Q&A: Bob Fuchs, Manager Of The Electric Fetus
Today’s music industry is an ever-evolving animal, one that is tremendously challenging to stay in tune with. Yet, as the majority of listeners are choosing digital or streaming services, there’s a growing niche of vinyl record buyers. According to Nielsen, the global rating service that monitors media and purchase preferences, vinyl sales are reaching record heights. In 2014, Americans bought 9.2 million vinyl albums—a more than 50 percent increase from the year before—which is significant compared to the roughly 1 million sold in 2007.
Bob Fuchs, the retail and music manager for both Minneapolis and Duluth’s Electric Fetus locations, has witnessed this throwback trend’s revival firsthand. Since 1968, arguably the heyday of record purchasing, his store has been a Minnesota music mainstay, even garnishing the appreciation of Ringo Starr who wore an Electric Fetus shirt to the 2010 Grammys. Fuchs breaks down how an indie business like Electric Fetus has adjusted to change, along with his plans to keep his business healthy and vibrant.
What trends or changes in sales have you noticed in your stores?
BF: In the last three years, we’ve seen a huge move toward vinyl in the music department. Our gift section has been really strong consistently—for decades, literally. The music section, though, has really changed a lot. I mean, twenty-some years ago, you saw the decline of LPs and rise of CDs where the store was almost completely CDs and DVDs. But now we’re seeing that completely peel back and we’re adding more record bins and converting bins back from CD bins to LP bins. The store is almost split now—probably about 40/60, LPs to CDs, whereas 15 years ago it was about 98 percent CDs. Compact discs are still a strong part of our business. We actually sell more than we do in vinyl in any given month, but it is changing pretty rapidly. The demographic for vinyl is increasing. Now, it has been a 100 percent increase in the last two years and, probably in the last eight years, we’ve seen about a 700 percent increase—about the same time Record Store Day started.
A growing number of retailers, including places like Target, are selling vinyl records in the Twin Cities. As a small business, how do you differentiate yourself?
BF: A number of things. First off, you need to have the product people want. I don’t think there is any six-month period where the store remains static; the setup is always shifting. Then there is acquiring used product that is really desirable, having sales, specials, and events in the store, of course. In-store events are huge, but I still believe the core of retail is customer service. Nowadays, social media plays a big part for events and ticket giveaways. We did do a couple of turntable tutorial sessions and I think it’s time for another one. There are so many more people who are getting into vinyl who don’t know how a turntable works. But they’ve been collecting vinyl and as they use our tables I see that they don’t know how to use one or they have lots of questions. They grew up with digital, not this technology, and for those of use who are 50-plus, we grew up with it.
So are you making more profit from CDs or LPs?
BF: There’s a little bit more margin on the front end of vinyl, but it’s also non-returnable—we buy it, we own it. If we don’t sell it, it’s marked down or given away. And then there are the returns that come back because they are defective—you eat most of those. The margins are a little bit better than CDs, but with CDs you get a return allowance and with LPs you do not. So, generally speaking: if you buy ten copies of something and sell eight but can’t sell the other two—well, you didn’t do so well. When you don’t sell something, it eats into those margins pretty quickly.
Do you see a lot of overlap: people buying CDs and LPs? Or is it mostly one or the other?
BF: There are still a decent number of people who buy both. It isn’t the majority, but I still see quite a few. Vinyl is so hot right now though, and there are so many new people getting into it—particularly those under 30. In the mid-90s to early 2000s, you couldn’t get many things on vinyl. People who maybe would have chosen to buy it on vinyl back in those days didn’t have the choice. There are people in their 40s, 50s and 60s who grew up listening to records that were forced to go digital or convert to CDs. A lot of those people, our former regulars, have now come back into the fold, but most of the resurgence was driven initially, five or six years ago, by disc jockeys and the indie rock crowd. The introduction of [national] Record Store Day was also very influential. At first I was reluctant to admit that had a lot to do with it. [But after seeing a news item from that day on CNN’s ticker], I said, “You’ve got to be kidding me.” It’s now in the national consciousness.
Record Store Day, that once-a-year event to grab limited-run music from artists, really packs the stores with fans. How much of your annual income does it bring in? Does it have any impact on your bottom line?
BF: It’s far less than five percent (of the revenue). Unlike the month of December where you’re doing triple business, Record Store Day is just six or seven times a normal Saturday. It’ll be the biggest day of the year by far, trumping the last Saturday before Christmas. The day almost becomes a festival with food trucks out back, ten different bands showing up and it makes for a great month. It’s a really nice spike that helps for a few weeks, so financially it’s an important day in the spring because some big bills roll in afterward. Luckily, it continues to be the biggest single day we’ve ever had in the store’s history.
How do you keep your pulse on customer needs and current trends?
BF: I mean, we have sales reports we look at, but it comes down to being involved eight to ten hours a day, having conversations with customers, seeing what they buy and responding to their requests and purchases. When you’re here every day, it seems as plain as the hand in front of my face.
Lastly, with the closing of the St. Cloud store the previous year, will you be looking to re-expand the Electric Fetus brand?
BF: Probably not. The reason we closed the St. Cloud store was because there weren’t consistent revenues in that town to make it profitable—we were losing money eight months out of twelve. The unfortunate part was, when we put out the press release, the minute we announced we were closing business almost tripled. What it allowed us to do, though, is concentrate our efforts and focus on the Duluth store and Minneapolis store. Both of those stores have now seen increases since the minute we closed St. Cloud. It became obvious we were stretched pretty thin. Since the advent in digital sales from iTunes and Amazon, we’ve seen a near 50 percent decrease in sales since the year 2000. We’ve had to run much tighter and leaner, but cutting St. Cloud allowed us to scale back to a more manageable state.