In the retail space, change is constant.
This is certainly true in the retail music industry, with many customers turning to online vendors rather than brick-and-mortar music stores — but while some stores are closing, others are staying relevant by adapting to new trends and finding ways to better serve their customers.
While some challenges are universal for all retail stores, others are especially relevant for music retailers. In this blog, we’ll identify some of the most significant challenges of owning a music store and offer practical solutions for how you can overcome them to keep your shop open for years to come.
Let’s dive in.
One of the major challenges of owning a music store in the modern business landscape is decreased foot traffic due to the rise of online retailers.
Solution: Enhance the in-store experience.
When customers choose to purchase online, their choice is usually out of convenience. Although online shopping is faster and easier, customers don’t get to hold an instrument in their hands and try it out. They also don’t get to benefit from the personalized expertise you offer. To increase foot traffic to your physical location, take steps to improve the in-store experience.
First, offer personalized recommendations to your customers and train your employees to do the same. Ask a customer questions to determine which instrument will suit them best.
You can ask questions like:
Give appropriate recommendations based on the answers to these questions.
You can also offer additional services at your music store like instrument rentals, instrument repair, and music lessons. Services like these create additional streams of income while setting your store apart from large online vendors.
As they say, “if you can’t beat them, join them.” If you’ve been selling exclusively at your physical location, try launching an online store to carve out a piece of the online music retail pie for yourself. Make sure your site is visually appealing and easy to navigate, and engage in marketing efforts on social media. You may find your online store begins to account for a significant portion of your revenue.
Related Read: Music Store Design: 8 Ways To Make Customers Feel Welcome
As a music store owner, inventory management is one of your most important tasks. Purchasing too many of one instrument or not enough of another can cause overstock or stockouts, leading to instruments that sit on your shelves or to unhappy customers that turn to competitors.
Solution: Use digital inventory management software.
Digital inventory management software simplifies this process. These tools can be found on cloud-based point of sale (POS) systems, which allow you to check your inventory totals from any web-enabled device. You can quickly check how much you have of any given item, and your totals update automatically when you place orders or make sales.
POS systems can also be used to create comprehensive reports with key metrics like cost, revenue, and profit. Use this data to make informed purchasing decisions based on customer demand. If keyboards are selling out, buy more of them. If saxophones are sitting on the shelves, you can reduce the size of your next order. This keeps inventory turning over and increases sales.
Related Read: Music Store Inventory Management Software: 7 Features & Top Providers
Like many businesses, music stores face seasonal fluctuations. Many music stores offer instrument rentals to students, meaning the back-to-school season is especially busy, while the summer can be much slower.
Solution: Adjust inventory orders based on seasonality.
The best way to manage seasonal fluctuations in sales is to plan ahead. By paying attention to trends in your sales, you can anticipate how much stock you’ll need during busy seasons versus slower seasons. If you do a lot of rentals during the back-to-school season, take a look at how many instruments you’ve rented out in the past and make sure you have more than enough instruments in good condition to take full advantage of the season.
If you find certain instruments sit on the shelves during certain times of year, you can increase your marketing efforts to promote these items to make up for the seasonal slump. Run discounts or create social media content to create an extra push that generates more interest for these items. This keeps inventory and revenue more balanced across the year.
Related Read: How To Increase Music Store Revenue (9 Year-Round Tips)
Customers have many options when it comes to buying musical instruments, including numerous online vendors. Another one of the challenges of owning a music store is building loyalty among customers so they choose your store again and again.
Solution: Set up a loyalty program.
A loyalty program incentivizes customers to make repeat visits by offering rewards for frequent purchases. These programs might be set up based on a point system, a tiered member system, or on dollars spent. After making a few purchases, a customer earns a reward, which may come in the form of a free or exclusive product, like a free guitar carrying case, or a discount on their next purchase.
These rewards encourage customers to choose your music store over competitors, including online outlets, so they can earn their reward. Make sure your loyalty system is easy to understand and simple to use, so customers can keep track of how close they are to their next reward.
Music stores often face steep overhead expenses. Between rent, utilities, inventory, employee wages, and marketing, costs can add up — which means you need to keep sales high to stay profitable.
Solution: Cut costs where you can.
High overhead costs mean you need to be efficient and thoughtful with your spending, and eliminate unnecessary expenses. Make a list of all of your expenses and determine which ones are the least essential to your business. You may decide the building you’re in is larger than you need and a smaller, more affordable location is sufficient. You can also take steps to reduce utilities, like using energy-saving lightbulbs.
You may find you’re ordering high quantities of instruments that aren’t selling well. Try reducing the size of these orders to save money. If there are instruments you’re consistently selling and tend to order a lot of, you can try to negotiate bulk discounts with suppliers to reduce your costs and increase your profit margins.
There are some core areas of your business where you shouldn’t compromise, like on the quality of your most popular instruments. If your top sellers are guitars, don’t drop your most popular brand for a lower-quality replacement. As you examine all of your expenses, you’ll recognize which costs you can cut and which are essential to the viability of your business.
Related Read: How Much Does It Cost To Start a Music Store?
It can be hard to find reliable employees who are dedicated to helping your customers. And once you have, it can be difficult to retain them. High employee turnover causes extra work for you as a business owner and decreases the quality of customer service.
Solution: Invest in your employees.
You can improve employee retention by striving to make your music store an enjoyable place to work and giving team members opportunities to grow.
Offer extensive training to each employee so they understand the instruments on your shelves. They may not be experts at each one, but understanding the basics helps them offer valuable advice and make more sales. Over time, more experience will afford them more knowledge and make them more engaged in the work.
Offering incentives also encourages longer employee retention. You may offer bonuses for employees who sell more instruments or name an employee of the month and offer a bonus or a better parking spot. If your employees are performing repairs, you can offer them commission on the repairs to encourage them to work carefully and quickly. The better experience you create for your employees, the better you can retain them and the stronger your business will be.
Your music business has great potential — but it faces a variety of challenges, too. These include competition from online music outlets, inventory concerns including seasonal fluctuation, attracting customers, high overhead costs, and retaining employees.
Overcoming challenges like these can seem overwhelming — but by finding practical solutions, you can make your music store stand out among the competition. Focus on creating a great in-store experience, plan for the future, and find the tools to help you run your store more efficiently — starting with your POS system.
Music Shop 360 is an all-in-one, cloud-based POS system designed specifically for music stores. With both general and music-specific features, you can ring up customers, manage your inventory, and set up a loyalty program, as well as offer lessons, rentals and repairs.
To see the difference Music Shop 360 makes for your store, schedule a demo today!