The Good Guys Move To Premium Audio But They Have To Get It Right Say Industry Execs – channelnews

The move by The Good Guys to at least “trial the sale of premium audio” is a toe in the water exercise for the mass retailer, with observers claiming that if they get the model right it could be a major revenue earner, as consumers invest in streaming and home entertainment on larger screens.

The big question is whether they are serious, with several premium audio and entertainment suppliers who are currently working with specialist audio channel dealers keen to work with The Good Guys to get the model right.

“We are chaffing at the bit to do business with them,” says one major supplier of premium audio products.

Last year the JB Hi-Fi-owned business started ranging premium German-made Loewe TVs and this year premium Devialet audio products at their Brighton Victoria store.

One thing TGG stores have is space, and to get better yield from a new generation of entertainment products they sell, insiders are telling ChannelNews there is a “massive opening” for the JB Hi-Fi-owned business to start ranging premium products.

In the US, Best Buy has been selling premium audio and entertainment products, along with service and custom install offering under the Magnolia brand for a decade.The Good Guys Move To Premium Audio But They Have To Get It Right Say Industry Execs – channelnews

Late last year the business eliminated the Magnolia name and simply moved to using Premium Products and Premium Audio and TV as key point of difference from their traditional ranging of mass entertainment products.

Among the brands being offered are premium Harman Kardon speakers, Denon and Marantz, Rel Sonance and premium Sony projectors and TVs, along with premium LG and Samsung TVs.

There is even in-ceiling speakers, sub woofers and premium sound bars.

The big question is whether these are true premium products or “Affordable Premium” products that are allowing Best Buy to improve their profit margin, while also offering a custom install service, to a market that wants more than an average TV or integrated audio offering.

Perception is key and what the Premium Products tag is doing is creating the perception that there are “better” products available at a higher price than the mass of entertainment products ranged at Best Buy stores.

Recently we asked consumers whether they would shop at The Good Guys for a premium product. The answer was overwhelmingly yes, especially when it came to appliances.

Buy when you ask them about buying premium entertainment, audio, and the possibility of a custom install solution, they become confused.

“I didn’t know The Good Guys sold premium audio,” “I would if they sold these products,” were just some of the answers.

The big difference at the Best Buy stores we visited this month in the US was noticeable.

The people selling premium audio were experienced and knew their stuff. They were different from the jocks selling products off the shelves.

At The Good Guys Brighton store the same people selling the run of the mill entertainment are also having to sell the premium products, which industry executives claim will not work, as a $5,000 Devialet speaker or $4,000 soundbar needs to be demonstrated in a different environment.

According to The Good Guys CEO Biag Capasso, the mass retailer is open to growing a premium business model in select stores. At this stage he admits it’s a case of trial and error and working out which model is right.

According to Chris Scott, General Manager at Aqipa, the supplier of the Devialet products being ranged at The Good Guys, he is open to working closer with TGG, even to the point of sharing or paying for the right person to demonstrate a premium audio product.

“100 per cent we would. It’s important that a product such as Devialet is demonstrated and explained properly, and that takes time and training.”

According to one senior executive at a global brand already selling product at Best Buy, the opportunity for The Good Guys is enormous.

Talking at CES the executive said, “CE and audio retailing is changing. It’s become a lot more mature, and consumers will pay for a premium product today, and above all a custom install solution. They will also pay for extended warranty and support. Entertainment in the home has grown off the back of larger TV screens, better quality display and a move to people wanting a better entertainment solution in their homes, including audio and automation.

“We have had a lot of success with Best Buys, and we see no reason why the premium products model would not work in Australia. One thing that you need is space and what Best Buy has done is move to creating a better experience environment in their stores.”

The new Best Buy retail model consists of select “Premium experience stores”.

[Interdyn Brand – Devialet]

These stores feature immersive demo areas, premium experiences for audio, home theatre, and luxury appliances and dedicated areas highlighting new categories, including premium audio and entertainment products including audio, electric transportation, health and fitness, and outdoor living.

Best Buy started testing the new format in Houston in 2020 and later expanded to other markets, where it’s tinkered with various store sizes much smaller than the average 3,530 square-metre stores.

Now, more than 40 existing Best Buy locations across the US have been remodelled and reintroduced with the “experience store” design.

Best Buy’s executive vice president of omnichannel, Damien Harmon, says, “We wanted to give our customers the ultimate destination to discover and get expert advice on the latest in tech. For some technology, the best way to know if it’s the right fit is to see it in person and get that immersive and inspirational experience.”

According to Paul Riachi, the CEO of Indi Imports, the staff at The Good Guys who sell agency products such as Miele and Gaggenau are better skilled to sell premium TVs and audio.

“WE want to move out of the TV section into the white goods area where staff are selling agency white goods as they are not chasing cheap deals. They can sell a $6,000 Loewe TV vs a $500 Falcon TV in the TV area.”

Another industry executive says, “The Good Guys grew up on cheap, cheap, cheap, and this mentality is not going to help them sell premium products. They have to invest in the right people to sell premium.”

ChannelNews understands that one major retailer (Not Harvey Norman) has been moving staff out to brands to be trained in how to sell premium products. The person who told us is under an NDA.

They claim the retailer is investing heavily in selling a range of premium products.

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