Dan Ferrisi, writing for the Music & Sound Retailer:
The Music & Sound Retailer has been made aware of major news from Fender Musical Instruments Corp., the iconic brand located in Scottsdale AZ. The Retailer has learned that, although no specific timetable has been established, the company is preparing plans to sell its “Fender” brand products direct. This development was first announced the week of August 4 when Fender held a two-day business meeting with key North American dealers at the Fender Visitor Center in Corona CA. The company’s Interim CEO, Scott Gilbertson, and other members of the executive management team discussed the company’s strategic initiatives, which are intended to elevate the Fender brand.
[…]
The company announced it is building capabilities to offer its full product catalog through its Web site, calling this change an effort to meet the demands and desires of the modern consumer. Fender also announced a series of digital initiatives focused on enhancing the dealer’s customer relationship-management capabilities and sales-effectiveness tools.
If true, this is a really interesting and surprising turn for Fender. As more and more guitar buyers buy online, the brick and mortar dealers are getting squeezed out.
But, if the majority of people no longer need to play a guitar before purchasing it, I can see why Fender would like to cut out the middle man and increase their bottom line. That being said, they have to walk a fine line not to alienate the dealers they do have. The brick and mortar stores are going to have a hard time competing.
The article also includes this comment from interim CEO Scott Gilbertson:
“By investing in digital capabilities and elevating our consumer experience around our brand, products and services, we expect to drive increased engagement, emotional affiliation and consumer demand,” said Gilbertson. “We believe our strategy will accrue significant benefits across all aspects of our dealer base.”
If that doesn’t inspire you to pick up a guitar and make music and art, I don’t know what will!
wow. This is big news. I wonder how much the supposedly “rocky” relationship Fender is having with our friends in the big box dealer world (read: Guitar Center) has to do with Fender going direct? I heard at one time, if not still, that Fender was GC’s biggest creditor and that Fender was exposed big-time by GC not paying on time. I know my local GC inventory (at least by way of what I can see when I walk in) is way down and there is less and less Fender stuff laying around. Since there really isn’t another big box retailer to take the GC production inventory (that has no doubt piled up in Fender warehouses), seems very logical to me that Fender will now sell direct.
Another irony of this announcement is that had Fender kept to its original roots, selling wise (as in only selling direct, as Leo did back in the earliest, pre-Kauffman days), there would likely be no Fender as we know it today. Their early-days dealer network worked essentially in partnership with Fender to get their product out as broadly as possible.
Great post, as always, Josh. Keep ’em coming.
Well, here’s a dealer’s perspective…
We had been a Fender dealer for many years. We are not the Squier starter pack type dealer, we used to carry MIM and US instruments and tube amps. That wasn’t good enough for FMIC, they insisted we carry mediocre products like their acoustics and live sound. We said no, so they dropped us.
Now that they are going direct, I’m glad we walked away. How do you know if you like jumbo frets or Noiseless pickups unless you try them – at a dealer? But I’m not going to play showroom to FMIC’s web site.
Our value to the customer is independent advice and cross-vendor comparison shopping. FMIC doesn’t want you to see competing products or hear our advice.
If you are certain you know exactly what you want, go to fender.com. If you want to keep your options open and maybe learn something, visit a good dealer.
By the way, we sell at the same prices as GC and the Internet guys…
Thanks for sharing your perspective, Carl. It’s interesting to hear the other side of the story.
Our Fender rep. use to be our least aggressive salesman. When he retired, Fender hired my sales manager as their salesman for this territory, who eventually became a regional manager. My point in telling you this is that we really didn’t feel a pressure from Fender until this last year. We decided to go along with their demands to carry more expensive merchandise since there would not be as much local competition, and since GT was selling in a more competitive price range. Fender has assurred me that since they will still only be open 8 hours a day, and selling at MAP, this move shouldn’t be a problem. I go back to the days when CBS and McMillian (and later Best Buy) decided to get in the music business. I think it’s important that the remaining Fender dealers not over-react.