Whole Foods Moves Into Void Left By Starbucks

Grocery Chain Launches Artist Discovery Series With Greg Laswell

Posted by Charlie Moran on 05.02.08 @ 05:00 PM

The only music I've ever seen at a grocery store has been in those New Age CD displays, where you can push a picture of a waterfall and hear the sounds of rushing water or a photo of Machu Pichu and you hear Andean flute music. If you're crazy enough to like this sort of thing, you can pick up the CD and fill your home with mood music like a Glade plug-in. But besides that, who's shopping for music when they're busy squeezing tomatoes or ordering sliced deli meats?

Whole Foods thinks it knows the answer. Yesterday the grocery chain announced a new initiative with Inspire Entertainment to bring the first of what it hopes will be many hand-picked CDs to its stores. Apparently, there are already 130 stand-alone displays for music in the company's stores, and Whole Foods has been selling a small selection of discs at the check-out for some time now -- although SFS has never noticed them before. Inspire claims the displays have tripled music sales, although who knows the kind of scale that's on.

The first artist in the Whole Foods Artist Discovery Series will be Greg Laswell, currently signed to Vanguard Records, a historic indie label that was once the home to the Weavers and Paul Robeson. Laswell's second LP is due from Vanguard this July, but before then he'll drop the EP "How The Day Sounds," which will be sold in Whole Foods locations this month.

This news arrived within a week of Starbucks' announcement that it would be scaling back its Hear Music Label by handing off "day-to-day operations" to Concord Music Group, the indie label it's been working with. But, as opposed to Starbucks, Whole Foods doesn't appear to be entering the record business with its own label, and it's not clear if Laswell's new EP will be an exclusive in retail locations.

[Via Idolator]

7 Comments

By swag | Washington, DC May 5, 2008 01:21:58 pm:

Given that the typical Starbucks sold about 2, maybe 3, CDs a day tops ... what kind of massive "void" are we really talking about here?

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By charliefmoran | New York, NY May 5, 2008 02:51:50 pm:

Well, I never used the word "massive," and I don't think anyone could make the argument that if Starbucks disappeared from the music industry, it would go belly up. The "void" here is a non-music retailer with a large reach and enough cultural capital to build up a music presence in their stores like Starbucks has. And just because Whole Foods seems to be moving into that same space doesn't mean they'll fill it, either.

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By kohanmusic | Lake Success, NY May 5, 2008 10:25:25 pm:

I've maintained this for years. Supermarkets, drug chains, and specialty retailers can all find some benefit in stocking either custom or commercial music product... IF they know ahead of time that music will not be a high margin product in the chain's stores.

What music does so well at "non-trad. retail" is to help define a brand's lifestyle or fulfill the consumer's need to make as few shopping trips as possible - a major concern given the price of gas these days and our shrinking leisure time.

That neither the retail community nor the labels have been able to trumpet more success stories is just one more missed opportunity as music retail continues it's steady decline.

http://appetitefordisruption.typepad.com

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By DANA | BURBANK, CA May 6, 2008 02:45:00 pm:

Peter K, you are so right.

Swag...only about $4,434,750 annually for one chain of 270 stores. Pretty nice ancillary income for 1.5 -2 square feet of floor space.

Major labels don't 'get' nontrad.

Good for Inspire!

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By STUART | NEW YORK, NY May 6, 2008 06:09:40 pm:

I disagree that majors didn't get "non-trad". They did, and in fact, Peter K and I used to work together at one. But one problem was the mandate that labels -- not just special marketing divisions, but labels as a whole -- generate revenue from distribution. Because of this, they were forced to go out and plead with any retailer they could find to sell product as the inevitable march of digital music decimated traditional retailers such as Tower.

Shareholders demand to see sales increases. In its absence, market capitalization drops. So what were the labels to do? They had to find "non-trad" outlets for frontline product, but this ended up looking like we didn't "get it". It was a no-win situation for the majors.

Still, I agree, good for Inspire and anyone else who can sell a CD these days.

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By kohanmusic | Lake Success, NY May 7, 2008 12:13:00 am:

To follow up on my friend Stuart's point - there are a few factors to keep in mind:
1. The distribution companies themselves have not been adept at adhering to "non-trad" retailers' logistics demands. Many labels were - for whatever reason - ubale to accommodate EDI compatability.
2. Just about everyone working at labels right now is, to be frank, a credit whore. Everyone wants to be the guy or gal to bring in the deal to justify their continued employment and advancement. So you may have people fighting to force in inappropriate releases into particular "non-trad" accounts, and trying to do so weeks before and album's street date, while most retailers set their planograms MONTHS in advance. You have desperate label personnel trying to cram a round peg into a square hole... with the force of a sledgehammer. That isn't productive. 3. Labels are shedding personnel very rapidly, and turning their attention to digital and mobile (as they should) while their physical retail base has shrunk. But as this happens they are also, not so subtly, paying less attention to the distribution of physical product (and there are less people to offer the proper care and feeding at these new accounts to develop and grow).

And that's not even addressing price!

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By DANA | BURBANK, CA May 10, 2008 10:02:55 pm:

Hi Peter & Stuart. Thanks for your additional comments which, to be fair, were in order to add some perspective to a complex environment and why niche / nontraditional opportunities have been left by some entertainment companies for others to pursue.

Peter, I've appreciated perusing the various posts at Appetite for Disruption http://appetitefordisruption.typepad.com/. Your references to various nontrad and branded music opportunities still viable today are refreshing, especially in the wake of the ongoing torrent of articles reaffirming the death of the CD, its memorial service and funeral procession.

I don't for a minute discount the reports as unbelievable. However, opportunities remain in less-crowded (by the competition) and even some untapped brick-and-mortar environments for the nimble company that first understands exhaustive focus on a specific consumer group and marketplace, and is able to accommodate retailers' special needs in every area from product mix and merchandising, to billing and fulfillment.

For those suppliers that want to enter the contest for this piece of business, greater focus on the consumer can only be a good thing, but its sure to contribute to an even more competitive marketplace, if that's imaginable. I think challenging times may be just up ahead for some companies—many of which are nontrad by design—that have enjoyed a toehold in particular specialty retail environments. I expect new opportunities for some will become bad days for others.

That day in the future when plastic discs are nowhere to be found is undoubtedly on the horizon, but I think there are some good years left, although increasingly difficult ones for sure.

I do wonder, though, what strategies for turning this corner are being considered today in the board rooms of those companies whose core business teeters on the shelves of tens of thousands of interactive displays in the marketplace that are loaded down with those 'Best of' compilation CDs and instrumental collections of familiar tunes.

Regardless of whose prognosis you subscribe to, traditional and nontrad entertainment companies alike are scrambling to balance efforts in scaling back with efforts to retool for a business whose model remains pretty sketchy at best.

Warm regards;
Dana McElwain
Burbank, CA

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