[00:00:21] Thanks for joining us today on The Music Shop podcast. We have Miles Stewart with us today from Musicians Supply in South Carolina. Thanks for joining us today, Miles.

[00:00:31] Miles: My pleasure.

[00:00:32] Eric: Now just give us a little bit of background on your store. You got a couple locations. So just give us a general background on that.

[00:00:40] Miles: Yeah. We have two independent music store locations surrounding Columbia, South Carolina. The owner of our shop got into running a music store because his family had actually owned a five and dime and then a pawn shop that transitioned to a music store in the mid 20th century, and he wanted to do it a little bit differently. So he kind of started a couple of satellite stores that eventually kind of became their own company. And that was in about 80, about 86. I actually got my first trombone from Musician Supply when I was a little kid, you know, starting sixth grade band in 1990.

[00:01:16] Eric: Wow.

[00:01:17] Miles: Yeah.

[00:01:17] Eric: So then how did it go from there? Did you work there, like when you’re in high school and then, and what’s your role at the company?

[00:01:23] Miles: Yeah. So my role started when I finished my Music Ed. degree at the University of South Carolina in 2002. Musician Supply was looking for somebody to kind of be an educational liaison, a lot of music stores focus on that. Having somebody who’s dedicated to, you know, getting to a van full of accessories and going out and picking up repairs delivering rent-to-own instruments and, you know, giving out quotes, estimates, High school band, middle school band, string teachers.

[00:01:49] So I started off doing that and after a few years of doing that, I found that I was spending a lot of time ordering a lot of the stuff. You know, if somebody wants a cymbal stand, you have to order not just one cymbal stand in your store, you don’t just call, you know, Tama or Pearl and order one cymbal stand. You have to do a whole shipment of things, you know, for the shipping distribution over each item.

[00:02:10] So I was spending a couple hours a day ordering things, and that slowly turned into me taking over ordering, well, things like all these guitar strings and reeds and keeping track of that. We used to do that all mainly just mentally. How much do you need, when do you need it? What’s the best place to order it from? So, that slowly turned into sort of a management role.

[00:02:30] Eric: So you were playing that Ed. Rep. role. So you guys do a lot with schools, repairs, and whatnot. You know, we’ve got guitar strings there. What else do you guys do at your shop or is that pretty much the whole gamut right there?

[00:02:41] Miles: So in the last five to 10 years, we’ve kind of shifted from seeing ourselves as one third rent-to-own school, band, and orchestra; one third lessons; and one third guitars, drums, sound equipment like combat stuff. We used to be pretty balanced that way. Now it’s really maybe more of a 25% repair services, helping people customize their guitars and then doing a lot more electronic repairs keyboards, amplifiers, things like that.

[00:03:09] And then still those other three things. We do private lessons in the store. We have the rent-to-own school music kind of thing. Still do a lot of that, but repair services have taken over a lot of that space.

[00:03:20] In the last year, we’ve also added in a lot more guitar parts. We were having a lot of folks come in and especially during the pandemic that wanted to tinker with their electric guitars and we would keep a few parts. I think most small music stores keep, you know, one small display. Like here’s some tremolo arms, here’s maybe just a few things they happen to have randomly put in their inventory, but we now have a whole wall, like an 18 foot floor-to-ceiling section of all kinds of guitar parts, both brand name and generic stuff that we buy from a little more direct, you know, in bulk, you know, imported, and then we have to put our own header cards on it and decide if, “oh, this isn’t what we thought it was going to be.” So those will just go and never be seen, or if it’s a really cool product, we try to keep in touch with that supplier and get more of it.

[00:04:07] So constantly changing, adding different things. If things aren’t working, that display gets smaller and smaller over a couple of years. If there’s customers asking more and more about it than the options on that display, kind of expand and take over the space kind of organically.

[00:04:24] Eric: That’s interesting. So where you finding the guitar parts, was that coming from a lot in-store, online? Like, where was that interest?

