Web proves ideal channel for music lovers - Brief Article

Discount Store News, Nov 22, 1999 by Faye Brookman

The future of in-store music sales could ring a sour note if consumers continue to flock to on-line sales. A study conducted for the on-line music industry by Greenfield Online found that people like buying music on the Web. While it's long been known that books and music are among the most commonly purchased items on line, the survey indicated just how much of a groove is being established. And not surprisingly, some of the music e-commerce sites are faring better than others.

Almost 60% of the 5,100 people surveyed had purchased music on line in the last three months. One-third of them shelled out $50 to $150 for the tunes. And most of those queried plan to spend even more in the future.

The good news for mass merchandisers is that on-line sales don't necessarily supplant instore purchases. Seventy-eight percent of those polled also shop and/or purchase in stores. More than half of the respondents had music buying patterns that combine on-line shopping and off-line purchasing.

Three Web sites dominate results--Amazon.com, CDNow and barnesandnoble.com. Forty-four percent have visited Amazon; 39%, CDNow; and 27%, barnesandnoble. The controversial mp3.com--which has technology for instant downloads over the Web--came in fourth with only 16% visiting the site. An obstacle for mp3 is that it isn't as easy to navigate as other music sites, the survey found.

In all, Greenfield studied 30 e-tailers selling music in regard to the shopping experience. Four in 10 on-line music shoppers put customer service at the top of their wish list from a site. Other factors driving cybersurfers to the music Web sites were search engines, banner/pop-up ads and word of mouth, the survey found.

On-line customers are price sensitive. Seventy-nine percent aid they'll find another on-line source if they can find an item cheaper.

The on-line music business, however, is losing shoppers who are upset over shipping fees. Nearly half of those who have abandoned on-line sales have done so because they don't want to spend the extra dollars. However, they are willing to spend more for the ability to create custom mixes of music.

Music has always been a sku-intensive category for mass marketers. And a great deal of space is needed to serve all customers' tastes. This survey suggests retailers might want to consider adding kiosks in stores when consumers could order music for delivery. The kiosk can have sound booth to sample the tunes. It also suggests that for merchants pursuing a clicks-and-mortar philosophy--both e-commerce and retail stores--music is a must for the Web site.

                Where on-line music shoppers are tuning in
Amazon.com         44%
CDNow              39%
barnesandnoble.com 27%
mp3.com            16%
Source: Greenfield Online