Be everywhere - music distribution's lessons for retail


Music distribution seems to be coming to the end of a long and disruptive period of change. What lessons can retailers take from the dramatic changes that this industry has undergone? This article is part of Retail NZ's Future of Retail series, examining the trends and innovations that are changing the way we shop in New Zealand.

Online shopping presents consumers with a bewildering array of choices, and it can be hard for retailers to connect with consumers. There's a battle unfolding for the title of dominant retail sales platform of the future, which is very similar to the battle that occurred in music distribution. For smaller retailers, the lessons learnt from the changes to music distribution is to 'be everywhere' on the Internet: ubiquity really matters.

When most consumers shifted to consuming media digitally and Internet speeds became fast enough to allow music streaming to become mainstream, a plethora of online platforms sprung up promising to cater to a listener's every need. It quickly become clear people didn't want to go to many different places for their music. They wanted a one stop shop that was simple to use and had everything they wanted to listen to. Just a few of the largest and best platforms have survived and most consumers have chosen one place that they go to to find their music. A similar battle is still underway for film and television distribution.

Ultimately, our lives are busy enough. We don't have time to download multiple apps, or weigh up the pros and cons of each streaming service. And when we get onto an app, we want to enjoy music without making new decisions about what to listen to or being interrupted by ads.

Simplification helps avoid 'choice overload'

When we are constantly faced with an array of options psychologists call 'choice overload'. It has been associated with unhappiness, decision fatigue, going with the default option and avoiding making a decision altogether. Simplification of choice is part of what makes a music streaming platform stand out, and this is likely to be a key trend for retailers and sales platforms in the future too.

Theoretically shoppers have almost every shop in the world available to them online. While on the face of it this seems like a great scenario, in reality it can be pretty bewildering and complex. It can actually be quite difficult for a consumer with a product in mind to quickly and simply sit down and buy it online. Most will want to research the available brands, models, styles and sizes. They need to find a retailer that stocks the chosen product and at the right price. They might be concerned about whether the site is trustworthy, or how long the goods might take to arrive (if the site ships to New Zealand at all). All of this takes time and, for me anyway, often leads to 'choice overload'.

In the new world of online music streaming, an independent artist's best chance of maximising profits was to 'be everywhere'; to make best efforts to have their music on every platform and website so that they could be wherever a potential listener was seeking them out.

Small retailers are like independent musicians

When we look at our online retail landscape it seems that small retailers are faced with a similar situation to an independent musician. They might have the most beautiful website in the world, but it is very difficult to make it stand out from the crowd, or even to be found by potential shoppers. Is using sales platforms like Trade Me, eBay, Amazon or others to reach a bigger audience a good bet? And, is it a given that Amazon is 'The' platform, or should retailers be trying to 'be everywhere' too.

While we are in this period of change and as online shopping grows and changes, the answer is, yes, retailers need to be everywhere that their customers are. Sales platforms, aggregators or price comparison sites should not be seen as a threat, but an opportunity to have your offering viewed alongside others and in front of a much larger audience than can be achieved on your own.

This doesn't necessarily mean you have to have the lowest price to attract sales. For future shoppers this might not be the most important proposition. Do they know who you are, trust your brand, and do you have the product instore and ready to ship? These will also be important considerations.

The best platforms are uncluttered, easy to navigate and build trust

The changes to music distribution show that the best platforms are clear and uncluttered, easy to navigate, and build trust. But most importantly they are comprehensive, meaning consumers find what they need, and they are clever, meaning that consumers stay because they are continually offered suggestions of new things that they really do like.

In New Zealand it isn't clear that there is a sales platform that solves this problem yet. Perhaps Amazon is the answer: it certainly has the scale and is dominating overseas markets. With about 50 per cent of its sales being from third party sellers this presents a huge opportunity for small retailers. Being on the Amazon platform is likely to become an important new sales channel.

Another important lesson from music distribution is that consumers do care that platforms behave in an ethical and responsible way. This can be seen in the backlashes over multinational tax avoidance and whether platforms were rewarding artists fairly for their content.

Being everywhere doesn't just mean sales platforms. Being easy to find online means having a comprehensive and up to date online presence - be it on social media or Google maps. If someone is looking for you, or the products you stock, you should be as easy as possible to find. A recent survey in the US found that 81 per cent of shoppers look at products online before purchasing and 60 per cent started with a search engine before heading to a specific website. A retailers needs to be online to be included in the everyday consumer's consideration.

The future of retail is still unclear but consumers have shown us their preferences in the world of online music streaming. Make choices simple and be everywhere are two key lesson for retailers of the future.

by Scott Fisher, Retail NZ CEO

Originally published in the February/March 2018 edition of the NZ Retail magazine.