Digital music distribution accounts for 69% of U.S. music revenues, first hal...
Crash Records Retail Marketing
1. 1
COURSE: BA (Hons) Marketing
MODULE TITLE: Retail Marketing
TUTOR: Sandy Ross
ASSIGNMENT: Crash Records Consultancy Report
WORD COUNT: 4,391
DATE OF SUBMISSION: 12th
January 2015
2. 2
1.0 Executive Summary
Thisconsultancyreportwascommissionedto analyse CrashRecords marketandcompetitive set.
The report isbasedon thoroughsecondaryandprimaryresearchidentifyingkeyissuesandmaking
recommendationsof the activitiesobserved.
Researchforthisreport includedthe creationof acomprehensive consumerreport,baseduponfive
mysteryshoppervisitstoCrashRecords.The reportincluded observationson store presentation,
merchandisingandbusinessaspectsof CrashRecords incomparisontotheircompetitor,Jumbo
Records.In orderto compare the two stores,three visitsweremade to JumboRecords.
Secondaryresearch wasconductedthrough databasessuchas Mintel, EBSCOand journalsthrough
the CIM andInternetRetailinggroups. MarketanalysiswasgatheredthroughMarketLine Advantage
and Keynote.
The most important external findingwasthatthere isstill amarketfor physical musicand that vinyl
salesare developing arevival inindependentrecordstores.The whole musicindustryispredictedby
Mintel (2014) to grow overthe nextfive years.Internal findings showedalongstandingcompetition
withJumboRecords where customersremainloyal totheirstore.However, neitherof the stores
offeredlittle differentiation.Alsofoundwasa non-functioningwebsite and, incomparison,apoorin
store atmosphere.
In orderfor Crashto resolve keyissuesfound,itisrecommendedthatthey:
Add second hand vinylto Crash’sproductlist.
Develop the websiteso purchasescan bemade through theonlinestoreand implement click
and collect service.
Improvetheinstoreinterior atmosphere.
AdvertiseCrash Recordsat local music events.
3. 3
Contents Page
1.0 Executive Summary p2
2.0 Introduction p4
2.1 Company Background p4
3.0 Secondary Research p5
3.1 Macro Environment p5
3.1.1 Market Analysis p5
3.1.1.1 The Vinyl Revival p6
3.1.2 PESTLE Analysis p7
3.2 Micro Environment p7
3.2.1 Competitor Analysis p7
3.2.1.1 Jumbo Records p7
3.2.2 Consumer Analysis p8
3.3 SWOT Summary p9
4.0 Marketing Mix p10
4.1 Product p10
4.2 Price p10
4.3 Promotion p11
4.4 Place p11
4.5 People p12
5.0 Primary Research p13
5.1 Crash high street store p13
5.2 Online store p14
5.3 Advertising p14
6.0 Recommendations p15
7.0 Conclusion p16
8.0 References p17
9.0 Appendix p19
9.1 Photographs & Screen shots p20
9.2 Tables p27
9.3 Text p31
4. 4
2.0 Introduction
2.1 Crash Records Background
Crash Recordshas beenapart of the Leedsmusicscene for25 years.Crash isan independentrecord
store that firstopenedonWoodhouse Lane in1985. Two yearslaterthe store movedto its present
locationonthe Headrow(CrashRecords,2014).
Crash sell arange of CDs, andvinyl (7”/12” singlesandLPs) and specialiseinindie,alternative,rock,
punkand metal.Asa ticketagentfor all the majorvenuesinthe area theyreceive allocationsfora
wide varietyof gigsandeventsinthe Leedsarea.Tickets can be purchasedoverthe counterinthe
shopor on the website.
5. 5
3.0 Secondary Research
3.1 Macro Environment
3.1.1 Market Analysis
The recordedmusicmarket - traditionallythe mostsignificantmusicsectoriscurrentlyexperiencing
a periodof long-termdecline.The decliningvalueof the recordedmusicsegmentislargely
attributable tothe transitionawayfromphysical musicformatsand towardscomparativelycheaper
downloads.
