Exclusive: Beaten by Beats, here’s how Monster is reinventing itself

Retail used to be a lot simpler. If you wanted to sell more headphones, you’d rent a display stand and put more headphones in stores. Maybe you’d take out an advertisement in the newspaper or on TV to ensure that people came into the store. Brick and mortar gave way to online shopping, and then to showrooming, and then to webrooming, but even that’s changing. It’s not a given that someone will visit either a retail chain or an Amazon.com today “just browsing.” How do you sell products to people these days?

That’s the fundamental challenge Noel Lee and Monster Products have been aiming to address. He thought he had solved that problem through a unique partnership with Dr. Dre, which led to the creation of the Beats line of headphones and doubled the size of his already substantial business. Beats worked out great for Dre, who sold the business to Apple for a stunning $3.2 billion. For Monster, it was a disaster – and an eye-opener for Lee about the changing face of retail.

Monster Noel Lee
Noel Lee, CEO of Monster Cable Monster/Facebook

“Marketing today, what do you do? Is there another Dr. Dre out there, so that you can create that Dr. Dre marketing experience? I would say no. Because the consumer doesn’t buy that way anymore,” Noel Lee, head monster and founder of the iconic company, exclusively told Digital Trends. “I think you still have to have your high-profile ambassadors, but am I going to buy something because somebody recommends it to me who gets paid a lot of money to do so?”

He’s shaking his head. He doesn’t need to say it. “Kids are pretty smart today,” he adds.

What does that mean for a company like Monster, which made its bones in retail?

Sports and rock concerts are the new retail

Noel has an idea: Blow up the stores. And blow up the strip malls. Blow up the retail chains, blow up the outlets and the circulars and the flyers and the discount, half-price, this-weekend-only business model that he himself helped create, and start something new. For Monster, the way forward is a new store, a new venue: concert halls, and sports stadiums, and casinos, and other places people go and spend their time. Heck, airports even.

“Is there another Dr. Dre out there? I would say no.”

For a new kind of consumer, he sees the need for a new type of store, and it’s not in any of the traditional places. But the experience there will be the same for music fans – it’ll be a place to try out cool new products and learn about new technologies. The products and the innovation sell themselves; it’s just a question of getting them in front of people.

“I used to get excited when you had a new Levinson amplifier or the newest Martin Logans or Infinitis, you know that whole excitement of the old days of being an audiophile and hearing things for the first time that you’ve never heard before,” Lee recalls. “Well, we’re bringing that to headphones and Bluetooth speakers.”

Getting a consumer excited by that sort of technology used to involve setting up a display at a store, side by side with several other similar products. But it’s hard to do these days, even with neat new products like MonsterTalk – the first headphones with integrated voice recognition. There are simply fewer consumers walking into fewer stores, where they encounter the wrong displays. And there are lots of reasons for that, but chief among them is big box retailers and chains. It sort of sounds like Noel hates chains.

“It’s not the one-on-one, face-to-face experience it takes to really expose a new technology or a high-end audio experience. So we’re looking for alternate venues,” he explains. Partly it’s the changing nature of retail: Where stores used to employ trained and knowledgeable staff that spent years learning about products, today retail stores are too often staffed by younger salespeople who haven’t spent a lifetime learning about headphone amps. So where does a company like Monster go?

“Alternative venues – like Barclays’ Center, stadiums where players can wear the headphone when they go in, and talk about how great the headphones sound. [We can] bring great-sounding music to a sports venue. We’re looking at cruise ships. stadiums, EDM concerts,”

And someday soon, casinos. But it’s the stadiums that brought him to Florida.

Hit the sign and win a car!

Derek Jeter may have made headlines for buying the Marlins for $1.2 billion, but the most interesting things happening at the stadium are in the parking lot. That’s where the Bentley is, after all, although sometimes its parked on the promenade among the spicy bratwurst vendors and beer stands. And out in left field, a sign hangs with a single word: Monster.

The concept hearkens back to baseball games in the Mantle era: Hit the sign, win a prize. Except today’s ballplayers aren’t competing for a week vacation in Bermuda or a free tax consultation, they’re trying to win the Monster Bentley, a jet-black beauty with red trim that’s worth $300,000 easily. It’s a new way of advertising products, one that the Marlins have embraced whole-heartedly.

“We said from day one we don’t want to do a traditional type of sponsorship. We wanted to create something that was really going to create an impact and plant the Monster flag here in South Florida,” David Murphey, Sr. Director of Corporate Partnerships for the Miami Marlins, told Digital Trends. So when Noel came to the Marlins in June 2016 with the idea for a new type of retail, it was a line drive out of the park. Just not 467 feet straight at the sign. No one’s hit it yet, Murphey said. Yet.

Blow up the stores. And blow up the strip malls. Blow up the retail chains, blow up the outlets…

Meanwhile, Monster has a chance to connect its brand name with the excitement and energy anyone feels when walking in a major league ballpark. It has retail locations on the main concourse, a display case outside the ballpark, and players who have themselves become Monster fans – “brand ambassadors,” from the consumer electronics giant’s perspective. When fans see players sporting headphones, that becomes a thing they need to buy too, one just as important as the jersey of a favorite player.

“It’s phenomenal how much merchandise people buy. Everybody has a hat, a t shirt, it’s almost like a rite of passage to be decked out in team gear. So we see this as a real nontraditional way to get people Monster gear,” Murphey said. He views the partnership as a huge success, one he plans to build on.

“We’re just scratching the surface,” he told us.

Putting the retail in rock and roll

“I’m not a businessman, I’m a business, man!” said Jay-Z, and it’s true: The rapper and entrepreneur’s fingers are in a as many pies as there are flavors. One of those is Roc Nation, the sports and music management agency, which – like Shawn Carter himself, dabbles in a lot of areas. It reps artists like Shakira and Rhianna, and works with athletes like Kevin Durant and Robinson Cano and two-time World Champion Andre Ward. Like sports arenas, music venues are broadening their reach beyond simply music. People go to a concert to consume music, sure, but while they’re there, what else are they going to do? This is where we find the modern consumer: Call him Shopper 2.0. And he isn’t walking the aisles of the local big box retailer half as much as he used to.

“We know the challenges facing retailers today,” explains Michael Yormark, President & Chief of Branding and Strategy for Roc Nation. “We read about it in the newspapers, we hear it every day. We’ve seen traditional retailers close stores. It’s a very, very challenging time. Those retailers that survive will have to create very unique experiences in order to attract consumers on a consistent basis. It’s going to be a must. And going to a stadium, going to an arena — your primary purpose isn’t to browse, but it’s going to add to the overall experience,” he told Digital Trends.”

“And people are getting increasingly comfortable doing that.”

Yormark saw the transformation happen first with airports, which turned from waiting rooms into wonderlands of high-end retail, venues for celebrity chefs to open outlets, for Prada, Chanel, Louis Vuitton and countless others to sell apparel to people with nothing but time on their hands.

“Years and years ago, who would have thought airports would turn into shopping malls? … Now people have to go to airports earlier, security is much tighter, what are you going to do? ‘Let’s shop, let’s have a meal.’ And I think you’re going to see more of that in more venues popping up in the future.”