A Bullish Bet On The Future Of Brick & Mortar

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Our good friend Brian Majeski of the Music Trades magazine has kindly let us share this brilliant article which explores a music business who feel very optimistic about the future of their brick-and-mortar store…

Five Star Guitars’ new showroom is designed to offer an “experience” that gets customers off the couch and into the store. Partner Jeremie Murfin says, “The pendulum is swinging back to good brick-and-mortar stores.”

If brick-and-mortar retail is dead, Jeremie Murfin, Geoff Metts, and Johnpaul Simonet, the three partners who own Five Star Guitars in Beaverton, Oregon, apparently didn’t get the message.
Last year, the trio invested in a larger store, designed from the ground up, that replaced two smaller locations. Why did they do it? Partly for efficiency reasons: the new store provided much needed warehousing space, allowed for better and more efficient workflow, and was in a better location just off the heavily trafficked Northwest Sunset Highway. But more importantly it is a reflection of their confidence in the future of traditional retail.
As Murfin declares, “The pendulum is definitely swinging back towards good brick and mortar retail.” Noting that approximately ten stores and former competitors in the greater Portland market have closed in the past decade, he adds, “We’re finding a lot of customers who still want to see and hear products before they buy.”

Fewer brick-and-mortar competitors may have created an opening, but capitalizing on it requires creating an in-store experience sufficiently compelling to get potential customers to put down the tablet and come down and try a guitar

For the partners at Five Star, the experience that draws customers involves a combination of distinctive inventory, good merchandising, knowledgeable salespeople, a regular schedule of in store events, and a strong lesson program.
As Murfin puts it, “A store has to be more than just a catalogue on a wall.” Five Star’s in-store experience starts with a selection of unique products that aren’t readily found online or in chain stores.

Its inventory is heavily weighted towards special-run Fender guitars and amps, and one-off Tom Anderson or PRS guitars. Metts says the distinctive products avoid “treating instruments like commodities.” They also attract customers and turn faster than the stock models readily found online.“Unique and unusual instruments make customers want to visit the store,” he adds. “They get excited about a Geddy Lee bass they’ve never seen or heard of before, or a special edition 64 Deluxe Reverb.”

As important as the inventory is the presentation. Five Star’s guitar techs make sure that every instrument is in perfect playing condition, not just in tune, before it’s put on display. “Customers buying expensive guitars expect it,” says Murfin. “But we do it on lower-priced instruments as well. It costs money to pay the luthier, but if you want to create a musician, it’s worth the investment. If you’re a beginner with an unplayable guitar, you think it’s your fault and you quit. If you have a playable guitar, you see success and you stick with it.”

The new store has also been outfitted with fixtures that, according to Murfin, “show instruments in the best light possible.” There’s a quiet room where customers can sample acoustics, and a “loud room” that provides space for cranking up a selection of Fender or Mesa Boogie amps. Most recently, Five Star built out a Fender-branded “Store Within A Store” that showcases a carefully selected offering of premium Fender guitars and amps. Add to that a very knowledgeable staff, says Murfin, and the total experience “makes for a family-friendly hub for the local music community.”

Although the Five Star partners are at heart, traditional retailers, the internet is critical to their operations. On their website, customers can browse through the inventory, viewing in-store produced images of every guitar and amp. There are no stock, manufacturer-supplied images, because according to Metts, “it turns the guitars into commodities.” The well-designed website generates some online sales, but more importantly, drives store traffic. “Customers want to see what you have in stock before they visit,” he adds.

Five Star has also strategically acquired local Google search words, allowing the store to show up on the first page of a Portland area customer’s search without having to match promotional budgets of national giants such as Amazon or Sweetwater.

Facebook and Instagram have evolved  into important promotional vehicles. On an almost daily basis, Five Star posts quirky images of the staff, customers, and new products that Murfin says “tell people who we are.”
The postings present the store as a fun place to visit, filled with staff and customers enthusiastically sampling instruments and accessories.
We stress that you don’t have to be a great musician to be comfortable here,” he says.

A lesson program that draws more than 250 students a week provides a regular flow of store traffic and keeps younger players engaged in their instruments. A staff of 11 teachers provides instruction on fretted instruments, percussion, keyboards, and vocals. At regularly scheduled “gig nights,” they rent a local venue and put students together in bands, where they can perform for friends and family.
Murfin explains, “Playing live with other musicians is a million times more fun than playing along with a CD for the 300th time at home. Giving a kid that opportunity is the best way to get them hooked so they’ll become a life-long musician.”

Regularly staged in-store events are another key ingredient in the promotional mix. Rather than simply offering discount prices to a “sales weary” customer base, the events address a wide range of topics of interest to musicians. Recent events have included a PRS clinic featuring Periphery guitarist Mark Holcomb discussing his playing technique; a technical discussion on different woods and construction methods by Breedlove guitar product specialists; and an introduction to gypsy jazz presented by a local musician and Five Star music teacher.
The events are streamed on Facebook to reach beyond the 50 or so who usually show up at the store. Murfin says that even for people who don’t attend, seeing the events on Facebook “present Five Star as a place where there’s always something interesting going on.”

After working at Five Star Guitars for several years, Murfin, Metts, and Simonet teamed up to buy the business from founder Ken Potter in 2012. They downplayed the transition at the time, because, as Murfin says, “Ken had built a good business and had a lot of trust in the community. Nothing was broken, so we didn’t see any reason to make a big deal about it.”

The three partners had at various times performed every job in the store, but initially struggled after taking on ownership. “We were really green,” relates Murfin. “Managing a storefront is not the same as running a business. We had to learn about managing cash, balancing our inventory, dealing with landlords, and setting employee policies.” For guidance, they enrolled in a small business development programme at nearby Portland Community College.

One of the first lessons they learned was to divide responsibilities. Murfin took over finances and budgeting; Metts became the chief operating officer, handling sales training, IT, and inventory control; and Simonet became the “public face” of the company, directing marketing efforts.

Courses on marketing, financial management, and store design helped the trio refine their strategies and generate consistent double-digit sales gains. Murfin says, “We’d sit through the classes, take the lessons home, apply them to the business, and then come back a few weeks later and report our results. We sort of became a case study for the whole class.”

Their success attracted the attention of the U.S. Small Business Association Oregon office, and in 2016, they were named Oregon Small Business of the Year, besting 90,000 other entrants.

The prestigious SBA award raise Five Star’s local profile, but the partners are anticipating even bigger gains from their new location. Inventory in a single location, a more efficient receiving area, and an in-store photo studio have dramatically raised productivity. The added space and improved display fixtures have also enhanced the customer experience.

Murfin concludes, “The opportunity to see great gear, talk to someone who knows what’s going on and what’s going to be released next, and to hang with other musicians—it’s something that Amazon or a smart phone app can’t deliver. That’s why we’re optimistic about our business.”