Illegal online file-sharinghashadanimpact onrevenuesinthe recordedmusicmarket,althoughthe
entertainmentindustryhassteppedupitseffortsintacklingthisissueinrecentyears.Despite the
overall decline,digital segmentshave remainedapositivefactorforrecordedmusic,withcontinued
annual growthinboth downloadingandmusicstreamingrevenue inrecentyears.Overthe next5
years,musicwill ultimatelyremainvital toUKconsumersasan aspect of theirlifestyles(Keynote,
2014).
Figure 1.0 showsthe predictedgrowthof total musicsalesfrom2014 to 2019. The growthin the
value of consumerexpenditureon musicispredictedtobe drivenmainlybythe live musicsector
and the continuedstrongperformance of the musical instrumentmarket.Recordedmusicislikelyto
struggle overthe next5 years,althoughthe developmentof digital downloadsandstreaming
servicescouldprovide growthtowardsthe endof the forecastperiod(Keynote,2014).
Thismarketdemonstratesthatnewformatsofferingdistinctadvantagestothe end -usercan
presentaseriousthreatto existingformats,evenwhere the latterischeaper.Inthe early1980s, CDs
were considerablymore expensivethanvinyl andcassette formats,andimposedsignificant
switchingcostsbecause CDplayerswere alsoveryexpensive.
Figure 1.0
Source:Mintel 2014
6. 6
Nevertheless,the newformatofferedgenuine advantagestothe consumer,suchas highquality
soundand resistance todegradationinnormal use.Thisledultimatelytothe complete collapse of
the pre -recorded cassette market,andrelegatedthe vinylalbumtoniche markets.Similarly,CDs
have beenlargelyreplacedbydigital downloads,because these offersignificantadvantages:e.g.the
abilitytopurchase individual tracks,andthe ease withwhichtheycanbe usedinportable MP3
playersandphones(MarketLine advantage,2014)
The speedwithwhichthe new,alternative formatsunderminedthe existingformat,sometimes
despite higherpricesandswitchingcosts,indicates thatbuyersfoundthe substituteshighly
advantageous(MarketLine advantage,2014).However,figure 1.1showsthat physical music still
makesup a higherpurchase percentage thanthatof digital.
3.1.1.1 Vinyl salesrevival
Accordingto figuresfromthe BritishPhonographicIndustry (BPI) andthe Official ChartsCompany,
Vinyl salesare at theirhighestlevelfor15 years. Justover780,000 vinyl albumswere soldin2013 –
the largestnumberssince 817,000 were soldin1997. The 2013 figure alsoconstitutesa 101 percent
rise on 2012 sales(Lachno,2014). This comesontop of a growth in vinyl salesfrom2008-2012 (see
figure 1.2).
Despite thisgrowth,vinyl LPscontinuestoaccountfor a minorproportionof the market,just0.8% in
the year endingSeptember2013 (Keynote,2014). Vinyl LPgrowthcame againstthe backdropof a
fallingalbumsalesmarket,whichreduced by1.5% inthe same period. While independentssoldonly
3.2% of all albumsinthe UK inthat period,theyaccountedformore than 50% of total vinyl album
sales(The Guardian,2013).
The rebirthof vinyl recordshas remainedagrowingtrendin2014 with more thanone millionvinyl
records beingsoldinthe UK so far thisyear (December2014) - the firsttime the milestone hasbeen
achievedsince 1996 (BBC,2014)
Figure 1.2: Trend insales
of vinyl albums 2008-
2012
Source:Mintel,2014
Figure 1.1
Source:Mintel 2014
7. 7
3.1.2 PESTLE Analysis
A PESTLE analysishasbeenconductedto analyse the macroenvironment(see appendix 9.2.4).The
keyfindingsestablishedwere the risinggrowthof digitalandstreamedmusicservices,whichare
soonto overtake CDas the mainmusicformat(Keynote,2014).HoweverimportantlyforCrash,vinyl
recordssaleshave beengrowingyear-on-yearsince 2008 (see figure 1.2) and live musicwill remaina
growingmarketthroughoutthe economicrecession (Keynote,2014);two markets inwhichCrash
operate.
