Harman Launches In-Store Displays to Highlight AKG, JBL Brands

Harman International is launching a series of in-store displays to capitalize on retailers’ renewed interest in audio, said Dave Rogers, vice president and general manager of Harman’s Americas consumer division. The marketing push behind the Harman Kardon, AKG and JBL brands comes as dealers struggle with sharp declines in TV pricing and narrowing profit margins. Harman opened a store-within-a-store format at Nebraska Furniture Mart stores in Omaha and Kansas City, Kan., to test smaller concepts that could move this year to parts of Best Buy, InMotion and Ultimate Electronics, Rogers said.

"The average selling price and margins dropped in video, and retailers are focusing more than at any time in recent years on audio because they can get back a lot of margin dollars,” Rogers said. “A lot of retailers are experiencing that crunch and we're starting to see a lot of positive signs in our audio categories.” Harman’s AV receiver business “is starting to come back for us,” he said.

The displays, in the case of InMotion and Best Buy, will feature Harman’s AKG brand Quincy Jones Signature headphones, which ship in October. The demo unit contains on-ear Q701 reference ($479) and Q401 over-the-ear ($299) headphones and an LCD screen containing information about the products, Rogers said. The headphone line, which is available in black, lime and white, also includes the Q301 in-ear model ($149). How many of InMotion’s 57 outlets will carry the headphones hasn’t been finalized, he said. In the case of Best Buy, the AKG headphones are competing for shelf space within the chain’s musical instrument departments, Rogers said. InMotion and Best Buy officials weren’t available for comment.

Harman is proposing testing the AKG display in 10 of the about 100 Best Buy stores that have musical instrument sections, Rogers said. Ultimate Electronics is getting a display for JBL MS-8 automotive signal processor that demonstrates the difference between a system with equalization and without it, Rogers said. The MS-8 features a built-in 8x20-watt amplifier and is packaged with a CD to allow for selection of cross-over points, speaker-time alignment settings and equalization to compensate for interior acoustics. Ultimate officials weren’t available for comment.

"We're trying to support all of our new product launches with something,” Rogers said. “In an ideal world I would love to have a Harman area in the store, but that would be a goal.” Full-blown store-within-a-store formats will likely be in a “narrow subsection” of Harman’s retailers, Rogers said. But “that’s why we have said ’these are some hot new categories so let’s offer these displays'” based on Harman’s deployment of a store-within-a-store format at Nebraska Furniture Mart and a prototype developed at its Northridge, Calif., offices, Rogers said. Harman has seen sales improve at Nebraska Furniture Mart since the dedicated displays were installed earlier this year.

To encourage dealers to install the displays, Harman is offering them free with a “modest” purchase of products to stock them, Rogers said. Harman has deployed a similar strategy in Europe, where it has about 400 store-within-a-store formats installed including those at Media Markt. In the spring, Harman hopes to add in the U.S. a demo unit featuring a Harman AV receiver paired with a 5.1 JBL or Infinity speaker system to demonstrate surround sound, Rogers said. “Investing in displays is a marketing expense, but it’s one that allows us to get products into key areas of the store and increase sell through,” Rogers said.

The dedicated formats, which began with iPod docking products, also follow Harman’s dropping its home audio distributors in January. Harman continues to use distributors for mobile audio. The restructuring, which cut about 70 distributors, left the home audio business in the hands of Harman sales managers and independent rep firms, Rogers said. Harman’s home audio sales declined in January and February as it shed distributors, but have since rebounded to “higher levels” than before the changes were made, Rogers said.

The change in distribution brought Harman management closer to retailers, Rogers said. The previous distance between dealers and management due to the use of distributors “impacted product development and responsiveness,” he said. The revamp also gave Harman tighter control over dealers selling its products, Rogers said. Harman is cracking down on unauthorized Internet sales, sending cease-and-desist letters to some dealers and tracing serial numbers to track down those trans-shipping product, Rogers said. “It gave us more control because we found that some of our products previously leaked to dealers that we would not sell if we controlled the relationship,” Rogers said.

To raise the profile of JBL speakers, Harman will ship the Studio 1 series in November with a baffle containing a “weave” design that simulates woven straps. The line consists of the Studio 120c center-channel speaker ($199 each), 130 book shelf ($359) and 180 ($419) and 190 ($539) floor-standing speakers. The Studio 190 floor-standing speakers add two 6.5-inch drivers in addition to a four-inch mid-range and one-inch tweeter found in the 180. Both the 180, which has one 6.5-inch driver, and the 190, are three-way speakers that handle 200 watts and deliver 8 ohms and 45Hz-22kHz frequency response.

Harman also is readying its first soundbar system under the SoundBar 16 brand. The 2x25 watts model has proprietary virtual surround sound and a 100-watt wireless 10-inch subwoofer. Harman also is delivering the HKTS 60 5.1-channel home theater speaker system that features an eight-inch 200-watt subwoofer and 35Hz-20kHz frequency system response.

On the high-end side, Harman’s Mark Levinson brand is unveiling four new power amplifiers ranging from the mono 300-watt N531H amplifier ($6,500) to the 200-watt five channel N535H ($12,000) that contains five pairs of loudspeaker binding posts and RMS power from 20 Hz to 20kHz. RMS power is the range of high to low frequencies that an amplifier can reproduce. Harman’s Lexicon brand is readying the DD-8 amplifier that delivers eight channels at 125 watts into 8 ohms. And Revel is extending its assortment of architectural in-ceiling (10 models) and in-wall (11 models) speakers. The in-wall speakers range from the W360 6.5-inch loudspeaker ($200 each) to the W990 nine-inch ($1,750). The in-ceiling models include a four-inch C540 ($250) up to the C760L three-way ($750) and eight-inch C780 ($600).