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February 13, 2019 02:00 PM

2018 Japanese Music Products Retail Market Survey

Not a few economists have revealed negative views for Japan’s general economy in 2019. Japanese economy has grown from December 2012 to present, the longest 6 years and 2 months beating the previous record after the World War II from Feb. 2002 to February 2008. Despite the positive forecast of the Government that the trend will continue through to 2019, it’s not fully felt by ordinary citizens.
The world economy may be affected by the ongoing trade conflicts between U.S. and China, and thus impact Japan’s export. The worldwide stock market downfall last year end casts dark clouds over future global economy.

Japan Music Trades carried out an annual music retail market survey sending a questionnaire to 149 music stores throughout the country. A total of 107 stores, which were fewer than previous year, responded. We appreciate very much the cooperation of the music retailers kindly helped us to depict the present climate of music products retail market.

28% of the retailers reported that their 2018 sales went up, while 49% replied decline and 23% commented no change. It tells that more than 70% of the retailers felt the market was soft last year.

Looking the sales trend by product category, only grand piano showed a good performance. Sales went down for almost all product categories including upright pianos, digital pianos, electronic organs, woodwind instruments, electric guitars, printed music and music books, and music teaching studio operation for young children. There was no change in sales of brass instruments, violin family instruments, acoustic guitars, ukuleles, amps, effect devices, acoustic and digital drums, other percussion instruments, keyboard synthesizers, electronic keyboards, digital devices, DTM/DAW-related products, recording & PA equipment, accessories and music teaching studio operation for adults. Ukuleles had kept excellent sales growth for past years, but stalled last year.

Music retailers anticipate flat sales of all these products except for woodwind and brass instruments, and music teaching studio operation for adults which they expect good performance in 2019.

It’s a common understanding for music dealers that consumption tax hike to 10% from present 8% slated this coming October will bring the industry extra buying rush, but impact with significant sales dip thereafter.

Japanese government is also promoting cashless payment in the society. While digital payment helps reduce aggravating payment in cash, it costs music dealers additional expenditure for installation of terminals and commission fee.

Music retailers are also concerned about preference of consumer spending from buying to subscription style. Product rental service is quickly expanding. People are shifting to rent or share goods whatever they need. Domestic share for sharing economy is expected to double in 2020 from 28.5 billion yen in 2015 to 60 million yen level. Young consumers are more inclined to buying used goods or sharing products with others. They have different cognition for owing products themselves.

Yamaha launched Sound Rent system, a musical instrument rental service in 2003, however, it still shares only a small portion of total businesses. The industry may tap a new market promoting leasing and rental services of musical instruments.

How music retailers can compete with net dealers and mass merchandisers?
“I believe promoting ourselves as a full service provider from sales of music gears to education and maintenance services makes us differentiate from outside competitors.”
Masatoshi Matsu’ura, Sanritsu Gakki, Miyagi Pref.

“There are not many ways that a small, local music store can cope with. We just meet requirements of our loyal customers who understand how we can serve them. Probably it’s no longer a time we can expect great sales.”
Noriko Saito, Saito Gakki, Hokkaido

“One idea is to educate customers that every acoustic musical instrument has its own characteristics and they can select instruments matched to their feeling by playing instruments themselves at us. Volume sales at lowest possible price no longer fit in Japanese market today. We are trying to be a professional music store providing customers with technical services and educational seminars to win their confidence.”
Mitsuhiro Sekiya, Sankyo Gakki, Hokkaido

“Consumers can get as much information as they want from different sources today. There are no ways we can change the trend. We can’t compete with net dealers when the listed products are inexpensive and maintenance-free. Mass merchants have their advantage as they are largely located in busy shopping streets, which generate good store traffic. We just hope them to have the notion that the products they sell are gears to make music, but not simply commodities.”
Akihisa Kunii, Kawai Sendai Store, Miyagi Pref.

“No one can resist the present stream of the market. All we can do is to intensify our strength as music store which means to train our sales staff to be a real professional, the explicit reason that the customers buy from us.”
Kaita Nose, T. Kurosawa & Co., Ltd., Tokyo

“Information you can get on SNS can be false in many cases these days, and people are increasingly aware of this. We keep our strategy that we are the source of trustworthy and valuable information.”
Yoshiaki Kamagaki, Shinkyo Gakki, Hyogo Pref.