[00:04:32] Miles: Almost all walk-in customers. We do have an online presence. It’s not what we focus on. We focus on making every customer that comes in kind of feel like, the interaction they’re looking for, we try to offer it to them. So if you go into… in this part of the country, we have ACE Hardware, kind of like the smaller version of the Lowe’s or Home Depot. And I go in there and, three or four people ask me what I’m looking for and it’s kind of irritating. So, on the other hand, you can go to Lowe’s and like really need to talk to somebody and you could walk up to them and they’ll look down and speed up so that you can’t talk to them. So we try to make sure that we’re watching actual body language, not just what people are saying.

[00:05:13] You know, you can greet somebody, they come into your store, like, “Hi, how are you doing?” And they say, “oh, I’m just looking.” And sometimes I’ll actually say, “okay, well, that’s cool. What did you want to just look at while you’re in here” and actually sort of engage with them a little bit, but yeah, the guitar parts were very much people leaving disappointed.

[00:05:31] And if you leave disappointed, we feel like we’ve done something wrong because you might come in looking for DJ turntables. They have these like, digital, like pretend you have a record. We don’t sell those. We’ve never sold those. We don’t know anything about them, but I’ll recommend another couple of businesses in town that might know more about them than we do.

[00:05:48] So I don’t think they sell them over there, but you can go to, you know, make up a store name, you know, something pro audio down the street. They might be able to tell you more about that. So trying to have that actual conversation with them, they might not actually need a DJ turntable.

[00:06:03] They might just need a headphone adapter because they lost theirs, but they start the conversation with, “I’m just looking” and then you get into the next part of the conversation, which is,

[00:06:13] “Well, do you know anything about DJ turntables?”

[00:06:16] “No, not really. Okay. Well, there’s a place down there that could tell you about them, but what’s going on with it?”

[00:06:22] “Well, I just need the headphone adapter for it.”

[00:06:24] “Okay. Well, I have those on display. Do you want to pick that up while you’re here?”

[00:06:27] And if you don’t watch for those body language cues, and kind of hear between the lines, then you lose your $4 sale on the headphone adapter every time.

[00:06:37] So yeah, people leaving disappointed, they come in wanting,” Ah, I really just wanted to see if you had, you know, this little part that goes on the bridge for my Fender Strat.” If we have something to offer, they might be disappointed if it’s not exactly what it is cause you can’t have everything. It’s just not possible. But if you can show them a couple of viable choices, it might be too expensive, that might not be the right color, but at least to be like, well, that’s pretty cool. You at least had an option for me. So, that’s what we’ve been focusing with that.

[00:07:02] Eric: So the way that you guys were able to gauge on this customer leaving disappointed was you had actually had to engage in the conversation

[00:07:10] Miles: Yeah. You got to find out what they were actually hoping was gonna happen? It does not usually what people say, and, I’m probably the same way when I go into a store. I try not to do that because I’m usually on the side of the counter instead of the other side. But yeah, try to say what I’m actually looking for when I a store.

[00:07:26] Eric: So, let’s talk a little bit logistically about that. Roughly what’s the footprint of your store and how many people do you have work in the floor, salespeople, at a time to you feel like strike that good balance of where there’s enough people to help.

[00:07:39] Miles: Yeah, I think our showroom here in this store, I forget the square footage, 5,000 square feet or something like that, is the showroom. And then we have two pretty large storage areas with kind of low style, you know, eight foot long steel shelving for backstock and any given time, we try to make sure there’s two people that know what they’re doing in the showroom.

[00:08:02] Now one of those people might be me and I might be working on the computer and the other person might be kind of my, you know, younger protege that does a lot of guitar stuff and also does some, you know, choosing of what to reorder and whatnot. We might both be working, but we’re both in the showroom.

[00:08:16] Sometimes, you know, throughout the day in a retail situation, most people that are, you know, employed during the day are not gonna be able to come by during the day, unless it’s their lunch break or something. So, full staff here at our main store is, you know, gonna usually sometimes be the owner in his office and then maybe three full-time people, sometimes a part-time.

