Perspectives, News & Opinions From The Researchers At Edison

Adventures in the Land of Retail

Entry by Edison Research | Monday, January 31st, 2005 | Permalink

by Sean Ross, VP of Music and Programming

For years, the concept of labels paying for “price and position” at music retail was both an aggravation and an inspiration for some broadcasters. They resented the notion of any label attention—and the attendant advertising co-op dollars—going to the print media, which, after all, didn’t directly expose music to listeners. Other broadcasters, going back as far as the mid-‘80s, have wanted to find something comparable they could sell the labels—often leading to the paid spin programs of recent years.

Just as video gaming and DVDs have diluted music’s affection among consumers, you can only believe they’ve also reduced the amount of passion that goes into selling music.

As with everything else in the music business, “price and position” programs have allegedly been scaled back, or at least reconfigured, in recent years. In the same way that only a few major stations can still expect much label support for station concerts, P&P spending is now reportedly going to a handful of big box retailers, but hasn’t necessarily been reduced overall, because the big guys can demand more attention.

So what are labels getting for their money? I’ve had a lot of opportunities to find out lately. Having gone from my previous post in the East Village, a few blocks from Tower Records and the Virgin Megastore, to the heart of exurbia means that a lot of my record buying has shifted to the electronics superstores. I’ve been watching their weekly circulars—the focus of that co-op advertising—carefully. And I’ve had some experiences that should make any label marketing director cringe.

Virgin and Tower were never the least expensive places to buy records. But they were nearby, they were decent shopping experiences, and, most important for me at the time, they had a lot of imports. I especially liked the access to the British “Now!” and “Hits” series since I was getting most of my domestic product through work. Now, with less access to current product, I find myself checking for specials each week for the first time since I was a teenager and there was a $2.99 album war between Korvettes and Jimmy’s Music World.

In the city, the on-sale date might conjure up notions of folks lined up at 11:59 p.m. on Monday night, waiting for a hot release to go on sale. But at one of the big box stores near me, the new releases section is often only half-stocked at lunchtime on Tuesday, or even sometimes on Wednesday. Not all the advertised specials are displayed—some are still sitting in a cart, waiting to be shelved. Some are displayed at their sale price. Some are marked at their regular price and only somebody armed with the circular would know they’re on sale. (These records usually scan for the correct price, but I’ve also had at least one experience of having to hand a cashier the circular to get the sale price.)

Labels worry about street date violations, but in the suburbs one can’t always count on a record being available even after street date. Occasionally, I’ve sent a store employee back to a stockroom to look for an advertised special, sometimes armed with the circular, so they’ll know what the album looks like. Less often, I’ve been told that an advertised special hasn’t come in yet—even on a Wednesday or Thursday. Usually, the hard-to-find title is a reissue or a new album from a veteran artist—O’Jays, Raphael Sadiiq, and even Elvis Costello have prompted trips to the back room—and you feel bad because these are the records that particularly need the help that price-and-position is supposed to provide. But sometimes I’ve had trouble finding the hits, too.

On ‘Super Tuesday,’ when U2’s “How To Dismantle An Atomic Bomb” came out amid a flurry of deep discounting, I went to two of the stores that were advertising it for $8.99. The first hadn’t gotten it in by Tuesday night. The second, incredibly, had it but wasn’t displaying it on Wednesday afternoon. An employee pointed me to the bottom rack of the new releases section where the overstocks were kept. Maybe on the day before Thanksgiving, things were too busy to keep restocking every album in every bin. But I couldn’t help wondering if the intent was to use the advertised price to generate traffic, not to actually sell the record. And two days later, I felt silly about going store-to-store since the U2 was now selling for $7.99 elsewhere.