3.2 Micro Environment
3.2.1 Competitor Analysis
In the UK there are 300 remainingindependentrecord stores (Topping,2013).Withinthe Leedsarea
there are 3 independentrecordstores; howeverintermsof competitors toCrashthese have been
reduced toone;JumboRecords.Thisis due to the third(RelicRecords) operatingthroughsecond
handvinyl whereasJumboandCrashsupplynew vinyl andothermediaplatforms. RelicandSpotify
have beenidentifiedtoCrashas indirectcompetitors(see appendix 9.3.1).
3.2.1.1 Jumbo Records
For justover43 years,JumboRecords has beensupplyingLeeds withmusic.HunterSmith opened
JumboinSeptember1971. Movingthrough shopsinQueen’sArcade andthe MerrionCentre,Jumbo
settledinthe topcornerof the St JohnsCentre in1988 (Leeds List,2014). Witha longstanding
historyinthe Leedsarea,Jumbo Recordshave amasseda loyal fanbase.
The store itself islarge (see appendix 9.1.1) andtherefore holdsalarge amountof stock withcaters
for a varietyof customer’s musical taste. Jumboalsooperatesanonlinestore ontheirwebsite
where customerscanbrowse andpurchase products. The major productssoldare CD & Vinyl (7”,
10” and LP),concert ticketsandmagazines/books.Ontopof this,Jumboalsosell merchandisedt-
shirtsas well asvinyl accessoriessuchascarry cases,slipmatsand cleaner.
Withthe vinyl marketbeinganiche (see figure1.1),promotionforthe store isn’ta necessity.Loyal
customersknowwhoandwhere theyare,whilstpotentialcustomerswouldbe gainedbywordof
mouthor by use of a searchengine.“Jumbohasbeenamecca for me for about20 years,from
visitingfromSheffieldasa studentinthe early90’s I now live withinwalkingdistance!Probably
explainsmypresence there atleastthree timesaweek.Testamenttothe friendlystaff” (Guardian,
2014).
As well ashavinggreatcustomerservice,Jumboalsousessocial mediaasa platformfor
advertisementandasa place to interactwiththeircustomers.Theyoperate aFacebook,Twitterand
Instagrampage for the store.These accountsare well managedandupdatesare providedwithlatest
stockings,offersandmusicinformation.
8. 8
Figure 1.3: Jumbo Location
Source:Google Maps
JumboRecordsislocatedinSt Johns,an indoorshoppingcentre incentral Leeds.WithinStJohns,
the store is locatedinthe uppercorner meaningitisnot in visiblesite of any potential footfall inthe
shoppingcentre.Jumboisnotwithinvisibilityof anypassingtrade,therefore Jumborelyontheir
loyal customerbase andpersonswhocome to St Johnswiththe intentionof visitingJumbo.
Crash Recordsiswithinwalkingdistance (seefigure 1.3) of Jumbowhichfurtherjustifies why ithas
beenidentifiedasakeycompetitor.
3.2.2 Consumer Analysis
Amongthose aged16 to 24, musicstreamingserviceswerethe mostpopularwayto consume
musical content(88%),followedbyadigital musiccollection(82%) andthena physical music
collection(63%).The opposite wasthe case amongthose aged35 andolder: physical music
collections(85%to91%) were mostpopular,followedbydigital music collections(67% to11 %) and
finallymusicstreamingservices(58%to7%). Take-upof physical musiccollections(72%),digital
musiccollections(70%) andmusicstreaming services(70%) amongthose aged25-34 were all at
similarlevels.
