Getting Some Jams to Go With the Groceries
If British businessman Michael Rigby has his way, grocery shoppers across the United States will soon be able to pick up Korn with their peas, 2Pac with their six-pack and Pearl Jam with their peanut butter.
Rigby, a veteran of nearly two decades in retail record sales, thinks it’s time for supermarkets to become a player in the $12-billion-a-year U.S. record business.
Though records are already sold on a limited basis in some grocery stores, including selected Ralphs markets in Southern California, Rigby’s aim is to take the idea a giant leap further by making more than 100,000 titles available with the touch of a finger at some 2,000 markets from coast to coast.
And Rigby, president of an upstart Virginia company called Fresh Picks, thinks he has one strong weapon on his side: customer convenience.
“All the specialty music retailers today are trying to woo customers into their stores, but they don’t want to go,” says Rigby, noting that giant discounters such as Wal-Mart and Best Buy have siphoned a large portion of the business from record retailers in recent years. “People are very time-pressured and want to reduce the number of stores they go to, not increase them.
“What we’re doing is recognizing that and taking the music to where the customers already are.”
One reason for Rigby’s optimism is the growth of record sales in supermarkets in Europe. In Britain, for instance, it has taken only two years for supermarket chains to capture 12% of the record business, according to Billboard magazine. In France, reports Billboard, the supermarket take is more than 50%.
Similarly, U.S. supermarkets have secured 12% of the nation’s $7.5-billion video sell-through market, according to a survey conducted by the National Assn. of Recording Merchandisers.
Dan Alaimo, who tracks the entertainment software industry for the trade publication Supermarket News, says the timing is right for Fresh Picks.
“Supermarkets are finding success with similar products, such as sell-through videos,” he said, “and Fresh Picks’ system is very well thought out. Provided that Rigby can get retailers to buy into it, he has a good chance to succeed.”
Gary Arnold, vice president of marketing for the 272-store Best Buy chain, also predicts big things for Fresh Picks, provided the company makes the right moves.
“If they tailor their strategy toward mass-appeal items and convenience,” he says, “I have every reason to believe they’re going to move some records.”
But Stan Goman, senior vice president for Tower Records, scoffs at the idea.
“Been there, done that,” Goman says. “Tower Records actually pioneered that concept back in 1952. It didn’t work then, and it probably won’t work now.”
Introduced last week at a Star Market in Brighton, Mass., Fresh Picks is off to a promising start, according to Carole Gates, executive vice president of marketing for the 48-store Massachusetts supermarket chain.
“The feedback from consumers has been tremendous,” she says. “People love the one-stop shopping convenience, and Fresh Picks provides our stores with a sense of fun and excitement. It’s a very interactive system, and consumers love it.”
In addition to more than 600 CD titles on site, Fresh Picks’ in-store display units include listening stations and special-order kiosks that make virtually any record in circulation available to consumers. It will be up to the individual chains to decide if they want to stock albums that carry parental-advisory stickers.
Rigby, whose goal is to build Fresh Picks into a $1-billion-a-year company within the next five years, says his prices will be competitive with specialty record retailers but won’t be as low as the big discounters. At Star Market, new single-disc titles are sold for $13.99-$14.99, with older catalog records going for $9.99-$15.99.
“We believe there is a premium for the convenience,” Rigby says. “If I’m in the supermarket and I see that Fresh Picks has the new U2 album for $13.99, I’m not going to get back into my car and travel over to Best Buy to save a dollar.”
The roll-out of Rigby’s plan comes during a period when the record industry is searching for ways to boost sales, which have been flat for three years. Consumers are unhappy with traditional music outlets because of their “sterile” environment and “inhospitable” sales people, according to a recent survey by the Recording Industry Assn. of America, a trade association that represents the nation’s record conglomerates.
“We’re going to see a lot more of this in the future, and I certainly welcome it,” says Jason Whittington, head of sales at Geffen Records. “You’re putting records into a spot where people are going for other means, and if you can put the product in their face, you’ve got a good chance of getting them to actually pick up on something. It’s a great idea.”
Rigby, a graduate of the London School of Economics, says Fresh Picks’ special-order kiosks give the company an added edge over traditional record stores.
“If somebody wants an old Buddy Guy or Led Zeppelin album, they can order it and, the next time they’re in the supermarket, they can pick it up,” the executive says. “If you do that at a Best Buy or a Tower, you’ve already gone out of your way once to get there before finding out they didn’t have what you wanted. Then, if you place an order, you’re committing yourself to go out of your way again.”
