With consumer demand indicators picking up, participants in the music instrument industry are optimistic about higher retail sales this year, according to January survey results released recently by GE Capital, Commercial Distribution Finance (CDF), a leading provider of financing to music dealers.
Thirty-eight percent of survey respondents expect their sales to increase five to 10% this year, while 43% expect increases of 10% or more. In 2012, 26% expected sales growth of five to 10% and 54% expected growth of 10% or more.
Based on survey results, fretted instruments, percussion, keyboards and amplifiers will be the most popular category again — 44% this year versus 52% last year. Professional audio equipment will again be the second-most popular category — 37% versus 30%.
Online sales appear to be a growing component of participants’ business. More than one-quarter (27%) said online sales will comprise between 15% and 45% of their business this year, up seven percentage points from 2012. Slightly more than a third of respondents (36%) said online sales make up 15% or less of their business, down from 49% in 2012. And 17% say they do not offer online sales compared to 21% last year.
Despite the expected pick-up in consumer demand, participants in the music instrument industry are concerned about the growing popularity of online equipment sales. Forty percent of survey respondents said online retailer and auction site purchases would have the greatest impact on the music industry in 2013, up from 23% one year ago. At the same time, cutbacks in school music programs concern 19% of respondents, up from 12% in 2012. Concern about the lack of consumer demand has fallen to 18% from 43%.
“Like others in this industry, we’re optimistic about consumer demand this year,” said Dave Wilson, commercial leader of CDF’s diversified products group, which provides inventory financing for dealers of music instruments and related products. “Although wholesale purchases were soft heading into 2013, we think that will turn around now that we’re seeing positive signs in the U.S. economy. Unemployment rates are declining, consumer confidence is improving and home sales are increasing, — all of which are good news for sales of instruments and related products.”
To learn more about Musicians, check out the Audience Interests & Intent report available on the Research Store at ad-ology.com.[Source: Survey conducted by GE Capital Commercial Distribution Finance (CDF). 19 Feb. 2013. Web. 20 Feb. 2013.]