The big box stores are by no means the worst experience I’ve ever had at music retail. That would be at the collectors’ stores where I used to look for old 45s during the ‘80s and ‘90s, where the vibe was straight out of “High Fidelity,” but the clerks were usually a lot less amiable than Jack Black. When www.gemm.com came along, I was just as happy to be able to find most of my want list on-line. And when I can find a recently discovered oldie on iTunes Music Store, even better. For better or worse, one element of the “High Fidelity” experience doesn’t exist at the big box stores. You’re not going to be exposed to anybody’s favorite new music, good or bad. At the chain stores, what you hear is usually the hits; often, as it happens, the music is coming from the XM or Sirius display.

Beyond being upset that retail pricing programs exist, radio people probably don’t pay a lot of attention to them. Some radio people still pay attention to retail, but they’re more likely poring over SoundScan, not maintaining the sort of relationships that legendary CKLW Detroit MD Rosalie Trombley was known for in the ‘60s and ‘70s. But retail pricing gives one a lot of clues to how records are really performing. Watch the specials for a few months and you get a sense of when a $9.99 price point is being used to give a record that little extra oomph, or, as often, to try and sustain a record that had a disappointing first week or two.

There was a time when you would have expected the music section to be the plumb assignment for the twentysomething-year-old staffers that I encounter at the chain electronics stores. Today, just as video gaming and DVDs have diluted music’s affection among consumers, you can only believe they’ve also reduced the amount of passion that goes into selling music, which is too bad. As a consumer who still wants a hard copy of most albums with the official packaging, price-and-position programs have definitely helped set my purchase agenda—there are albums I want for $9.99 that wouldn’t interest me at $14.99. But they’ve also created frustrations. So imagine how somebody outside the music business feels.

5 Responses to “Adventures in the Land of Retail”

  1. mike marshall (frank brodie) says:

    Got a chance to talk to Rosalie for the first time in a long time last week. It should come as no surprise that Rosie is still Rosie, with that wonderful laugh and her “calls ‘em the way she sees ‘em” attitude. One of the great ladies of radio is now officially retired, which means she can deal with the snow that drifts in her driveway at her leisure. Rosie was one of those people who made it fun to go to work every day.

  2. John Parker says:

    Hi Sean,

    Just read the “Adventures in the Land of Retail” piece and I have to tell you that this experience is not exclusive to music at the box stores. This has happened to me more than once with Video games as well at Best Buy. As an avid gamer that waits for the latest editions to any of the EA sports titles, BB never has the games on street date. They are always delayed in even getting the product to the store according to one manager I spoke with. Not sure if it’s a distribution problem or some other crazy thing at work but when your in the business of selling such items like TV’s, Freezers and Printers that don’t have a “freshness” date that mentality just might sink down to all the items you sell. But then again DVD’s always seem to be there when they are supposed to be. Color me puzzled.

    jp

  3. Sherwood says:

    Another terrific column! Thanks!

  4. Bill O'Brien says:

    Sean,
    You have hit upon my experience at Best Buy & CC (Circuit City…not Clear Channel…however…).More than once I’ve opened boxes, dealt with mis-marked pricing and my favorite, artists filed under their first name. It’s always funny when an employee walks over and asks “Can I help you?”. No, but maybe I can help YOU!
    It’s also interesting that new DVD’s are prominently displayed near the store entrance.

  5. Josh Hosler says:

    It’s amazing how much the retail world has changed since my time as Assistant Manager of a Seattle Camelot store in 1994-95. But my pet peeves from that time have now become the rule: salespeople know nothing about their product and aren’t even all that eager to sell it.
    My retail experience forever changed my views on customer service. I was trained very well by a manager named Eileen Bishop to use EVERY resource at my disposal to satisfy the customer. Once, I opened five copies of Schubert’s “Ave Maria” — and used my music theory degree — to find the one in the key of B Flat. Even then, I didn’t know anyone else who would go to that trouble.
    All this is a little off-topic, but thanks, Sean, for revisiting the stores. Sometimes it seems like radio people think they live in a vacuum, a no-retail world where radio is the end product.

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