PETER OGLEY, SENNHEISER
TALKING SHOP at SENNHEISER’S FLAGSHIP SYDNEY STORE
Sennheiser opens a boutique store all of its own in Sydney. What’s the reason, and what’s next?
Sennheiser has a shiny new flagship store in the landmark building of 5 Martin Place, the historic original home of the Commonwealth Bank of Australia, where it nestles among boutique outlets for luxury brands such as Omega watches and Giorgio Armani. We visited the store for the ribbon cutting (below), which had massed Sennheiser staff on hand to welcome the first guests.
The new flagship store allows hands-on experience of not only Sennheiser consumer headphones, but also office and professional products such as the AMBEO VR microphone, conference systems, stage microphones and more. Plus there were a few surprises on hand, such as the first sample to reach Australia of Sennheiser’s forthcoming and long-awaited AMBEO soundbar, now due to launch in May this year. And the luxurious HE 1 flagship headphone system, the ~$80,000 successor to the Orpheus, is residing in the same private room, available for booked demonstrations (no walk-ins please).
Before the ribbon-cutting we spoke with Peter Ogley, COO of Sennheiser Consumer Products, who was visiting Sydney from Sennheiser Head Office for the store opening.
SOUND+IMAGE: So how long have you been running dedicated Sennheiser stores like this? PETER OGLEY: We’re fairly new in our stores. A couple of years ago we opened a flagship store in Berlin, our first test — obviously home ground and a great city. About 12 months ago we opened San Francisco, and that was a really good experiment to understand how we could appeal to our US customers. And now Australia! S+I: So Australia is third?
PO: Third of our flagship stores — we also have a number of other retail stores. Australia’s been a really growing market for us, we seem to resonate with the customers really well here, and where better than an iconic city like Sydney. When our head of sales saw this building he said ‘this is the place we have to be’... it really marries the heritage of our company with the store design which has that cutting edge approach... to really show the heritage of the company but also being at the forefront of innovation and technology. I think it’s is a nice blend.
S+I: The last decade or so has seen so many companies enter the headphone market — is this part of Sennheiser creating differentiation? PO: It’s really about letting people experience
the product. We’ve got such a wide portfolio — everything from our HE 1, to our AMBEO Smart Headset which you’re using, it’s a very broad church of product. And this gives us a real opportunity for people to come in and experience this. So many people know of Sennheiser, not so many people have actually experienced Sennheiser. This gives them the opportunity.
The smell of success
The store certainly meets the brief of the flagship location. We spoke with the manager and deputy manager, both good value, and impressively knowledgeable on technology in general, as well as the latest retail trends. We were intrigued to discover that a scent diffusion system was being used to puff out vibes at the entrance — we have encountered scent use in cinemas and home cinemas, but were ignorant that so many retail stores now deliver scent as part of a sensory retail experience. When we asked for details we discovered that the choice for the evening was ‘Amalfi Coast’. (‘Australian Coast’ came a close second in the pre-opening sniff tests, we were informed, perhaps also losing out because, you know, you’d want to define which bit of the Australian Coast, really.)
Premium store, premium pricing?
We also had conversation with Dennis Wendt, Sennheiser’s Director of Direct Sales, which includes all the branded stores and also the company’s own online sales. Wendt has developed the flagship store concept and also smaller retail operations, which include pop-up stores — a presence which can to test locations before committing long-term. The Sydney store is very much not a pop-up, we were told; a longer term commitment has already been made.
Also Wendt has developed the first Sennheiser franchise store, in Kuala Lumpur, an arrangement which could apply in markets where full ownership of stores might not be possible, notably China. Is the idea for the flagship stores to be a branding exercise, we asked him? Is Sennheiser happy for people to experience the products but buy elsewhere?
We were told with a wry smile that a branding exercise pitch would have been an unlikely green light with the brothers Dr Andreas and Daniel Sennheiser! Break-even would be considered a minimum, if not in the first year, thereafter, he told us.
What about in-store product pricing? Several Sennheiser staff at the event said they were expecting sales at the flagship store to be made at MSRP prices — this would give due consideration to nearby Sennheiser dealers, including JB Hi-Fi. And given the flagship store’s tourist-friendly location alongside Sydney’s most upmarket international brand stores, discounting might not be a dealbreaker on profitability here.