[00:08:39] It’s pretty common to have somebody who is kind of transitioning from a salesperson to a drum instructor or from a, you know, really teaching guitar and that’s okay but I don’t really like it. I feel like I’m much more useful over here actually working on instruments instead of working on people one-on-one like that. So, and that’s where some of our part-time staff will come from.

[00:09:00] Eric: Okay, so it sounds like your teachers, then, are part of the staff there. It’s not something that you guys just give them the space there at the store.

[00:09:09] Miles: Yeah, some music stores do it like, I think the barbershop kind of thing, where you rent the space for a monthly fee. We’re a little more hands-on. We actually will keep our teachers’ schedules in the computer. We usually use a Google calendar and we do the billing and the payment, records, and everything for them. So the idea for our teachers is they can just pull up their calendar on their phone and be like, this is who I’m teaching today, this is their names and they just do it and they don’t have to think about any business stuff. That’s always been our preference. I know there are a lot of different philosophies on how to do private lessons and it can be a real problem with some families that are doing lessons because they are not going to be as laid back. And then some families are real laid back. They’re like, “oh, well, something happened with the scheduling. We’ll just see you next week. That’s cool.” Almost to the point where it’s creepy, like aren’t you upset? Something went wrong. You should be very upset right now.

[00:09:59] And then some families, you know, cause me to have that mental reaction that, “oh gosh, something went wrong. This is going to be horrible.” But that lesson part, I mean, like I said, it’s a good 25% of what we do. And a lot of our regular customers who maybe take guitar lessons 10 years ago now, they’ve finished school. They have a nice full-time job. Maybe their kids are needing something for band and orchestra, or maybe they want to get their first really nice guitar that they could never afford when they are a teenager.

[00:10:24] So, we’re, once again, not too focused on the random sale that we get from out of state. That happens and it’s cool, especially on maybe bigger ticket items that aren’t selling locally, like we’ve had some guitar… you know, any music stores is gonna tell you if they’re being honest, they’ve got guitars that have been on display for four years, five years, and nobody wants it in town. So it’s good to have that ability to say, like, well, somebody has been searching for this. They might be in Louisiana. They might be in Utah. They’re not at our town, apparently because they haven’t come into buy it.

[00:10:56] Eric: Now you talk, I mean, you’ve talked about a few things that, that, I think, play a role into this, but building your guys as a local brand, I mean, you’ve highlighted, you know, having that customer interaction and things like that. You guys have been around for a long time. How have you guys really differentiated yourselves from, and continue to build out brand and differentiate yourselves, from the big players in the space? You know, these, the Amazons, the, you know, the Guitar Centers and things liken that?

[00:11:21] Miles: Sure. On one hand, it seems a little bit like the other local independent stores and there’s a few, a couple few in town. It’s almost like us against them, against Sweetwater, Musician’s Friend, Guitar Center. What I usually hear from people when they come into the store, this could just be them being polite, but they usually go out of their way to offer, “it’s so much nicer to shop for a guitars here than Guitar Center.” Now Guitar Center’s got guitar in the name, but our local one, I guess it’s not like one of the flagship locations. That’s a smaller Guitar Center and usually you go in there and you can’t actually hear, like you’re trying to try out an acoustic guitar, but there’s people just playing everything. It’s super loud. I don’t know if you guys have Guitar Centers or similar things in your own towns, but it’s not easy. If you’re a serious customer, it’s not a place to go. If you’re a casual window shopper that wants to touch, you want to not touch with your eyes, but touch with your hands, it’s a pretty cool experience to go to a Guitar Center, but most people find that as far as like the chain brick and mortar experience, there’s a lot lacking in the Guitar Centers, a lot of stuff in there, but if you’re actually trying to pick something out, it can be a little frustrating if you’re listening.

