications, so that they could benchmark the productivity of one zone in one store vs. the same zone in another location.
“Owners David and Evie Wexler were really excited about the concept, and we knew they had an empty showroom that they hadn’t used yet, so they were the perfect place to start with our first beta site,” Miller said.
The i Fi Zone at The Little Guys has been open since November, with two more locations already in the works for Baltimore-based Gramophone and Denver-based Listen Up. Another “half dozen” dealers have indicated they want to move forward immediately with their own showrooms this summer, according to Miller.
“We’re going to be building and developing an entire community around these showrooms, and one aspect of that would be a micro-website and direct mail and store locator with unique URLs for each dealer,” Miller added.
Lenbrook America president and CEO Dean Miller hopes to build an entire community of dealer services around the i Fi Zone concept.
Each showroom, which can be built and installed in three to four weeks, requires a dedicated space of around 450 square feet to accommodate up to six zones of technology. An investment of approximately $25,000 is required from each dealer interested in installing an i Fi Zone. “For the dealer, it is their building, so they can take that investment and amortize and depreciate it over time,” Miller pointed out.
And participating vendors, mainly Lenbrook, but also other partners, such as Panamax/Furman, Lutron, Pakedge, and Control4, are also offering aggressive demo product programs and marketing support to help get the showrooms built.
The rooms are designed so that a customer could guide themselves through the high-resolution digital music creation and playbook experience, but dealers like The Little Guys will probably prefer to keep the tour more one-on-one.
Within the i Fi Zone, there are up to four different high-definition flat-panel TVs on the back wall to provide information about what is happening at each “station,” and to explain the basics of computer audio, what various codecs are available, what certain terms mean. First, however, a customer is asked to sit at a cloud-shaped table, where he or she is asked questions to qualify their knowledge of computers and digital audio downloading.
“What we’re finding, by and large, is that most people don’t understand the differences between codecs or compression or lossless or high-resolution music, and they don’t have any idea that they can make a file that can out-perform the compact disc,” Miller said.
At the “cloud table,” is an Elo TouchSystems computer monitor, like those used on CNN for weather and elections coverage, where a sales person can move things in and out of the screen and even diagram a customer’s house. From there the customer is led to one of the other five zones, where they learn about how to upgrade the performance of their system. Having always been impressed by experience-oriented stores like “My Gifted Child” in Toronto, and the American Girl stores throughout the country, Miller made sure to include a station designed to help customers create their own high-resolution music file, which is given to them on a jump drive branded with the dealer’s logo, before they leave.
At The Little Guys, Wexler’s sales team controls its i Fi Zone systems via an iPad or a universal remote, so they can introduce the idea of their home automation expertise as well. “We have some Lutron blinds that can go up and down, to show the other things that we can do,” Evie Wexler noted. “We like the iPad because it’s big and easy and allows you to show them that you never have to go near a computer to play your digital music. You have to have computers in the room because that’s the reality of the process, but we like to emphasize that the music we’re playing is actually coming from a different room.”
Wexler’s team starts off by demonstrating a song that has been downloaded via iTunes or J-River straight out of the speaker on a laptop computer. Underwhelmed by that audio performance, the customer is shown an upgrade to powered desktop computer speakers and subs that are connected via Audioquest cables. Then for further comparison, the salesperson connects an NAD DAC to a Mac Mini and begins transmitting a wireless signal to small NAD speakers in the room. This, David Wexler said, leaves most customers “completely blown away. “Then you tell them that these speakers are $300 a pair and this amplifier is $399, and the DAC is $299. For $999 you have this amazing sound and that’s what you’ve been living without for all this time,” he stated.
Wexler, who also demonstrates headphones, as well as PSB speakers, Sonos systems, B&W docks, Squeezebox streaming technology, and Peachtree DACs, in his i Fi Zone, said the key is focusing on premium products at all times. “Everything is higher quality and better performance,” he said. “We don’t use any stock power cords, stock HDMI cables, stock USB cables, or stock Ethernet cables. It establishes our expertise. It eliminates the discussion about specific brands and prices and products. It’s more about getting an end result. And, nobody leaves without buying something from us.”
For example, The Little Guys recently had a customer walk in to buy a 32-inch television that maybe would have provided the store $33 in profit. Before he left, however, the salesperson said, “By the way I see you have an iPhone; where do you store your music?” The customer answered, ‘In my phone,’ to which the salesperson replied, “You have a computer; your music is stored on your computer.” That started a conversation, which led to a sale of the 32-inch TV, plus a DAC, a Sonos system, and about $450 in cables and wires.
“That’s not $30,000 and it’s not a whole custom house, but that’s huge for us,” Wexler said. “That’s the kind of thing that’s going to happen over and over again.”
But, Wexler admitted, it couldn’t have been done without the help of his vendor partners, most notably Lenbrook. “We needed their plan and design and concepts,” he said. “And without the vendors all pitching in to help pull this together with products, we couldn’t have afforded to do it. Lenbrook came around just at the right time for us. Anyone who doesn’t align themselves with these guys is making a big mistake.”
Miller, noting the difficulty of the past three or four years, said that vendors and specialty dealers need new solutions that offer a “sunrise” business opportunity. “The old business that everyone was involved in was definitely a sunset business,” he explained. “We’re excited that this may in fact be a solution for moving ahead in the future.”