It’s not news to anyone that business as usual in a post-COVID world won’t be exactly the same. With everyone stuck in their homes, Hi-Fi and home electronics companies have been able to capitalize; with many reporting record sales numbers in 2020/21. Some 18 months into the pandemic, we are noticing the next product cycle of new products is either delayed or more expensive.
On this week’s “A British Audiophile’s” (ABA) Podcast #5, I talk with Tarun about what we’ve seen transpire in both the U.S. and U.K. during COVID. Although some companies are better positioned than others, we are witnessing a trifecta of issues going forward – chip/parts shortages, slower and more expensive shipping, and inflation.
What does this mean for you?
Harder to find products that will be much more expensive. We’ve gone through some of the price sheets of brands that audiophiles tend to favor and expect to pay more — perhaps as much as 20% more in Q1 2022.
Before recording our podcast, we reached out to some industry press representatives and manufacturers for an update on how the pandemic and aforementioned issues are impacting their business.
For Andover Audio specifically, our business has been strong throughout the pandemic. We have had good success selling through our online store in conjunction with our dealer partners, who have balanced both brick-and-mortar sales with strong online presence—Gramophone, World Wide Stereo, Listen Up, and Crutchfield, to name a few.
Throughout the industry, brick-and-mortar retailers likely took the biggest hits—some were forced to close, while others had to innovate, relying on new approaches to in-person business. Many dealers that adopted and/or enhanced hybrid models are thriving.
Another key industry struggle has been the significant increase in container rates coupled with tariffs. Because we can’t pass on the full devastating impact of this to consumers as higher prices, manufacturers are taking the hit on their bottom lines. At this point, this seems to be far worse than the impact of the COVID-19 pandemic.Peter Wellikoff, Interim CEO Andover Audio
Supply chain issues have really, really negatively impacted some companies’ ability to deliver products, especially ones sourced from Asia. Also, the fact that factories couldn’t operate at full capacity with workers staying at home.
Many audio companies have experienced a boom in demand for their products. I’ve especially seen this in the musical instrument industry. I’ve purchased three major items this year and all were on back order for anywhere from a week to about three months.
I think audio shows will be booming when they come back in full force, which I think will be around the time of AXPONA (April 22-24, 202)
I am seeing a huge reader interest in everything related to computer audio and streaming. Maybe not a surprise there, but it is certainly something that more and more people are getting into.Frank Doris / Pubic Relations
Most critically, HiFi manufacturers that make digital products (DACs, CD players, Streamers, etc.) have been suffering from the chip shortage that has impacted everything from automobiles to appliances. But the flipside of the equation is that with more people spending time at home, demand for new systems and system upgrades is up. So many HiFi dealers as well as smart home manufacturers and system installers (even the car stereo guys and gals) have all been pretty busy. Also, home infrastructure upgrades have been in high demand to accommodate more time spent by more people in the residence, so systems such as Wi-Fi, home security, home office and home learning are all vital. Sometimes, these utilitarian systems are integrated to include HiFi as well. Micah Sheveloff, WIRC Media
Personally, as others note, the pandemic had a positive impact on audio sales. I have six clients in the audio market; all saw significant increases in interest and sales. Home and personal audio were big sellers, right up there with bikes, computers, and exercise equipment.
What goes up must come down, or at the very least level off. Right now, we’re seeing an adjustment to more predictable buying patterns. After a year of massive indulgence on the part of the market, it’s safe to say that many consumers are satisfied, saving money, or some combination thereof.
Looking ahead, the challenge is maintaining a steady flow of new product introductions and sticking to a realistic delivery schedule. For a variety of reasons, slowdowns will be with us for a while, perhaps into Q2. Adam Sohmer, Sohmer Associates, LLC
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