Participants in the music instrument industry are optimistic about growing sales in 2012 even as they acknowledge that consumer demand has been muted in recent years, according to survey results released today by GE Capital, Commercial Distribution Finance (CDF).
Thirty-one percent of respondents said they expect their company's overall sales to grow 10%-15% this year, while 26% expect sales to increase 5%-10%. Twenty-three percent predicted sales would soar 15% or more.
When asked which trend will have the greatest impact on the music industry in 2012, 43% of respondents said lack of consumer demand. That concern was followed by the growing popularity of online retailer and auction site purchasing, cited by 23%.
The most popular products this year are expected to be fretted instruments, percussion, keyboards and amps, cited by 52%, followed by professional audio, cited by 30%. Pianos came in fourth (13%), and then band and orchestra instruments (5%).
When asked what percentage of their business will be composed of online sales in the year ahead, 54% of dealers said they could account for as much as 15% of their business. Another 14% said online sales could account for 15%-30% of their business. Twenty percent indicated they didn’t offer online sales at all.
“In the year ahead, we believe that the increasing accessibility of online instrument sales – combined with a gradually improving economic climate – will play a significant role in the ongoing renewal of this industry,” said Marvin M. Solomon, president of CDF’s Strategic Industries Group, which finances music instrument dealers. “We hope to see continued innovation at the dealer level and exciting product developments, as well, which will also drive consumer interest.”
GE Capital’s CDF business provides inventory financing that allows dealers to stock and market a wide variety of music instruments and related products from manufacturers. Inventory financing, also known as floorplan financing, is an important element of a successful dealer business model.
The Music Instrument Industry Survey of 77 respondents was conducted Jan. 19-20, 2012. Respondents included manufacturers (16%), distributors (12%) and dealers (45%).
To support the industry and to help restore and revitalize music education in U.S. public schools, CDF made a donation to Little Kids Rock, which brings free instruments and instruction to more than 80,000 students in underserved schools across the country. During the recent National Association of Music Merchants (NAMM) convention in Anaheim, CA, CDF sponsored performances by Little Kids Rock students from two of the 80 Los Angeles-area schools that benefit from the program. Instruments for the performances were provided by Roland Corporation U.S.
CDF has been involved with Little Kids Rock since 2008. GE’s support for community organizations comes in three forms: Financial support, volunteer efforts and intellectual capital.
For more information, go to littlekidsrock.org/.
About GE Capital, Commercial Distribution Finance
GE Capital, Commercial Distribution Finance provided nearly $32 billion in financing for more than 30,000 manufacturers, dealers and distributors across North America in 2011. Programs include inventory and accounts receivable financing, asset-based lending, private label financing, collateral management, e-commerce services and related financial products. For more information, visit americas.gecapital.com or follow company news via Twitter (@GEInventoryFin).
GE Capital offers consumers and businesses around the globe an array of financial products and services. For more information, visit gecapital.com or follow company news via Twitter (@GECapital).
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Lisa Tibbitts, GE Capital, Americas
P: +1 203-956-4582 / +1 203-803-6142 (mobile) - E: lisa.tibbitts[.]ge.com.