The end of brick and mortar music stores?

[smopo24]

I don't know who has heard, but in Chicago, Virgin Megastore (a store I used to work in for 4 years) is closing it's doors finally, after years of poor sales; this action follows close to the demise of rival Tower Records. Coconuts, Sam goody, and other retailers seem to have been picked off one by one in the last decade. Now a major Canadian retailer is no longer:

http://chartattack.com/damn/2007/05/3010.cfm

Is this the end of the large brick and mortar stores as we know them? Have downloading or major-label practices brought this on? What effect will this have on smaller specialty record stores?

[dolivas]

I don't believe it's the end of brick and mortar stores but it's the end of huge mega-chain music stores. A lot of it has to do with the price of cds and lack of variety/quality material out there. Likewise, mp3 downloads have been huge in bringing down sales. Walmart and other big box stores selling cds at lower prices plus giving you the benefit of buying other budget crap really undercuts those stores.

Brick and mortars still should survive if they tailor themselves to niches, either to serve as accessory stores where you can buy posters, t-shirts or portable media player stuff, or to serve a different audience which still likes vinyl records, best-of, boxed sets, rare albums etc. Dunno how profitable or if it is still profitable to sell a medium such as cds which are slowly being overtaken by digital media and coming soon flash memory. Either diversify more or fall it seems to be the case.

[smopo24]

Originally Posted by dolivas

I don't believe it's the end of brick and mortar stores but it's the end of huge mega-chain music stores. A lot of it has to do with the price of cds and lack of variety/quality material out there. Likewise, mp3 downloads have been huge in bringing down sales. Walmart and other big box stores selling cds at lower prices plus giving you the benefit of buying other budget crap really undercuts those stores.

Brick and mortars still should survive if they tailor themselves to niches, either to serve as accessory stores where you can buy posters, t-shirts or portable media player stuff, or to serve a different audience which still likes vinyl records, best-of, boxed sets, rare albums etc. Dunno how profitable or if it is still profitable to sell a medium such as cds which are slowly being overtaken by digital media and coming soon flash memory. Either diversify more or fall it seems to be the case.

Big box stores and new technology are huge contributers to the decay of the larger chain stores, but I don't think diversity helped to keep Virgin afloat. I think large overhead combined with low-markup merchandise did them in. Virgin had a huge selection of vinyl, DVDs, clothing, electronics, and books. The big box stores demand rock-bottom prices on popular cds by threatening the majors with not carrying their products. Big box stores will even use cheap cds priced below cost as "loss leaders," just to get customers in the door.

[dolivas]

Originally Posted by smopo24

Big box stores and new technology are huge contributers to the decay of the larger chain stores, but I don't think diversity helped to keep Virgin afloat. I think large overhead combined with low-markup merchandise did them in. Virgin had a huge selection of vinyl, DVDs, clothing, electronics, and books. The big box stores demand rock-bottom prices on popular cds by threatening the majors with not carrying their products. Big box stores will even use cheap cds priced below cost as "loss leaders," just to get customers in the door.

Yep loss leaders that's the key phrase. All those big box stores have the clout to really undercut prices, if labels deal with them they get wider/larger distribution and bigger sales through lower prices. However, those big box stores have less floor space to dedicate to music so they tend to offer exceedingly less variety in what music you can pick. So the more pop your music the better chance you have at getting your cd sold there. Forget indie labels getting much money out of partnerships with big box stores.

Therein lies the rub if music retailers are closing down the consumer has less to choose from in the physical audio format. That's why the net and downloading mp3s is the future since what you're losing you can get through the net. However, being able to get on the net i.e. paying for high-speed internet, having a nice cpu/hard drive for storage, etc. is still very cost prohibitive to size-able amount of people who either don't have a) enough cash to pay for such services b) no high speed internet access in there area. That's largely Walmart fly-over area right there. Brick and mortar stores outside of huge metroplaces like NY, LA, chicago etc. don't have much of a chance against the Big Box stores. Padunk, OK or any other small town, USA I would venture will really start feeling the squeeze of losing brick and mortar records shops left and right since Walmart Supercenters, Fryes etc fill that need. Bigger cities not so much.