[00:12:33] As far as the online space, that’s really why you’ve got to have a website. We have a solution for that, and it’s not so much that we want the website so that we’re selling out of state, you know, you know, 10, 20, 30 orders a day. That’s not happening on our site, but I do see some local customers finding that they remembered that we’re an option. You know, they were thinking about getting their first guitar for, you know, their oldest kid or youngest kid, whatever and, you know, we actually come up as one of the options. If you just Google, you know, shopping for a guitar, you know, whatever brand you think is cool. But we do show up as an option and local stores that can’t figure that out because the people making their decisions are over a certain age or not motivated enough to try to figure that out. Those stores are closing. Sometimes like the last couple of years, closing a little bit faster.

[00:13:28] We have a friend in another town in South Carolina who we’ve actually done some buying partnership things with, like if he heard about a deal on acoustic guitar cases, but you know, he’s got to buy all 200 of them, but 200 acoustic guitar cases is way too many. There’s nowhere for him to even store them. Like we might partner up and do things like that with him. But um, he’s an older guy and he sold his building and went into a smaller store just to kind of keep a few things going for the next few years. But yeah, if you’re not listing things out… they’re not really to compete with Sweetwater musician’s friend, but just to remind your local customers that they don’t have to skip you, they can at least consider going to see what you have in stock and having that experience instead of just, you know, picking a picture and getting that in whenever it shows up.

[00:14:15] Eric: So you’re finding that people are finding your products online, the local people, so, that’s bringing them into the store?

[00:14:19] Miles: Yeah, that’s how I shop for anything. If I need brake pads for my wife’s car, I don’t just go to the store. I go to the website first and then I go there. I don’t know if everybody thinks exactly the way I do. But I think, you know, there’s lots of different kinds of people. There’s people that don’t know what they want to look for. There’s people that I think probably are a little more like me that want to be fully informed, even on a $20 or $30 purchase. I want to be fully informed how what I’ve chosen stacks up against the other choices I could have made. And everybody has that online, you know?

[00:14:49] So I don’t expect people to often just show up at the local brick and mortar music store not knowing anything about what they want and then making a purchase. I mean, yeah, sure, people walk in all the time, but those people don’t usually make a purchase unless they’re already educated themselves as much as they think they need to.

[00:16:09] Eric: So you guys have used the Rain System to tie your in-store inventory and your website inventory, and for years now. Have you noticed an uptick in any, I guess, references to the web or web sales or anything like that just over the past couple of years? Or have you guys noticed that it’s just, it stayed steady. What’s been your guys’ experience with that?

[00:16:29] Miles: We’ve probably more in the “stayed steady” or uptaked a little bit by having the advantage of it, but I don’t think that’s where we would be without using Rain. We would definitely be one of those stores that’s kind of, just sorta open, but not really producing the kind of cashflow you need to keep purchasing going and keep, you know, your loyal customers, your return customers would start to get sort of disenchanted pretty quickly when there’s nothing new going on and that’s probably where I’m guessing we would be if we hadn’t have upgraded to a point of sale system that would give us at least that little bit of web presence to remain a viable option.

[00:17:06] It’s not just the website, like I was saying earlier, we do a lot of different, you know, expansions in different directions. Like right now we have a lot of expensive cymbals and a few years ago we didn’t have a lot of expensive cymbals. And in fact that kind of dovetails into a cool thing that Rain will do sometimes. They’ll have somebody walk in and say, “I think you have this in stock.” And I’ll be like, “that doesn’t look familiar to me.” And I look over in the showroom. We have some tall symbol displays and that cymbals is not there, but it’s one of the 20 we have in the back because there was no room to display it. So it’s still on display even when you’re physically out of square footage to make your display look right.

[00:17:42] If you’ve done at least a minimal amount of work to make your product data look right in some sort of, you know, web based point of sale, you’re showing all the stuff you actually have bought and not just the stuff you got around to putting on display.

[00:17:55] Eric: Yeah I love that example and hearing that. I know a lot of other stores, they consider this jump to having a software automate a lot of these things for them as a big thing. From the time that you guys implemented, you know, a web point of sale integrated software that just made things easy, you guys are multi-location. How long do you feel like it took for you guys to feel comfortable with that transition? And just, you know, you understand the new system, you feel like you’ve got your processes figured out, cause I know that’s a concern I hear across the industry of just switching systems and switching softwares to do different parts of your business. That’s a major challenge.

