For seven straight years sales have dropped in the music business and 2008 doesn't appear to hold any change. Peter Kafka tells us it is "because the three big retailers who comprise most of the industry's sales -- Best Buy (BBY), Wal-Mart (WMT) and Target (TGT) -- will likely make significant cuts in the amount of floorspace they devote to CDs."
Why would these retailers do that? "Industry executives expect the big players to cut back more dramatically after the 2007 holiday season, because they've concluded that the CD market is in permanent decline."
Resulting in;
"A self-fulfilling prophecy: Retailers stock less music, so consumers have less to choose from, and then buy even less, causing retailers to stock even less. Repeat."
Floor space in a retail establishment is valuable. They want to extract the most profit possible out of each square foot of space available.
Since Music CD sales continue to decline, the value provided by their space declines leading any sensible marketer to re-think what ought to take up that space instead of those CDs. Something more profitable. Soon - Christmas is upon us!
There is a lesson in here for all of us, especially those who don't know and may be employed in this business. Value the floor space you work in. Treat it as though your job depends on it. It just might! Keep it neat, clean and in saleable condition. Make it easy for your customers to buy. Look at that floor with dollar signs in your eyes if you have to. That's exactly what it is...
[From an earlier article in the WSJ - "because of the Internet, those consumers have more ways to obtain music now than they did a decade ago, when walking into a store and buying it was the only option."]
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