Digital sales offer hope as CD purchases decline

Music sales have taken a big hit in recent years, but the category still has life in it. In-store sales at Christian retail have dropped much more slowly than in the general market, and some Christian stores have seen success with digital sales.

We discussed some of the music issues with:

Brenda Harrison, co-owner of Lighthouse Christian
Bookstore in Bedford, Ind.

Charlotte Myrick, owner and manager of Baptist Bible &
Book House in Laurel, Miss.

Jeff Williams, co-owner of Bible Book Store
in Victoria, Texas

Read edited excerpts of the conversation below, and listen in on the complete discussion by clicking here.

Christian Retailing: How were music sales for you last year?

Williams: At my store it looks like we were kind of with the industry—our overall music sales were down about 13.5% compared to the previous year.

Myrick: We are not a huge community here in Mississippi, but my sales did not drop quite that much. Part of that is because we did go to the CD-burn system.

Harrison: Actually, our sales for 2009 in music were up over 2008, and if you count the (Quest) isMOD, they were up quite a bit. CDs were about the same.

Christian Retailing: How did digital sales compare to the previous year?

Myrick: Hard to tell because we got our burn system later in the year. We noticed that we were losing sales because of Internet sales and that sort of thing. It was impossible for us to keep everything on the shelf for last-minute sales especially, so we decided to go with the burn system because in this instance, people think that they have to have it immediately, and that was the easiest way for us to get it almost immediately.

Harrison: We installed ours in 2008. Our sales in 2009 on the burn-on-demand were up 34%.

Most of our burn-on-demands are for accompaniment tracks. We still stock accompaniment tracks and regular CDs, too.

Williams: We installed our system in late 2007, so I had a full year to compare 2009 to 2008. Last year, only 4% of my total sales that were digital or burn-on-demand were in regular CDs, but it was 84% in tracks. Overall from 2008 to 2009, I saw just a slight increase in digital track sales, just about 3%. Full CD sales, burning complete discs, had over a 500% increase, so I am seeing a huge increase in digital sales in the way of full CDs. ... That's just coming into its own here in our store.

Harrison: I don't have sales broken up into categories, but I do know that 18% of our music sales in 2009 were burn-on-demand.

Christian Retailing: What are you doing to increase music sales?

Williams: The on-hand stuff we still carry on the shelf. We are trying to be more aggressive about getting new releases and best-sellers really right up front and away from the music section. We have one of those little roll-around mobile carts and I am trying to bring more attention to that.

But really we're seeing a much faster increase in digital. We added a second listening station last year, and a second myMEDIA BurnBar system and put it up front, and we're trying to get every customer that has any interest in music at least in front of it. We're finding that once people really understand the capabilities of the digital stuff, they are really impressed.

Myrick: We have found that it's very important when a customer walks into the music department to introduce them to the (burning) program—take them over, sit them down, let them know what to do. We have three listening centers. People come in now—some of them will stay for hours. We had a man a Saturday or two ago that burned 24 CDs.

There is a learning curve. They do have to learn what you have and how it works. Once they realize how easy it is to use, they're just blown away that they can sit there and listen and pick out music that they would have never heard maybe before.

Harrison: The fact that we have listening stations for customers to listen to CDs helps the sales. We have two burn-on-demand systems, and on one of those, we do have stools because, as Charlotte mentioned, especially if they are doing accompaniment tracks, people can spend several hours looking through the songs to pick what they want.

Myrick: We have tables set up, with two listening centers on one and another kind of listening center for other things. We have chairs there.

Christian Retailing: How have sales been this year?

Myrick: March is not necessarily a huge month because most people have already bought Easter things and whatever earlier, but we burned about 220 tracks.

Williams: We are seeing the same results this year. Compared to last year's first quarter, this year's digital, full CD sales were up 674% and our track sales were up 55%. There was a learning curve—people getting used to (it). We moved one of the listening stations away from the music department and actually put it in a different area of the store, and that has stimulated some additional sales because it's in an area not directly related to music.