[00:18:30] Miles: It is a challenge for sure. There were a few moving parts and Rain that weren’t quite there yet. So that was probably the biggest challenge.

[00:18:38] Eric: And you guys implemented… how many years ago was that?

[00:18:41] Miles: 2016, March of 2016.

[00:18:44] Eric: Quite awhile ago.

[00:18:45] Miles: A couple of few, a couple of few years ago. And so yeah, a lot of those things are still getting fleshed out really nicely. So working with schools and bigger churches, they’re going to have a system where you’re expected to have a written quote, get approval from the institution, deliver and send an invoice that matches that other paperwork. And some of that was to be built and it is built now and it works great.

[00:19:10] But besides some of those things, when it was just the idea of having everybody on staff from the youngest person, which actually probably happens faster than the oldest person, which probably happens slower, to get used to actually thinking in terms of, if I sell something, there has to be a transaction that actually has it all in there. And to do that, that product or service has to actually be in the computer to kind of have that full circle understanding with everybody. It probably took six or 12 months and that’s not counting myself working, you know, weekends sometimes and stuff trying to get the data that we did have to migrate in.

[00:19:48] Our transition was worse than a lot of people, because we were going from a pretty limited point of sale system before we used Rain and we had two separate. Location one, location two have two different accounts, two different inventories, but the migration guys kind of stepped in and help that mash together a lot better than I could have on my own. And they were even willing to try to teach me some advanced spreadsheet, almost not coding, but spreadsheet, manipulation, stuff that I didn’t know about, that it was impossible.

[00:20:20] And I was like, ” I don’t know how to do that.” And they’re like, “okay, well just send it to us and we’ll do the best we can.” And then I still had to comb through it and the initial migration. So that process took some time. But once you start seeing the magic of all the moving parts falling into place, the way they’re supposed to, it’s to me, it’s totally worth it.

[00:20:39] I might geek out a little too much on point of sale capabilities, but one of the coolest things is when we finally started doing re-strings on guitars, real common music store service product, putting new tires on a bike at the bike shop, that you know, and seeing the fact that we consume that could set a guitar strings and we do the service. And when you sell it, the count goes down correctly and assigns, you know, what the person bought at that time. It just seeing the seamless completion of not having to go back and manually say, “well we did a repair and we wrote that on a piece of paper. And we wrote on the piece of paper that we used some strings,” but when you ring it up, the human then would have to remember to, you know, type in the repair and the point of sale system, and then ring up the strings. “Well, which strings did you use?” “I don’t know. I threw the package away. I forgot to write it down. So I don’t know which set of strings we used,” and now your count is off, but with doing the products and services all on one ticket within Rain, you can throw the package of strings away. It doesn’t matter. It’s already recorded as soon as you put it in there.

[00:21:37] Eric: Yeah, well that’s great feedback to hear and especially with how things have changed over the last few years. And that’s how we see it. I mean, software can solve a lot of problems, a lot of just human error that all of us make. So that’s great to hear some real, in store examples of those things that you guys have seen. Now you’ve alluded to this in certain ways, but I’m curious if you had to pick starting a music retail store right now, what would your focus be if you had to pick one: in-store or online? And why?

[00:22:06] Miles: So, in-store versus online, if you were starting now, is the question?

[00:22:10] Eric: And you had to pick one that, hey, this is what I’m going to, this is what I’m going to go with.

[00:22:14] Miles: I’ve got to say that if you had some startup capital and you aren’t already branching off in. established music store business in a town, you would probably start, not finished, but you’d probably start by trying to do just internet because of the cost of space, the cost of having a retail space that people are going to actually respect. Most music stores are in pretty lower rent retail areas. But if you had yourself and a couple of full-time-ish people to help you really make a website look good, you could start with there. But I don’t think that’s the whole thing. Like once you had some cash flow going, you would want a physical place because there’s a ton of revenue to be made with services, and not just repairs, but just the idea that there’s a destination that customers can go to and just talk things over.