The table shownin the appendix 9.2.1 showsthe purchasersof physical musicfromhigh-street
shops(see appendix9.2.1).Penetrationof physical storesasthe mainmethodof musicpurchases
was at itshighestamongthe olderage bands — at 28.2% forthose aged55 to 64 and 28% for those
aged65 and over— due mainlytothe comparativelylow uptake of new technologiesassociated
Figure 1.4
Source:Ofcom,
2014
9. 9
withpeople withintheseage groups.Of particularsignificance isthe 3.8% penetrationrate exhibited
inthe 20 to 24 age band— a significantdroponthe 21.4% penetrationinthe 16to 19 age band and
representingthe second-lowestrate — suggestingdramatically higheruptake of new technologies
amongthisage group.(KeyNote,2014)
By social grade,those ingrade A and E accountedfor the highestand lowestratesof penetration —
at 32.9% and 17%, respectively,forhigh-streetstores asthe mainroute to musicpurchasing,while
penetrationamongthose inthe remaininggrades fluctuatedatarounda quarter. The presence of
childrenwithinahousehold alsohadanoticeable impact.Those witholderchildren(between10
and 15 yearsold) andthose withno childrenaccountedforthe highestrates of penetration,at
25.4% and 24.3%, respectively(KeyNote,2014); thusprovingthat a consumerof physical musicis
likelytohave alarge amount of disposable income.
3.3 SWOT summary
Showninthe appendix 9.2.3 the SWOT summorisesthe keystrengthsandweaknessesof the Crash’s
internal environmentanddetailsopportunitiesandthreatsfoundinthe external environment.
10. 10
4.0 Marketing mix
Significantcultural,social,demographic,political andeconomicinfluencesduringthe lastdecadesof
the 20th
century,combinedwithrapid technological advanceshave radicallytransformedthe
consumer's needs, nature andbehaviour.The new consumerhasbeendescribedasexistential, less
responsive totraditionalmarketingstimuli andlesssensitivetobrands andmarketingcueswhile the
influenceof familyorothertypesof reference groupsonthe new consumer'sbehaviourischanging
or diminishing(Christopher,1989).
More researchersshare the viewthatthe modern consumerisdifferent:demanding,individualistic,
involved,independent, betterinformedandmore critical (CaponandHulbert2000; Lewis and
Bridger2000).
Traditionally,considerationswere knownasthe 4 P’s- Product,Price,Place andPromotion.As
marketingbecame amore sophisticateddiscipline,afifth‘P’wasadded- People.Andrecentlytwo
further‘P’swere added,mainlyforservice industries- ProcessandPhysical evidence (CIM,2009).
4.1 Product
As a recordstore,Crash sell Vinyl (LP,10”& 7”) and CD. Theyare also an official ticketmerchant,
sellinggigticketsforeventsinthe Leedsarea. Otherproductsincludeoffical tshirtsandrecord
players.Thisisimmediatlyrecognisable uponlookingattheirstore window whichshowsall products
as well aslistingsof upcoming concertsinthe Leedsarea.The productrange isverysimilartotheir
maincompetitorJumbo(see section2.1) therefore intermsof productssoldthey have no
competitiveadvantage.
On some occassionsCrash’sstocklevelswereunabletomeetcustomersexpectations.Thiscouldbe
justifiedbythe size of the store and the fact that Crash can orderproducts infor customers.
Howeverforhighlydesireditems,Crashneedtoreevaluatecertainstockvolume.
4.2 Price
Crash offergoodvalue foran independentrecordstore;new vinyl releases are cheaperin
comparisonwithJumbo Records (see appendix9.1.2).The pricingstategyincludesproductline
pricing, andphyscological pricing.The price of physical musicisverysimilarinall musicretailers;
meaningcustomersare price sensitive,ithasan elasticprice.A small change inprice wouldmeana
change in salesvolume.
A small cornerof the store isdedicatedtosale items,howeverthe productswithinthe sale are there
for the purpose of liquidatingoldstockratherthanincreasingshorttermsale volumes.