Those running the store did, however, give us the impression that they will definitely be chasing the sale. So it’s possible you can shop in style, and still enjoy a good price. Not to mention the aromas of the Amalfi Coast.
In more general matters, we asked Peter Ogley how Sennheiser as a company has faced the last decade of raging change in the consumer headphone market.
PETER OGLEY: It’s obviously been a booming market, often led by content and change, ever since the iPod came out, and that got people listening to music again, which was great. And now smartphones drive it and people have changed their behaviour completely in the way they use headphones. So the market has boomed and what’s been really nice for us is it makes people think about audio more, and we differentiate in that space by showing what can really be done when you really concentrate on audio and think about things like the ergonomics, so it’s comfortable to listen to over long periods of time, and really driving on some of these things that feel like core basics for a company like us, but bringing them to a new audience. And then as we go forward with the trend of wireless solutions and people wanting to cut the cord, it has given us a new opportunities to push the audio boundaries through new technologies. So it’s an ever changing market, and it’s cool to be in — it’s fast and dynamic, even though there are a lot of competitors.
S+I: Last year was the first time wireless headphones outsold wired in the US — is that a global trend?
PO: It’s very global. The shift has been happening over the last two or three years, so we now find the same for us, our wireless products outsell our wired products, and it’s been a rapid adoption. So we’ve definitely understood that customers seem to enjoy the freedom of cutting the cord, and that’s really been an opportunity for us as with other companies to reach new customers, and it’s been pretty good for us, actually.
S+I: Bluetooth seems still to be a bottleneck for quality — the basic audio spec hasn’t improved since it was launched, and the better codecs are all proprietary. How do you approach getting Bluetooth to not sound shit?
PO: [Laughs.] We’ve seen Bluetooth improve quite a bit over time, but it’s a very gradual thing; it’s never been the primary area, certainly, for Bluetooth technology. We do try to adopt the very latest codecs like aptX HD, and we work really hard on low latency with our codecs because we know a lot of people are now consuming video also, so we try to push hard there. We also make up for it with our acoustic know-how elsewhere, so in transducer design — we still manufacture and design our own transducers, so improve those — or DSP algorithms which are proprietary to us; we really try and improve that experience for customers.
S+I (continued): So when AMBEO started it was nine-channel recording, then it became VR mics, then it became binaural ear-mikes, now a soundbar — what exactly is AMBEO? PO: So AMBEO is our umbrella terminology to try to create immersive audio, or 3D audio. It’s something we really believe we have the opportunity to do different things throughout the industry. We split it into four areas — first how we capture audio, so things like the VR mike but we also work with many studios now to understand how we’re going to capture audio for things like augmented reality in the future, and with our heritage in microphones, that’s a great place for us to take that. The AMBEO smart headset you’re using now, that was a way for bloggers and vloggers who want to capture that experience.
So that’s the capture piece. Then we have a processing piece, what we do with blueprints for technology creators to process audio as well. We have a mixing piece and finally we have a playback piece, which includes the new AMBEO soundbar. So in the past you probably heard our 9.1 solution, which is a very impressive sound, but in many ways people aren’t surprised that nine speakers in a room plus subwoofer sounds great. We wanted to push the envelope towards something which would be surprising for customers, and our new AMBEO soundbar is designed to deliver a really immersive 9.1 experience but as a one-piece system. And it’s a great example of trying to educate why it can be so great for you as a customer to experience really enveloping immersive sound. Because there are lots of buzzwords which have been used for years, like 3D audio, and many people don’t understand or have heard it but didn’t seem to experience it, while this really does give you that huge immersive experience, to understand what we do. It’s the last piece of the jigsaw.
S+I: You’re doing an AR demonstration at CES? PO: Yes, we’ve partnered with Magic Leap for a couple of years, very quietly, to launch their goggles. The real challenge is that you can have a great mixed reality video world, but it collapses if the audio isn’t matching that. So what we’ve been doing with our AR One headset is to be able to create a sound blend that mixes real sound and virtual sound; again they’re creators’ editions, to let creators understand how they can make sound work in a mixed reality way, something we’ve been working on through things like transparent hearing, so that customers or creators are being able to adjust that, to mix how much outside world they want versus how much virtual world.
S+I: Using capture and reproduction rather than direct sound?
PO: Exactly, yes. It’s an exciting thing and it’ll be fun at CES to start demonstrating it to people.