“We tell our customers risks of buying music products on the net taking every opportunity, educating people that to buy such delicate musical instruments on the net simply for price is incorrect, and they and their children can get maintenance services after the purchase only from music stores with qualified staff.”
Isamu Kodama, Kodama Gakki, Nagano Pref.

“It’s good that consumers have wider choices when they buy musical instruments, but some net dealers just destroy the market with heavy discounting. We have customers who believe in their extremely low price. It’s not easy to have them understand the need of after-sales services and who provides them with that services. We expect that the suppliers evaluate the services we provide for customers, and take positive steps to compensate good retailers with more favorable inventory purchase or withhold dealership with under-serviced retailers.”
Kenichi Suemasu, Klostermusic, Gunma Pref.

“The suppliers can stop selling products to net dealers and mass merchandisers as they can expect volume sales. As long as the industry as a whole continues huge discounting, we will never win the battle, keep loosing profit, and are not afford to promoting music making and increasing lifetime music makers. On the other hand, we understand that we can’t do anything to revising present consumer buying pattern.”
Yasuyuki Matsuishi, Matsuishi Gakki, Aichi Pref.

“We find no effective solutions in terms of selling price-sensitive products, but probably the best answer is to have characteristic and original products not found in our competitors, and added value. All in all, personality of sales staff makes difference.”
Kazuma Ebata, Elm Gakki, Hokkaido

“People who buy on-line visit roadside store at least once to check the instrument themselves before making a decision. Any mass merchandisers don’t necessarily have professional sales staff. Friendly communication at music teaching studios and well-trained professional sales staff with expertise will be our asset in doing business.”
Masayuki Tadokoro, Ikebukuro Gakki, Tokyo

“We advise our customers that the best way to buy musical instrument is to visit their near-by friendly and reliable music store. They get maximum satisfaction in the end. Since musical instruments is played for long, we provide our customers with meticulous consultation services, expertise and quality services.”
Kazuhisa Ikeda, Misuzu Gakki, Nagano Pref.

“Net dealers and mass merchandisers have their strong points, rich products selection and convenient location, so to speak. We are required to improve our weakness to compete with them. We can only cope with Amazon by regularly organizing fun to experience musical events that they can’t provide.”
Eijiro Takahashi, Nakazen Gakki, Aichi Pref.

“Musical instruments are largely hobby items. I tell our sales staff that only music store can communicate and make customers feel pleasure of music making directly.”
Tomio Katayama, Umeda Nakai Gakki, Osaka

“We don’t blame customers who buy music gears on line as it’s a standard means of shopping today. We do our business in our society serving needs of local musicians keeping good communication with them. I believe it’s our advantage.”
Masakatsu Yaguchi, Fun Music Systems, Akita Pref.

“It’s natural that consumers prefer net shopping and there’s no reason to complain. But they will learn in no time risks of shopping online, such as the instruments they purchased were different from what they conceived, product failures, inappropriate tuning, etc. Our trained professional sales staff gives customers technical advice. We also provide them with full maintenance and repair services, rental studios, recording experience and a concert hall. We expect those unique facilities and capabilities will be appreciated by our customers.”
Tatsuki Mouda, Miyachi Gakki, Tokyo

“We will see more sales on the net in the near future, but we don’t want to do business in the same field as them.”
Atsushi Hyodo, Hyodo Gakki, Shizuoka Pref.

“Fine after-sales services are indispensable for musical instruments. We plan to upgrade our repair/maintenance division so that our customers can count on our services. We hope to serve every musician with best conceivable performing conditions. Current practice that manufacturers sell products at Amazon platform directly will devastate music retail network in Japan.”
Name withheld by request.

“The largest problem is that the manufacturers sell their products at low price to net dealers and mass merchandisers bypassing distributors and authorized dealers. Ordinary music dealers are disappointed with heavy discounting and lost interest in handling mass-marketed products including digital pianos. The most effective means to cope with this is not to distribute low-priced maintenance-free musical instruments. Music stores can survive and maintain profit with enhanced repair/maintenance services, and serve the needs of small circle of loyal customers, and broaden customer base by words of mouth in the society.”
Name withheld by request.

“Pleasure of making music is created by collaboration of musicians and music stores. Net dealers and mass merchandisers have no interest in creating music. Music market will demise as long as the manufacturers and distributors rely their distribution channel on net dealers and mass merchandisers.”
Name withheld by request.

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