Nimble diversification has always been a key trait of the successful PC retailer. To stay competitive, you’ve got to align your product offering with demand and trends, and those that do it best can find themselves with new lucrative lines of revenue.
Impulse buying trends have their place in this – like fidget spinners. A flash in the pan for sure, but everyone and their dog was stocking them at one point last year. But you have to sell an awful lot of novelty trinkets to pay the rent.
If you’re thinking of diversification on a more strategic level, you also want to keep it within the realms of what you’re known for. There’s no doubt there’s money to be made in selling gluten free artisan kale smoothies – but it might look a bit odd next to the graphics card display case.
The audio market however slots in nicely with the core PC business. You may already be stocking audio in some capacity, maybe the odd basic PC speaker or headset. But diving deeper into the various niches of this sector could bring in a new revenue streams through different customers. And since your existing customers are bound to want some form of audio set up with their new PC, why send them elsewhere?
“PC retailers are extremely well placed to sell audio. Due to the emergence and rising ownership of portable mobile devices such as smartphones and tablet PCs, the boundary between audio/consumer electronics and PC products is becoming increasingly blurred. In order to meet the demands of the modern consumer, many PC retailers are moving away from stocking just the traditional standalone PC and diversifying into the instore repair of phone and tablet screens,” says Ben Jones, senior product manager at Hama UK.
“This creates the perfect opportunity to make add-on sales by offering relevant audio accessories, such as wireless speakers and headphones, that can be paired with these devices in addition to most Bluetooth or WiFi-enabled PCs and laptops instore.”
Gary Brown, director of Digitek Trading, adds: “With the rise of Bluetooth speakers and headphones, these items have become multifunctional and can be used with not only mobile phones and smart TVs but increasingly with laptops and desktops, so they are a must-have item for PC retailers. Speakers, headphones and earphones are all essential lines to have in your store.”
Know your audience
If you’re already involved in the gaming market, be it through consoles, monster PC gaming rigs, controllers, or software, having a good stock of gaming audio equipment is a no-brainer. And this is where some of the higher margin items sit. If a customer has just dropped £3,000 on a brand new system to play Total War: Warhammer at the highest resolution and frame rate possible, they’re not going to want to run the audio through some tinny speakers. This is a key thing to consider when putting together gaming bundles.
“Thanks to the rise of esports, chat functions like Discord and TeamSpeak, and people playing in teams both at home and in gaming venues/events, headsets are definitely the key audio product right now,” says Sean Cleaver, marketing specialist – technical PR at Asus.
“One of the most popular games in the world, Fortnite, is best played with a headset so you can hear everything around you when playing. It’s arguably the biggest product area for audio in PC gaming. If you think about it, PC retailers are probably at the forefront of audio products with computing and have been for a long time. Sound cards and big speaker systems have become on-board audio chips on motherboards and headsets, but these are all still a big part of PC retail.”
It’s important to tailor your selection so that it crosses over with your core trade. And if it’s not the latest and greatest gaming-based set ups that fit with your business, it’s important to research which lines offer the best margin and the most stable RRPs.
“Knowing your demographic is key. For instance, there’s no point in stocking a range of gaming headphones if your current target audience are mostly businesses,” says Brown.
“That said you have the advantage over the online retailers because customers can come into your shop and listen to headphones and speakers. Do your research and search out the brands which stick to RRPs. That way you will be able to maximise your margins. I would say headphones are possibly the best margin makers. The home audio market is very lucrative, but by far the biggest margin makers often overlooked by PC retailers are cables. Jack, phono, optical and HDMI should all be stocked in store.”
Jones adds: “Speakers, with their high price points, often look the most profitable for retailers out of the current portfolio of audio products on the market, but it is typically headphones which hold the greatest margin. These are often a lower risk product for those retailers initially branching out into audio, as they tend to turnover quickly and can be easily placed in more space- conscious stores.”
Stay on trend
The concept of virtual reality has been floating around for decades in various forms and with varying success, but there’s a real fervour to this current push by the tech giants to get it into the homes of the mainstream. Some of the best home offerings are based around a powerful PC – and if you’re going to all the bother of creating an immersive visual experience, it would be a shame to skimp on the sound quality. If you are selling PCs capable of VR, there can be crossover in sales of high-end audio.
“There is already some crossover that we see with ASUS and Republic of Gamers products especially,” explains Cleaver. “Virtual Reality is best experienced with headsets. Bluetooth compatibility also allows headset users to connect to their smartphones. So there are plenty of tech areas that benefit from audio.”
The smart home – that other great tech trend that has been banded about for years – seems to also be coming into its own now as technology catches up with concept. The sector has been trailblazed by systems such as Amazon’s Alexa and Google’s Home Hub. PC stores are bound to be involved in the hardware side of this, and there could be opportunities for bolt-on audio sales as well.
“‘Connected’ and ‘multi-room’ are huge buzzwords in the audio industry this year, with many of the latest speaker releases now enabled for music streaming across a home WiFi network in addition to at least some degree of voice control functionality,” says Jones. “Therefore, not only are PC retailers able to tie in audio sales with those of home networking kits and hardware, but also alongside those of ‘smart’ devices such as wireless security systems to aid consumers in creating the ultimate connected home environment.”
As with all tech segments that evolve and adapt quickly in line with trickle down innovation from the giant manufacturers and consumer buying patterns, keeping an eye on what’s on the horizon is key if you are thinking of moving into audio. So, what’s the next big thing going to be in these market segments?
“Smart speakers are a huge growth area, not just a speaker but a gateway to your smart home,” says Brown. “Audio brands are also adding Hi- Resolution audio to their ranges, not just in their speakers but in headphones and music players.”
Jones adds: “With convenience and portability in big demand, smartwatches and wearable computers/tech are inevitably the next thing on the agenda. How long before we see an Alexa watch for example?
“It won’t be long before we are able to control and stream our music through multi-room audio systems with a simple voice command to the wrist. And it’s voice control that we are likely to see dominate, not only in terms of the audio industry, but across the entire consumer electronics and PC sector,” says Jones.
“Its exponential growth is predicted to continue well into 2019, with many audio products, including our own, geared to incorporate this new technology as a major selling point.”
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