By Martin Frascogna
American Apparel Clothing Company had the right idea when they teamed up with French Pop sensation Sebastian Tellier to release his American album a few years ago. Their 350 stores essentially became home as the exclusive retailer for Tellier. As this method of non-traditional retailer / music partnership isn’t the first of it’s kind it did help launch the growing trend of international globalization with music and retailers.
For retailers it isn’t all about the music (sorry musicians), as it is doubtful Tellier’s lack of popularity in the States suddenly drove boy shorts and tank top sales through the ceiling. American Apparel benefited from a market expansion, capitalizing on a sultry French singer to expand their sexy clothing, and to possibly generated income from wasted shelf space. Tellier on the other hand catapulted himself into a cutthroat American marketplace by having one of the most popular clothing stores vouch for him, essentially gaining instant credibility overnight.
This model is simple and fortunately becoming more maneuverable for musicians on all levels. As bands continue to fight the grind hoping for 2 inches of shelf space at Best Buy, adopting the Tellier model may prove more beneficial. Be smart, be productive, and follow the 3 ways to partner with a non-traditional retailer.
Music professionals fail to study the dim industry statistics. They are scary as hell, depressing, and make you want to switch careers. However buried deep in the gloom there is interesting information that provides hope. In 2008, the hierarchy of album sales read as expected: Mass merchants sold an overwhelming majority at 120 million units, chain stores came in second with over 115 units sold, non-traditional stores at 80 million, followed by the dying breed of indie stores at 20 million. 2009 paints an entirely different picture. Mass merchants have experienced an -18% drop, chains -23%, indies down -16%; but the non-traditional retailers gained +8%. In an industry that consistently feels a 30 to 40% punch to the gut year after year, any gain is worth noting. It’s even more interesting to note that the only real gains come from stores that don’t even specialize in selling music.
To make sure we’re all on the same page, just a quick synopsis. As discussed in a previous post – Why You Need a Record Deal – Nielson estimated about 105,000 releases in 2008 in which only 6000 of those albums sold 1000 or more. Mass merchant stores like Target, Walmart, Best Buy, etc. sell the most music in today’s marketplace (Walmart controlling 20%). On average these stores have about 750 different titles on hand. Clearly the slots are reserved for A-list artists who are not only on today’s top 100 list, but also the best selling artists of old who continue to spin a fan base. Further these mass merchants shelf albums as “loss leaders” which means they price music so low (ie: the artist, label, merchant make nothing), the merchant banks on drawing in customers who will buy additional store products outside of CD’s. This model, coupled with limited spots basically means it is damn near impossible to crack the mass merchant market and see a benefit. If you’re trying to crack this market as an unsigned band you might as well set your sights on becoming the King of England and marrying a Playboy Bunny as well. Good luck!
Chains stores, similar in many ways, tend to reserve their shelf space to musicians they are positive will sell. Because of the dying market, chains can’t afford to risk limited sales from an indie artist, as they can almost guarantee X amount of sales with a major musicians seeing their labels will pour millions into promotion. Chances you’ll crack the chain stores shelves, much like the mass merchants, sits around zero. As indie stores typically are more liberal with their music selection, their dwindling traffic almost demands guaranteed sales with Top 40 artists. You may be able to crack a few indie stores, however you can’t develop a career by nickeling a limited number of indie stores in order to carve a legitimate market. Gaining a sustainable career today means being extremely savvy in the market, innovative, and spreading out your album sales efforts. This includes both online sales and retail sales, however when it comes to retail sales it is best to focus on the non-traditional market. The non-traditional retail market simply refers to retail stores that don’t typically sell music. The non-traditional route can essentially kill two birds with one stone: first bird- you gain retail exposure, and two- you can potentially gain international exposure. Here are the ins and outs on making it happen.
1. First Build an Infrastructure
Bands typically try to enter the marketplace with a “we’re here and our album is done” type attitude. For the most part nobody gives a sh*t, as there are hundreds of thousands of “you” out there. To gain legitimacy you need an infrastructure. When you eventually partner with a retailer they want to know they’re not starting from scratch. Seeing benefit in an unknown band is unlikely. There is more risk involved, more energy and effort to take a band with zero album sales and benefit a business or retailer. Now if there is 500 sales, 1000, 2000+ plus there is something there to build on. The risk is lower, and energy can be expended on marketing/promoting the unique partnership as opposed to wasting energy on telling the world who you are. Further, infrastructure lets a retailer know you’re hardened, not scared to promote, and won’t rely on someone else to “sell” you. Hint- this is attractive to the business world!
2. Expand a Retailer’s Market Don’t Just Enhance it.
Non-traditional retailers know who their market is, as should bands. If the two groups share the same market it is unlikely a store will be attracted to a partnership as the band simply enhances their store. Stores are looking for expansion- help in capturing a new market while keeping their image in tact. For example: Chain store A who has 100 skateboard shop locations, attracts customers ages 13-18 who are punk rock listeners. The store is looking to expand into 20 new cities but wants to sustain customers for a longer period of time, 13-30. It isn’t in store A’s best interest to partner with a band that already shares these same market demographics as the partnership would only enhance the stores image. Store A stands to benefit by teaming with musicians that appeal to ages 19-30 in order to expand their brand. More than likely this will no longer be punk rock listeners, so Store A needs to capture a band who expands them into a 19-30 listener demographic. When it comes time to meet with non-traditional retailers it is important to focus on what you can do to “expand” their market. This isn’t difficult, rather takes some business detail in updating your bands market analysis and researching beforehand a target non-traditional retailers current market.
3. Think Global
More times then not, the best landscape for non-traditional expansion isn’t in your backyard. Global markets often benefit from global talent because it’s something new, edgy, and exotic that captures their local customers. As more brands are reaching far beyond their domestic boundaries, companies are looking for unique partnerships to help with this expansion. Further international talent can essentially be free because of the mutual benefit. Bands should be happy to potentially capture a new market without spending marketing dollars. Front-end money isn’t the motivating factor, rather sustainable album sales over time. The same applies to the non-traditional store. If the partnership doesn’t prove to benefit either party (1) there’s no love lost, (2) there’s no real money damage, and (3) there’s no social damage to the band because nobody in that particular market knew who you were in the first place. If you don’t have international business knowledge, nor know which stores to partner with, no worries. Non traditional retailer partnerships have advertising companies drooling. Identify the major players in advertising within your desired country, unleash your ideas, and they will be chomping at the bit to pick up a new account.
Written by Martin Frascogna for Music Globalization
The Hit Music Academy | 2010
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