In an interviewwithScottGamble,CrashRecordsmanager, said“We try and putour pricesas cheap
as possible butwe can’talwayscompete withplaceslike Amazonwhocanaffordtoput prices
lower.”(Personal communication, 13th
November2014) “I understandtimesare hardbutI hope
people wouldgiveusago first.We’re keenandwe have a good range of stockand provide an
experience we hope peoplewillenjoy.”
11. 11
4.3 Promotion
Crash’slargestpromotionof the yearis ‘Recordstore day’a day where recordsstore sell new rare
and limitededitionvinyl. Crashpromote andbuildupexcitementtothe eventthroughsocial media
posts,whichcreatesa hype andengagescustomers. The eventseesqueuesformingovernightin
orderto get theirmusthave items(see appendix 9.1.5).
Thisyear, Universal MusicUK offeredindependentmusicretailers aboostinthe formof 12 exclusive
vinyl releasestoroll outontotheirshelvesfromDecember1st
(UMusic,2014). Crashis one of the
120 participatingstoresinthe UK.The store has beenadvertisingthe promotionthroughdaily
Twitterupdates (see appendix9.1.3),theirwebsiteand alsohave a posteronthe store window (see
appendix 9.1.3:figure 5.2).Crash is the onlyrecordstore in Leedsthatistakingpart in the
promotion,meaningithasa competitive advantage andwillmaintaincustomerloyalty.
In store,Crashshowno attemptto getcustomersto follow themonsocial media.However,inorder
to see store promotions,the publicwill needtoalreadybe familiarwithCrashe.g.follow themon
Twitteror regularlyvisittheirwebsite asthisistheir maintool usedtocommunicate.Crashhave a
large followingonTwitterasthisiswhere all of the storespromotional eventsare communicated
(see appendix9.2.2).
4.4 Place
Crash islocatedon the LeedsHeadrow,aprime locationforpassingtrade inthe city centre (see
figure 2.0).The store iseasilyvisible forcustomerslookingtofindthe store (see appendix 9.1.4);the
yellowbannerdrawsattentiontothe store name and the displaywindow clearlyshowsthe products
offered.
Inside, the shopisnarrowwithCD’sand vinyl oneither side (seeappendix 9.1.4).Crashmake good
use of a small amountof space;products are dividedintoseparate stands withclothingoverhanging.
Recordplayersandaccessoriesare placedbehindthe till whichisonthe opposite endof the store
uponentry.
Creatingthe rightenvironmental settingisof prime importance forshopowners.Tocreate the
desiredambiance,lightingmaymake acontribution, butitisonlyone of numerous elementsthat
playa role,such as the furnishing andfinishesof the shop’sinterior, size, crowdednessandmusic
Figure 2.0
Source:Google Maps
12. 12
(Custersetal,2010). Atmosphere isseperatedintofourseparate elements;exterior,store layout,
interiorandinteriordisplays. Crash’sgeneralinteriorisdark,untidyandthe musicbeingplayedin
the store can onoccassionsbe loudand off-putting.Therefore the atmosphere createdcanbe
unpleasentfornewcustomers. Perceivedoverall atmosphere isthe overallimpressionof the store's
atmosphere asa pleasantorunpleasantplace toshop (Rayburn,2013). The store fittingsi.e.the
floorboards,musicstandsand wall panelsalsolookoldandworn.
Crash have an online website(www.crashrecords.co.uk).However, the website isnotmobile friendly
and manylinksdonot work. There has beenanundeniablechange inpeople’sbuying habitsin
recentyears.The way consumerschoose to buyand researchproducts isevolvingastechnology
does…Itistherefore essential thatretailers manage the customerjourneyseamlessly fromattention
to action,and engage with customersalongtheirpurchase journeys inapersonalisedandcontextual
way (InternetRetailing,2014). And with81% of retail marketersbelievingtheircustomerscaneasily
switchto competitors(InternetRetailing,2014) it isvitallyimportantforCrashto provide the service
experience theyofferinstore ontheir website.
