Music Maker Goes E-Commerce
Music Maker Music store president Tony Leonard goes e-commerce in the midst of a changing industry By Daniel Mutter Originally published in the Feb/Mar 2010 issue of 850 Business Magazine
Since the early 1960s, Playground Music has been providing products, lessons and instrument repairs to band students across Okaloosa County. But as the times and technology have changed, so has this small business, which opened its doors to innovative e-commerce and created business connections across the globe.
Founded in 1961, Playground Music grew from the passion of Choctawhatchee High School band director James Leonard.
“The area was a small community at the time and he didn’t have a source for his students to get small goods, primarily,” says son Tony Leonard, 59, the president of Playground Music. James Leonard opened the first store in 1961 in Fort Walton Beach, eventually moving to Fort Walton Square, where the company headquarters still sits today.
As the demands of the business grew, James Leonard finally had to retire after serving 19 years as band director to run Playground Music full time. The company became a family affair, with all four of his children working in the store.
In 1972, son Tony graduated from the University of Florida with a degree in music education and directing. He went to work for Playground Music full time and eventually rose to president of the company in 1991.
“We’re currently a third-generation-operated company,” Tony Leonard says. “I’m second generation as president of the company, although my oldest son and both my sister’s sons are in the company, and they’re interested in staying and continuing the legacy of what their grandfather has started.”
By the time Tony Leonard took over operations, Playground Music had more than five locations across Northwest Florida. With the shift in the economy in the early 1990s, the new president decided to make some changes.
“We streamlined our business down to the two locations — one here in Fort Walton and ultimately one in Panama City,” Leonard says. “And since then, that’s the way we’ve maintained our brick and mortar.”
While streamlining the business to make it more efficient, Leonard began venturing into opportunities being created via the new e-commerce. In 2004, Playground Music launched a Web site (playground-music.biz) with the goal of supporting its customer base in the band business — the company’s core clients — through online shopping. Band students and their parents could now purchase instruments, services and parts from the comfort of their own homes.
The Web site also allowed students in outlying areas to easily rent instruments online without having to commute to the actual store. Road reps at Playground Music delivered these rentals or purchases to the homes and schools of band students, taking the strain off parents.
“Time is of the essence to most people today,” Leonard says. “We want to gain customers, but we have to find ways to reach them and make it easier for them to do business with us. The Web site software has really facilitated that very ability.”
Playground Music has been able to extend its online rental business to other music stores in the area with the use of “thin client” technology — a stand-alone computer system that links up all affiliate music stores. Music stores that were not previously in the band rental business now can contract out instruments to students via Playground Music.
Thin client technology also allows Playground Music and its affiliates to stay connected, with up-to-date information on all rental inventory, payment and customer information.
“Businesses in Dothan, Marianna and Gulf Breeze wanted to see band instrument business happen in their stores, and we desired to be in those markets, so it was kind of a nice marriage and an opportunity for them and an opportunity for Playground Music to grow,” Leonard says. Once students sign an instrument rental at an affiliate store, Playground Music handles the rest of the process.
National and international markets have also begun opening their doors to the local company with its entry into the world of eBay. Since launching its first eBay store, Playground Music has shipped instruments to Europe, Australia, South America and even Kyrgyzstan in central Asia. Playground Music runs four eBay stores — for keyboards, drums, band instruments and guitars — to better target its customers. To better serve online clients, employees receive inquiries on their cell phones and answer via e-mail.
“You have to manage an eBay store just as closely as you would your brick and mortar store,” Leonard says. “It’s a tough environment to succeed in, but our learning curve is getting better each year.” After only three years online, the company now does more than 15 percent of its business via the Internet, with hopes of doing as much as 30 percent in the near future.
Membership in social networking sites such Facebook, Twitter and MySpace has also helped the company in getting its name out to new customers.
“Those sites are really the most practical way today, we’ve learned, to raise your search engine optimization,” Leonard says. “It’s much more affordable, much more relevant to the base that we’re trying to reach, and the challenge is putting relevant information out there that draws customers to our site versus somebody else’s.”
Leonard On the Line
What is Playground Rock School? Eighteen months ago, we started a rock school with youngsters ranging from in age 7 to 17 years. We turn them into bands and we coach them in a healthy environment where they learn to perform as a band, and then at the end of the semester they perform a live concert.
What sorts of events do you host to generate local business? We had our first annual battle of the bands in August (2009), where we simply went to the social networking sites and advertised. We had 50 bands apply to it, and our guys solicited the demo tapes and narrowed it down to the top 11 bands. Then it was on stage in Central Park. For about eight hours, rock bands performed out there. It was a great day, with lots of music and people.
Open mike night is also something that gives people an opportunity to come in and perform on stage. It’s really about connecting with potential musicians and creating relationships with them. We’ve created lights and an audience, and we’ve only been doing it since September but it’s already averaging about 25 to 30 people (performing) each week.
What sort of outreach do you do in the community? On Thursday nights we’ve been hosting a 17-piece big band called Playground Swing. It’s a great performing group, and the caliber is really good. We’ve been hosting that for about three years.
And then there is the Emerald Coast Community Band, which Playground Music kind of sourced the funds to get started. We just felt it was important to have an ongoing community band. It rehearses in the recital hall Tuesday nights, and it will average probably 35 to 40 members. It’s a community band for anybody who has formerly played. There is no audition; it’s just a social opportunity to mix and play with other musicians who probably participated in a school band or college band at some time. They are very close-knit and a very passionate group of people. They perform concerts three or four times a year.
When you changed strategy, what difference did you see in sales? We’ll often find customers that will come into the store based on what they saw on the Web site. It entices them to feel like maybe it’s worth the time to make the journey to our store from an outlying area because of our selection and our personnel … they feel like they’re going to potentially have a good shopping experience. Once they get here we’re able to hopefully succeed in making that a reality.
So what we’ve done is grown our customer base in the rental portion of the business. Really our Web site is more of a support mechanism. Where we saw growth in revenues was in the eBay segment. Those were significant. Our focus is partnering with suppliers (especially of guitars, amplifiers and drums) that allow eBay sales. That has allowed us to support our in-store merchandising with a greater variety of product because there’s a higher likelihood of turnover increasing and it has increased especially on expensive guitars. We can sell them all over the globe.
We like to maintain a strong GMROI, which is a gross margin return on investments, and that’s really what guides our business. If we’re losing money by carrying a product, we’re simply not going to carry it. And our business strategy in the future is going to be to align our product lines with companies that support eBay so that we can maintain strong GMROIs.