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EXCLUSIVE: Bose Axes Specialist Dealers

Struggling US audio Company Bose who last year closed down 119 stores has now moved to axe specialists who made the brand famous.

The Company has told audio dealers in New Zealand that they will stop supplying independent dealers in NZ from 31st March 2022.

There is also speculation that the Company will also axe Australian dealers as the bulk of their sales now going through JB Hi Fi, The Good Guys and Harvey Norman.

Bose have had a love hate relationship with specialist dealers who at one stage were told that they had to spend $25,000 to install new Bose instore merchandising displays.

Some simply walked away from the Company who has struggled in the network audio market, they have also seen Sonos strip share away from the Company who recently moved to market sunglasses with a built-in audio capability.

The Bose sunglasses have struggled to sell with some dealers discount the glasses out to shift stock.

We are still waiting for comment from Bose.

In late 2019 the business announced that they would close all 119 of its retail stores in North America, Europe, Japan, and Australia.

The move by Bose was in response to the growing trend among customers to shop online for its audio products such as speakers and headphones.

Bose has also been caught out undercutting specialist retailers after it became evident that e-commerce was fast replacing the sales in traditional retail stores during COVID-19 lockdowns.

Industry observers have questioned whether customers would opt for online purchases without ‘experiencing’ the Bose products in stores especially those that shop at specialist dealers.

Over a period, it started selling them even through specialist retail stores as well as Apple stores.

They then cut a deal with JB Hi Fi that heralded their association with mass retailers in Australia and New Zealand.

Bose ventured into online sales through its own website in 1999 and today they push as many sales as possible through their direct channels.

With a combination of its own stores, online selling, and third-party retail stores, Bose was still struggling to counter competitors such as Bowers & Wilkins, Sonos and Harman who own JBL and Harman Kardon

It ventured into the omni-channel retail model later on, encompassing all channel sales including social media to promote its products.

With online sales showing increasing potential and the closing down of a number of retail stores in 2019 due to the changing preferences and buying behaviour of millennials, Bose decided to shut down its stores and go in for the online-only model.

The advent of voice activated speakers from Amazon and Google further increased the competition for the company.

Apple had also emerged as a major competitor with its Totally Wireless Headsets (TWS), which were extremely popular among millennials.

Bose’s competitors, such as Samsung and Sony, already had flagship stores in the US, and JBL and Harman had flagship stores on Madison Avenue in New York. In 2019, Sonos launched its first flagship store in Manhattan, US, with private listening rooms, this has since been closed down.

Debapratim Purkayastha Research lead at IBS Case Research Centre said, “It remains to be seen how the strategic move by Bose to change its channel strategy would impact its sales performance and also whether customers would continue to purchase its products online”.

“Even though e-commerce was fast replacing sales in the traditional retail store, would the customers go in for the online purchase without ‘experiencing’ the Bose products in person?”

He added “In the last few years, we have seen how traditional brick-and-mortar retail chains like (JB Hi Fi) are increasing their presence online, while online retail giants such as Amazon are getting into physical retail. Developing omni-channel retail capabilities is being increasingly viewed as a solution in the fast-changing retail industry.

 

 

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