Record Stores Get Their Day

Yes, there is still room for these specialty stores. They must hold on to their ambiance, variety and service. It's very important to keep, maintain and expand your database. Database marketing for specialty, higher-end prices is critical.

Susan Rider, President, Rider and Associates, LLC

Independent record stores are a dying breed, not only because of changes in technology that have doomed most national music retailers but also because of the challenges of competing against the big-box stores still in the business of selling music. It's not unlike the troubles that independent booksellers have had staying in business.

It's futile for independent retailers to try to compete against the likes of Walmart or Best Buy on the basis of price (outside of the "market price" on new releases and top sellers), so they need to pursue a couple of other strategies:

1. Focus on assortment: Find your niche and be the best at it. Whether you specialize in indie bands, folk music or classical, chances are good that the big box stores aren't interested. And some customers would still prefer to buy full-length CDs (or even LPs!) instead of downloading track-by-track from iTunes.

2. Focus on service: Identify your best customers and their interests. Cater to those interests in terms of your content, but also develop CRM techniques for cultivating their loyalty. This could be as simple as collecting e-mail addresses in order to notify them of new releases of interest, or developing more specific software to track their preferences and behavior.

There are other key tactics to follow, including choice of location and multi-channel retailing but the bottom line for staying competitive is a strong focus on content and service.

Richard Seesel, Principal, Retailing In Focus LLC

The attribute that any independent retail business needs to hold on to is "service," to include personal attention, knowledge, and familiarity with customers. These are attributes that play to the independent's strength over most chain stores. This is true for record stores, pharmacies, barber shops, flower shops, and every type of business where the personal touch is considered to be important to a certain loyal group of customers.

David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates

The article pretty much sums up the reason for their viability. Selection, product knowledge and service is just retailing common sense but big box can't deliver. The vinyl comeback is also helping the resurgence of the little guy. I think it's the wave of the future as our generation yearns to listen to Cat's Can Fly and Kajagoogoo again and again.

Doron Levy, President, TheMortgageMachine.ca

There is room for these specialty stores, but they are a dying breed. Knowledge, product selection, special events and the general atmosphere of the stores keep them alive with consumers. Though their number is dwindling, having grown up going to the local record store, I hope they continue to build their niche.

Max Goldberg, Founding Partner, The Radical Clarity Group

There is now, and will always be, room for great independent retailers. The key word is "great". If you look at the music category, where else can you find a great shopping experience but in a well run independent music store, where the staff love and know most everything about every artist and record? Certainly not in a big box, and definitely not online. That's not to say that the online or big box model doesn't work for music, because it obviously does. But for true music lovers, there's nothing like passing an hour in a great music store.
This same argument applies to hardware, clothing and shoe stores. Consumers are 'begging' for a great shopping experience. Surely more independents can provide one.

Kevin Graff, President, Graff Retail

The retail market just gets more confusing by the day. Today's other article discusses how high-end retailers are now having to focus on price in order to survive. And yet independent record stores seem to be thriving amid stiff competition from national retailers.

What is the magic formula? Why is one genre succeeding while others fail? The answer is simple. Shopping experience. If customers are in an environment that truly envelopes them in a fun, eventful, and pleasurable shopping experience, they will spend money. Record stores have been able to do this in ways no large retailer can.

Can this formula be transferred to other kinds of retailers? I would say yes. But it's not a cookie cutter job. Good luck to those who have been living off their names and reputations.

Marc Gordon, President, Fourword Marketing

A great shopping experience in an independent record store is like Pandora.com in real life, with conversations and human interaction and great music turned up nice and loud so you can feel it, not just listen to it. Long live the record stores! I am making a commitment to go to the one a mile from my house this weekend.

Anne Howe, Founder, Anne Howe Associates

I used an independent record store in Detroit as one of the case studies in my first book. As a student of this business I've concluded that, yes, there is a future for independent music stores but that the future doesn't bear much resemblance to their past.

The indie store market is driving most of its revenue from sales of used rather than new products (CDs, vinyl and even tapes in some cases). In addition, many have taken on new lines -- music DVDs, independent film DVDs, music merchandise (shirts, etc.) to make up for the shortfall of sales lost to the Best Buys, Walmarts, etc. in the physical retail space and the iTunes, et al in the exploding digital music arena.

