It’s no secret that the local HiFi shop is fading from our streets.
Reports indicate “big-Box” premium HiFi sales are flat or even declining.
Is this the result of decreasing consumer demand?
Given this information, does HiFi have a viable future, and can the local HiFi shop survive?
Well, the market is good …
Annual U.S. Hi-Fi audio sales exceed $5 billion and are growing at 7%.
Driven by high-resolution streaming audio services, wireless technology, a rising demand for immersive audio formats (Dolby Atmos, DTS-X, Sony 360), and traditional Hi-Fi passive floor-standing/bookshelf speakers (amplifier required), which still account for 40% of speaker sales.
Furthermore, this HiFi market includes 18 million U.S. premium streaming subscribers
(Qobuz, Tidal, Apple Music, Amazon), plus 50,000 to 150,000 core “audiophiles” willing to invest significant dollars in high-end audio gear.
… but
While these HiFi numbers are significant, they account for only 8% of audio sales.
To add perspective, mass-market audio products, such as standard Bluetooth speakers and basic earbuds, reach a market penetration exceeding 60% to 70%, or roughly 220 million consumers.
The 8% number aligns with the 18 million premium streaming subscribers and core audiophiles.
That’s all good, however …
Keep in mind, it’s the music-loving consumer who drives HiFi, not audio services or hardware.
So, who are these music-loving enthusiasts?
Gen Z & Millennials
Gen Z, roughly aged 14 to 25, and millennials, aged 31 to 45, are the dominant consumers of audio.
90% of Gen Z listen to digital audio – 42% via streaming.
76% of millennials listen to digital audio – 55% via Spotify.
Gen X & Boomers
Gen X, roughly aged 40 to 61, and Boomers 62 to 80, listen less than Gen Z and millennials.
And though Boomer smartphone usage is rising, they still rely on traditional radio.
My take so far …
The Hi-Fi market is healthy, and its future is sound.
Gen X and Boomers still have significant, dollar-filled wallets.
But Gen Z & millennials use and buy significantly more Hi-Fi audio.
But what about the local HiFi shop?
Don’t shoot me yet.
Part Two will address the local HiFi shop’s future via its target customer, product mix, pricing, promotion, place/location, and more. Part Two coming soon.
That’s it … for now.
Check out these links.
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Mikey Fremer vs Ask Paul
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