4.5 People
The staff at Crashare friendlyandknowledgeable peopleinthe musicindustry. Withthe storesmain
customcomingthroughrepeatcustomers,the staff engage andofferapersonalisedservice toeach
individual. ResearchbyJulian&Ramaseshan(1994) foundgoodcustomerservice asessential for
relationshipretentionbetweenthe customerandthe retail business.Due tothe size of the store
there isusuallyonlyone memberof staff present,howevertheyare alwaysattentive andwillingto
offermusical suggestionstocustomers.
The staff use personal sellingasa tool to stimulate add-onsandinformcustomersof recommended
albumsandartists.Thisprovidesaproperlevel of customerservice andimproves/maintains
satisfaction.Itcreatesastrong engagementandmeansthe service ispersonalilsedtomeetthe
customers’needs.
Crash managersaid“It is upto the people.We offeraservice we feel isneededandthatwe feel we
do well withapersonal touch.Itisall todo withservices.” (Personalcommunication, 13th
November
2014).
13. 13
5.0 Primary Research and Findings
In orderto fullyunderstandCrash, primaryresearchwasundertaken.The store was visitedonfive
seperate occasionstocreate a comprehensive consumerreportdetailing presentation,
merchandisingandbusinessaspectsof Crash. Inadditiontothese observations threevisitstothe
competitorsstore (Jumbo) were made inorderto investigatethe problemsfound atCrashfurther.
The datesvisitedwere Recordstore day (RSD) (19/04/2014), Black Friday(28/11/2014), New album
release date (Oasis:Reissue(29/09/2014)), Saturdayafternoon(06/12/2014) and a Thursday
morning(13/11/2014).
5.1 Crash high streetstore
On RSD the eventseesqueuesformingovernightinorder toget theirmusthave items(see appendix
9.1.5). The exclusivityof certainitemsmeanthatstocklevelsare low andare soldon a firstcome
firstservedbasis.The store is hecticwithfive employeesworking tohelpcustomersinthe enclosed
environment(see appendix 9.1.5).
On a day withsuchexclusivityitisexpectedthatpersonswillmissoutoncertainproducts,however
on otheroccasionsvisitingCrash,customershave beenleftdissapointedwithitemssellingoutor
not beingavailable.Forexample on the 29/09/2014 Crash had 10 of the reissued‘Oasis:(What’sthe
Story) MorningGlory?’ in stock.By midday,the store hadsoldout.Employeesofferedcustomersthe
chance to order the vinyl intothe store,howeverthiswouldtake “4-5workingdays”.The majority
declinedthe offer,leavingthe store empty-handed.
Due to local competitionwithJumbobeingimportantitwasessential to‘shopthe competition’and
visittheirstore inorderto compare theirstocklevelsandproductrange.Uponobservationitwas
clearthat Jumbo’srange of vinyl was widerandtheyhad superioramountsof stock,thisisaidedby
the storeslargersize.Producttypesinthe two stores are the same althoughJumbo’srange is
greater. Therefore Crashneedanewproductrange to differentiate the twostores.
Crash offera goodservice forcustomers.Staff are friendlyandare willingtoengage inconversation.
On all store visitsstaff were participatingin discussionswithcustomers andwere especially more
engagingonthe Thurday morningvisitwhere the store hadnoother customers.
For newcustomers,the store can visuallylookdarkandold. Due tothe store doorand window being
coveredinstockand posters,little natural lightgetsin.Thiscreatesapoor atmosphere and
contributestothe customersperceptionsof the shop. In1997 three universitystudentsresearched
the effectsof store atmosphere oncustomers’moodandpuchase behaviour(see appendix 9.3.2).
Ultimatelyitwasfoundthatcustomersina positive atmosphere spent more onspontaneous
purchases. A poor atmosphere can shortenthe amountof time customersspendexperience
shoppingin the store.