[00:23:06] Like I was saying, we don’t like people to leave, physically leave the store disappointed. So they might come in just looking for free advice. I try to give it to them if they made the effort to drive down here and they want to say like, “well, I was thinking about doing this or this. I don’t know what’s wrong with it.” That conversation can often turn into where they just want to pay us to do it. And that’s fine if they want to fix it on their own, but I’ve given them some advice on what they should be worried about or not worried about. That’s fine too. So there’s a certain amount of well, I don’t think he can do that with, you know, chat with us now that you’re missing out on if you only do websites, but just because of the cost of retail space, it’d be hard to get all the inventory you need and get a retail space you need. But if you could start with a website, that’s probably what I would do. Not because I liked it, but because that’s what you would have to do.

[00:23:55] Eric: Yep. I love the insight on that. I think you bring up some good points there. So you’ve talked about how brick and mortar can differentiate themselves. So let’s look at over the next five years. Somebody who’s asking you for advice. “Hey, I’ve got a brick and mortar store. Over the next five years, I want to be in a really good spot.” What would your advice to that person be? What’s the one or two things that they could focus on to make their store awesome, within the next five years with how, just the landscape is changing and all that.

[00:24:27] Miles: I think that one of the main things that has been for decades and will still be really important is rent-to-own, getting every year a new season, a new crop, a new generation of parents and students that you’re helping get their first trumpet, their first flute. You can partner with companies, so like if you don’t have the pocket book to spend $300,000 on new instruments every year, there’s several really good corporate partners you can do that will help you do that rent to own thing and on a commission basis.

[00:24:55] And then you have to have a couple of people on staff that know what they’re doing with repairs. The expertise that other musicians in town, whether they’re public school teachers or they teach music at a church, private school, or they’re just guys that play guitar, you know, on the weekends to make a couple extra hundred dollars, they will know, they might not even talk to each other, but each one will figure out pretty quickly when they come in and ask a question. And it’s not that every person on your staff has to be an expert, but they need to feel like there’s somebody at the location that they know by first name, that when they walk in and say, “I’m having a trouble with this, what is to me a mysterious thing.” And I can look them in the eye and say, “That’s not mysterious. I understand your problem.” If you don’t have a couple of those people on staff, that’s going to be really tough because everyone will come once to your store. Just once.

[00:25:45] So you gotta make sure you’re doing whatever you can to get some competitive presence with rent to own stuff, and whether or not you’re focused on only band, whether you do band and orchestra, whether you kind of dabble in that but you’re really a guitar store… there are stores that just sell drums, like in bigger cities like Atlanta, there’s stores that just sell drum kits and drum accessories. So if you’re focused on that, that’s fine too.

[00:26:08] But you have to hold onto those people that are, I guess, the career music store guys people get weirded out really quickly when they come in and they only see your part-time person who is probably a good kid, but they’re, you know, 17 and they always don’t make the best impression. They’re trying but you have to make sure that the people walk in and say, “Hey, is Steve here? Hey, is Miles there?” And if you have somebody who’s starting to get that sort of level, like there’s a younger guy that works here that’s been here a few years and people come in and they actually skip over me. They need their guitar adjusted, but I’m working on the computer and they’re like, “Hey is that. Jeremy kid here? The kid with the long hair?” And I’m like, “Yeah. he’s back there. I’m busy. Go talk to him.”

[00:26:50] So those are a couple of the things. You got to have the band and orchestra going and you gotta make sure that people are coming in asking for certain staff members by name.

[00:26:59] Eric: Yeah, that’s great feedback cause both of those, you tie it back to customers, getting new customers, customer retention and I wonder if, all stores think of rentals like that, that you’re getting the next generation. But you also talk about having an expert in the shop that allows you to keep people coming back. So that’s great feedback.

[00:27:16] Now Miles, thanks for joining us today on the podcast. This has been great. Loved hearing your take on things, how you guys are solving problems in your business. Thanks so much for taking the time to join us today.

[00:27:27] Miles: Yeah, you’re welcome.