Three Days in Anaheim

Innovation to Drive Consumer Adoption and Growth

Our Commercial & Consumer Technology team recently spent three days in Anaheim attending the best music show ever—the NAMM Show! In their meetings with key executives, they heard several stressing the need for the industry to continue to adopt innovative solutions to make music and technology accessible for all to drive participation. Andy Mooney, Fender’s new CEO, said that 90% of new instruments are abandoned within 12 months of purchase, creating a massive opportunity to drive lifelong participation and engagement with innovation. Other executives commented that they were exploring software and hardware solutions to help promote ongoing usage for products and expand the universe of enthusiast consumers.

Omni-Channel Commerce

Technology brands and retailers also recognized the critical importance of driving consumer engagement across all retail channels. This is especially important given the continued restructuring at retail giant Guitar Center, and the uncertainty surrounding its future. In order for small independent retailers to remain successful, we think they will need to offer experiences not available in an eCommerce format, such as lessons, community engagement, and high-touch customer service. We’re also seeing manufacturers and brands partnering with independent brick-and-mortar retailers to offer unique online services, such as product customization and digital sheet music.

Expanding Product Lines to Drive Sales Growth

As mature product categories experience slowing growth, executives are turning to product line additions and extensions in order to drive sales. One example is InMusic’s launch of its MARQ lighting business, comprised of DJ and stage lighting solutions. By targeting a pricing tier void in the market and capitalizing on its broad sales and distribution network, InMusic hopes to increase sales with its increased portfolio of solutions for customers. We expect larger companies to continue this trend and explore how far their brands, “know-how,” and customer relationships will take them.

Generational Shift in Management

We spoke with several entrepreneur owner-operators who are exploring their next career steps. After decades of hard work, some owners are ready to transition leadership or explore sale or recapitalization transactions to transition ownership. As these industry veterans explore options, they will create opportunities for an eager and energetic crop of new talent to take the helm. This dynamic will create additional M&A activity in the sector and fuel consolidation.

Keep on jamming!