On the contrary,visitingJumbo,the store isbright,cleanandwell aired.Onthe exterior,Jumbohas
no doorwhichis invitingtonewcustom (see appendix9.1.1).Consequentlyan improvedshopping
experience isneededby amendingtheirinterioratmosphereanddesign.
14. 14
5.2 Online Store
Online, CrashRecords customersare able topurchase ticketsand new invinyl & cd; a low total of 53
itemscombined (CrashRecords,2014). It was clearthat Crash’sonline stockingwaspoorbytyping
‘PinkFloyd- The EndlessRiver’(the fastestsellingvinylalbumof the century(NME,2014)) intothe
searchtool,the searcheris greetedwithnoresults.Thisisastage where potential custommaythen
visitcompetitors’website inordertomake a purchase.Incomparisonto Jumbo’swebsite orderscan
be made from a large back catalogue of albums.
At the headerof the online store Crashwrite “If there isa particular LP, 7" or 10" single youwould
like usto try and orderforyou the please email ‘crash@crashrecords.co.uk’andwe will getbackto
youon availabilityandprice.”Thiscreatesapersonal engagementhoweverlengthensthe time of
the sale beingmade andincreasesthe time forthe buyerto change theirmind. Thus,Crashneedto
offercustomersawiderstockrange onthe online store,shorteningthe lengthof the transaction.
More shoppersthaneverare likely totake advantage of clickandcollectthisyear (InternetRetailing,
2014).
5.3 Advertising
Both Crashand Jumbopride themselvesonthe historyandlongevity(Est.1985 & 1971 respectively)
therefore bothhave aloyal customerbase;makingitdifficultforeitherstore topoachcompetitors
custom. Consequently the mainimportance forCrashistotarget new andpotential customers.
CurrentlyCrash’s onlyformof advertisingrunsthroughtheirsocial mediapages,aplace that
communicateswithpersonsalreadyfamiliarwiththe store.Thismeansthattheyhave noformof
advertisinginplace totargetpossible/future custom.Asaresultof thisCrash needstoadvertise the
store in a waythat reachesitstarget market.
15. 15
6.0 Recommendations
Recommendationsmade have been tailoredupon tosolve the problems identified duringprimary
research. The recommendationswere developedthroughthe use of aTOWS matrix (see appendix
9.2.5).
Add second hand vinylto Crash’sproductlist.
Develop the websiteso purchasescan bemade through theonlinestoreand implement click
and collect service.
Improvetheinstoreinterior atmosphere.
Sponsorlocalmusic events.
Firstly, itissuggestedthatCrashbegina new productrange of secondhandvinyl.Aftervisiting
Jumboitwas clearthat the twostoressold alike products;itistherefore recommendedthatCrash
offera newproductline inorderto differentiate themselvesfrom theircompetitor. The second
handmarket isgrowing(see appendix 9.3.3) andit will provideawiderrange of productto Crash.
Due to the size in store at Crash,the venture willbe more prominentonthe storeswebsite however
some stockwill be presented instore.
Withinthe changesto the website, itisadvisedthatCrashupdate theironline musiccatalogue with
more productslistedwithdescriptionsandpricings.Itisalso suggestedthataclickand collect
feature isimplemented. Click-and-collectorderswill make up15% of all internetretail salesof
physical productsby value in2014, up 12% from2013 (Mintel,2014). Such a feature wouldbe more
beneficial toCrashthan the current scheme as itmakesthe purchase processquickerforthe buyer.
Local competitionis importanttoCrash,andtheyneedtoenhance theirshoppingexperience and
image inorderto capture customersfrom Jumboandappeal to new persons.Itisproposedthat
Crash improvesits shoppingexperience by developingitsinterioratmosphere.Thisincludes
renovatingthe shopwallsandproductstandsas well aslettingmore natural lightinthroughthe
glassdoor andshop window.Renovationandbrightercolours are twoof the changesmade to the
experimentedstore (seeappendix 9.3.2).Ontopof these changes, the musicbeingplayedinstore
shouldbe lowered tomake customersfeelmore comfortable shoppingatCrash.These changeswill
revitalisethe storesimage andgive buyersamodern place toshop.
