By James Chevrette
In the last five years, many retailers have been investing heavily in boutique or upscale store fronts offering incredible installations and great customer experiences. These enhanced showrooms necessarily come with higher operating costs.
Those costs must be recovered by selling higher margin products with higher labor rates. Many retailers charge $100+ an hour to make things profitable. But at some point, we must ask, are higher prices alienating customers and forcing them into the do-it-yourself, DIY, market? Before anyone gets the wrong idea, I’m not saying don’t offer higher end services. Read on…
Actually, DIY installations aren’t so “by yourself” anymore, with sites like Crutchfield, YouTube, Facebook etc. But what if a person does not want to go the DIY route? Let’s use the example of a 2008 Honda Civic or 2009 Ford Explorer (very common vehicles for the first-time car owner).
If the ‘08 Civic owner wants to upgrade their front speakers, they are quoted $199.99 for speakers and 1.5 hours labor @ $125. This equals $386.50 plus tax and shop supplies, so let’s call it $430. Is the average ‘08 Civic owner going to pay $430 for a speaker upgrade or are they going to turn to the Internet to find something cheaper?
Or, say a customer wants a subwoofer box and amplifier with installation, such as this MTX dual 12 inch amplified sub box shown on Crutchfield.
I spoke to several retailers that said they would charge for 3 hours of labor plus an amplifier wiring kit and shop supplies (10 percent) to install this. This would equal 3 hrs x $125.00 + $99.99 (amp kit) + $37.50 (shop supplies) = $512.49 plus taxes. In this example, the installation is roughly double the cost of the equipment ($279.95) for a total of $792.48.
Let me say, I don’t think this is unreasonable. But I am trying to illustrate the entry level customer experience.
Do you think this customer might try to search YouTube and DIY this package to save double the cost of equipment rather than pay $792.48 plus taxes? This first-time customer wants to put some bass in their vehicle. Are we forcing people to DIY? And what should we do about it?
We can say that is not my customer! However, there are a lot of older Honda Civics, Ford Explorers and Mazda 3s out there. Here is a list from Kelly Blue Book showing the Top 10 used vehicles under $5,000. Maybe offer an all-in-one price including installation for these types of vehicles, to get people hooked on car audio again? With the slowdown in sales since the pandemic, is it time to recapture this market?
According to Statista, R&B and Hip-Hop were the most streamed music genres in 2021 by almost double that of any other genre. That’s a lot of bass lovers out there. How can we get them in your stores?
*For reference, I reached out to a regional chain store and two top 10 retailers for rough estimates for costs and labor rates. These will vary by region.
Photo credit: James Chevrette
James Chevrette has been a territory manager for over 8 years with Trends Electronics in Canada. He has worked in an installation bay, in R&D in manufacturing, and personally trained thousands of people across Canada. Through his dealing with National accounts, regional chain stores, and relationships with brick and mortar independent retailers, he offers a unique perspective about business growth opportunities.
source: https://www.ceoutlook.com/2023/10/17/are-we-driving-people-to-diy/