Finally, these stores provide access to specialist buyers, from those looking for vintage jazz vinyl to followers of bleeding edge unsigned bands. These buyers still have a need for physical product rather than just digital content. One is tempted to look at it as a declining market until one realizes that there is still a good deal of vinyl being produced -- sometimes by bands whose membership wasn't born until well after the CD revolutionized music sales.

So, like all other independent retailers, rumors of the death of the indie music store may be premature. Sure, lots of them are going under, but the remaining ones will be stronger than ever.

Ryan Mathews, Founder, ceo, Black Monk Consulting

True music afficionados will tell you that music sounds better on vinyl. More and more, record companies are releasing collections on vinyl, and including the digital CD as well. The Best Buy's and the Wal-Mart's of the world are a long way away from getting into vinyl again with any serious intent. The independent stores offer music lovers a place to go to get their desired vinyl.

Secondly, knowledge of music possessed by store personnel is a key differentiating point. The independent stores know music, and know artists, and can make great recommendations. The average Wal-Mart employee will steer you towards the Jonas Brothers or Miley Cyrus because they are popular, or because Disney has paid for large displays. Each retailer provides a service to the community. But, because they are different, the independent store continues to have longevity.

Joel Warady, Chief Marketing Officer, Enjoy Life Foods

I think the thing that makes these stores work for their customers is the shared passion that exists between retailer and customer. These stores are a gathering place for a like-minded community. Everything about these stores revolves around the shared passion.

In my work with independent retailers, this is a point I'm emphasizing. Success depends upon building a community of shared, passionate interest, of building relationships with customers around that interest, and being sure that everything about the store aligns with that interest. It is the way to capture a niche and differentiate from all other players.

Ted Hurlbut, Principal, Hurlbut & Associates

There's definitely room for indie record stores, thanks largely to their appeal among true music aficionados (across all genres). The key here really is the shopping experience, especially knowledgeable staff who not only like their jobs but more importantly like sharing their love of music with others who also love music. It also helps when the store atmosphere is a bit quirky and feels a tad outdated - in essence, a store that feels totally unique, a rare find in an industry that reeks of sameness.

Unfortunately, it's creating a profitable indie enterprise that too often proves too high a hill to climb. Part of the answer may be found in broadening the offering so it appeals to more consumers, while maintaining the core shopping experience (e.g., adding a café, a bookstore, online sales, a loyalty program, etc.). No doubt, this is a tough category for indies. But creativity is crucial if the small merchant is to survive in the land of retail giants.

Tim Henderson, Independent Retail Consultant, Independent

There are still stores where you can buy parts for your Model T, and just this morning I saw where a slice of wedding cake from 1871 (!) is being auctioned, so I guess there will always be providers for these niches (or ultra-niches), particularly when the original market was large. (Then again, just try an find a wax-cylinder recording of Caruso - or anyone - for your 1903 Edison.) But these are essentially antique dealers...it's not a growth industry.

'notcom'

I found it ironic that The Boss is quoted in the article without comment that he signed with Wal-Mart to distribute his last album. He later recanted and said he regretted the move, but I'm sure he did not return the money.

To "csundstrom": I believe I hear an Excel report awaiting analysis, and it's calling your name. Long live the independent record stores, where the passion for music lives on.

'OFLC'

As the world gets older, and fewer people are still alive when records were in their heyday, I am still encouraged that they will have a place in the market for the foreseeable future. Young kids today listen to 60's, 70's and 80's music like it was recorded yesterday. Those with a passion will seek out the vinyl versions. It's really a hobby or interest, rather than a competitor with other music stores. There is always traffic in the vinyl stores. Check out my fave...

Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Retail is changing. There will always be a place for specialty retail, yet it will get tougher and tougher for those that have to compete directly with digital formats - music, books, etc. Eventually similar difficulties will appear in other specialty categories - look at what Zappos is doing to the shoe market.

That being said, the challenge for retail is meshing the on-line experience with the in-store experience. Providing a better overall experience with real stores and online capability can actually give such retailers an advantage. I recently described this in greater detail in a blog on this very topic...

Rick Boretsky, Retail Data Integration Specialist, RIBA Retail (www.ribaretail.com)