Month: November

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There will be a full block of rock this holiday season. AC/DC and Metallica's albums have sold with descent success. And retailers are expecting releases from Fall Out Boy, Guns n' Roses, Nickelback, and the Killers to be potential blockbusters. While U2, Dr. Dre, and Jay-Z's albums have been pushed back to next year, also due out are Kanye West, Beyonce, 50 Cent, Britney Spears, David Cook, and possibly Eminem. But most retailers do not believe that this will improve the state of the grim sales that have been going on the the record business. Sales have fallen 36% from 2000 to 2007. Industry decline along with the current economic situation make for a bleak outlook. Walmart is downsizing its shelf space for music. Circuit City is closing down 155 stores. There is still hope with the mild success of AC/DC and Metallica's albums, the people still want to rock.

Month: october

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Best Buy is a retailer that in the 90’s was thought to be hurting the music industry, but today it is a whole different story. Best Buy is standing as one of the best retailers for physical product, and with them taking over Napster they now have the chance to make waves online to strengthen their online sales. Best Buy is a company that is trusted by the industry and is working closely with them to keep that trust. Best Buy has decided to price all their CD’s at $9.99 at three different locations to prove to the industry that it is the best way to go. The great part about it is that they are willing to take a hit themselves if need be to show the industry its point of view. Over all, Best Buy is a company that still stocks great music and buys product to best fit its consumers in each market that its stores are in. They also have great marketing strategies, and even though some areas of their business may not be the strongest they still are at the top of the list always making improvements and communicating with industry leaders to provide consumers with what they are looking for at the price the are willing to pay and can afford.

Month: September

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Retail sales fell more than what was expected due to the consumer’s interest in the 2008 Olympics. Because the games were not showed in real time retailers at the beginning were not too concerned, but the buzz that grew around Michael Phelps soon changed that. There was a 12.5% drop in sales during the three weeks of the Olympics according to Nielson SoundScan when compared to the year before. Consumers at the present moment are facing high gas prices and a hard economy, which could have also influenced the retail fall. People had the opportunity for free entertainment, and they took it. The question is now will the presidential elections in November have the same affect?

Month: September

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After three years of research and experimentation, Best Buy has announced its rollout of musical instrument stores. By the end of the year, there will be 75 to 85 music stores located within existing locations. Each of these will be a store-within-a-store, taking up 2,500 square feet, and carrying over 1,000 musical instrument-related products from brands like Fender, Gibson, Yamaha, Roland, Drum Workshop, and more. Woodwinds, brasswinds, and violins will not be stocked. A sales team of five to seven will staff the area, and will provide group and individual lessons. The store is primarily targeting novice to intermediate musicians and buyers, but it will carry a fairly broad selection of guitars that are priced up to $3,200. They are also looking to cater to the church market, as their clean-cut image will be more suitable for a minister rather than other rock 'n' roll stores. These products will also be available at bestbuy.com. Separate rooms for playing drums, amps, and acoustic guitars will be available. The sound will be somewhat muffled, but bleeds into the retail floor with the purpose of drawing in more customers. Rock Band and Guitar Hero displays will also be located close to the musical instrument section to create more traffic. The idea for all of this originated with the company's research arm, the Customer Centricity division. After looking at purchasing patterns, focus groups, instore interviews, online surveys and more, the team tried to find a "homogeneity of needs." A sizable number of customers who were purchasing consumer electronics, home appliances, and software also voiced their interest in seeing a more extensive musical instrument selection at the store. This prompted them to open their first music store in Riverside, California in 2006. Others believe that the company is getting into this business because of the higher profit margin. Currently, Best Buy's margin is 23% in comparison to the low 30% range typical among music retailers. Regardless, Best Buy says they are looking for growth in this sector.

Month: May

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The NARM convention this year strayed away from the CD revival that it focused on last year. The conference focused mainly on new digital ventures and vinyl records. CD sales are down for the second year in a row, but execs are turning to alternatives to improve music sales. Vinyl sales are up 72% from last year, so many labels are increasing their vinyl releases. This is helping keep indie stores and small chains alive. The search for a new source of digital sales is still in the works. The statistic shown was that 80% of teenagers do not pay for music. This caused members of the digital community to urge labels to not fight free music but find a way to create a solution using the free music model.