Harrison: In January, burn-on-demand CDs, most of them probably accompaniment tracks, were up 38% from 2009. CD sales have been consistent, too, for us. We promote supplier promos for the regular album CDs—free CD with purchase. We also feature a CD sale rack for the albums that we have in stock.

Christian Retailing: How are customers adapting to in-store digital buying?

Williams: Word-of-mouth is really starting to kick in for us. We are into our third year now, but it has just taken awhile to get the public to understand what it's about and really look to it. The presentation, the software, the whole processes have improved greatly over the last two years—I think it's much more user-friendly and you can produce your end product much more quickly than when the system first came out.

Myrick: I think teens and young adults just know exactly what to do. It's your choir directors and folks that are a little older that are not that into this type of media. But once they learn how to use it, they're wild about it. But you do have to introduce it to them, and so my employees have been instructed: You take them over there, you sit them down, you show them how simple it is and from then on you don't have to do a thing. They just go straight to the chairs and sit down and start listening. The middle to older adults you have to introduce them to it a little more.

Christian Retailing: What do you see in the future?

Williams: About midyear in 2009, we cut the number of CDs that we carry in the store in half, and I'm looking to do that again. We just keep pushing that inventory down—with the (burn) system, as up-to-date as it is, many times new releases are available to be burned on the same day they are available on the street.

One of the biggest things I'm hoping is that we are able to put music directly to MP3 players or memory sticks. That's going to be the next step in the process, where you don't actually have to burn it to a CD. Th e younger crowd, all of them carry MP3 players. They have them in their pockets when they come into the store, and I think that would be another advantage to where we could just load it directly to their MP3 player and cut out the cost of the burning and the jewel cases and stuff.

Myrick: It is moving and changing so fast it's hard for me to keep up with, because I'm from an older generation. Trying to keep up with the changes is mind-boggling sometimes, it really is. Just by the time you get everything set up, it changes again and then you have to do it a different way.

Christian Retailing: What advice would you give to retailers struggling with their music sales?

Williams: If you don't have digital, you need to get it in the door. Try to understand where the market is for your location. We are selling more and more accompaniment tracks. Somebody said that we live in a society of instant gratification. You really have to promote that to your customers, that we've got 10,000 accompaniment tracks that you can take home with you today. ... You really have to keep that in front of your customers. The buying public is interested in that immediate satisfaction, and we need to make sure they are getting that in our stores and not going to an online place to get the same thing.

Harrison: You do need to get the burn-on-demand. Customers appreciate being able to find (something) and get it right then and there rather than special-ordering it. Accompaniment tracks are something you might need immediately for a funeral and to be able to do it right there. I agree that the future is probably downloading directly to MP3 players.

Christian Retailing: How can suppliers help?

Myrick: Since the music industry is hurting so badly right now, it would be wonderful if they would come on with us and say, "We will give you incentives because you are selling our music without it having to ship, without a warehouse." Give us a better discount to move this music, so we can say, "If you come into our store and you burn it, you can get it for a little less than going online." If they would help us promote it and let us offer a better prices, it would probably increase their sales tremendously and they wouldn't have to keep the inventory. It costs a lot of money to warehouse all that stuff, so cut the warehousing and give us a better deal.

Williams: From one of the publishers, we are not seeing the new releases become available on the burn system until significantly after they are available on the shelf. I haven't been able to figure out why it's not to their advantage to be in place. The distributors, the publishers need to support this effort through making sure everything is available as quickly as possible on the release date.

I can envision in another two or three years when very few people are going to have hard CDs on the shelf, with the exception of some of the genres like Southern gospel. It's kind of frustrating to have customers come in and have tell them one new release we can burn today, but not another. Trying to explain that to the customer is a challenge, but I think the industry as a whole needs to climb onto this on-demand stuff.

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