Finally, Crashshouldidentifyspecificcustomersegmentsanddeployunique strategiestoaddress
the desiresof those segmentsratherthanamass market.This createsa highlevel of loyaltyand
shieldsretailersfrommore conventional competitors(HMV andAmazon). A recommended
approach to doingsowouldbe to sponsorlocal musiceventsinvenuesforwhichCrashsellstickets
for example Brudenell SocialClubandBelgrave MusicHall.Advertisingatsuchvenueswouldreach
Crash’sdemographicinone setting.
16. 16
7.0 Conclusion
To conclude, Crashare ina marketin whichdigital formatsavailable are growinginsize,alarge
threatto the store.HoweverthroughCrash’sloyal customersandthe attitudestowardsphysical
music,Crashwill remainasuccessful store.
As detailedinthe report,recommendationshave beenmade inordertoimprove the current
customersexperiencebyimprovingthe instore atmosphere anddevelopingthe website. Inorderto
differentiateCrashfromtheircompetitorthe productextensionintosecondhandvinyl willbe made.
Andfinallytogainpotential custom,Crashwill sponsorlocal musicevents.
17. 17
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19. 19
9.0 Appendix
9.1 Photos
9.1.1 JumboRecords
9.1.2 Crash and Jumboprice comparison
9.1.3 Promotions
9.1.4 Crash Records
9.1.5 RecordStore Day
9.2 Tables
9.2.1 Purchasersof musicfrom high-streetshops
9.2.2 Social Mediafollowing
9.2.3 SWOT summary
9.2.4 PESTLE analysis
9.2.5 TOWS Matrix
9.3 Text
9.3.1 Indirectcompetitors
9.3.2 Store atmosphere
9.3.3 Second-Handgoods
9.3.4 Customerreviews
25. 25
9.1.4 Crash Records
8.1.5 Record Store Day 2014
Figure 6.1: Crash Recordsexterior
Figure 6.2: Crash Recordsinterior
Figure 7.1: Record store day
queue 07:00 a.m.
26. 26
Figure 7.2: Record store day
window promotion
Figure 7.3: Record store dayin
store Crash
27. 27
9.2 Tables
9.2.1 Purchasers of music from high-streetshops(Keynote,2014)
9.2.2 Social MediaFollowing:
Crash Records Jumbo Records
Facebook 4,422 5,783
Twitter 17.4k 12.8k
Instagram - 626
28. 28
As shownintable 9.2.2, bothstoreshave a good followingonFacebookandTwitter.Crashhasover
4,000 more followersonTwitter;asocial platformwhichbothstoresuse more frequently.Thisisa
large advantage forCrash as newsandstock informationwill reachagreateramountof people.
9.2.3 SWOT
STRENGTHS WEAKNESSES
1. Good reviews online (see appendix 9.3.4)
2. Large amount of followers on Twitter and
likes on Facebook.
3. Strong and frequent interaction with
consumers on social media.
4. Dedicated staff with good customer
service.
5. Crash has a good location in Leeds City
Centre.
6. Loyal customers due to the rarity of
independent record stores.
1. Small store in comparison to Jumbo.
2. Little promotional offers to entice
customers.
3. Hard to poach custom from competitors.
4. High competition with Jumbo Records.
5. Competition holds a wider variety of stock
in store.
6. Some of the website links do not function.
7. The website is not mobile compatible,
alienating a large demographic
OPPORTUNITIES THREATS
1. Live music will remain a growing market.
2. The second-hand goods market is growing.
3. The competitions online store makes it
possible for customers to make purchases
from a large back catalogue of products.
4. More shoppers than ever are likely to take
advantage of click and collect this year.
1. Music streaming services have shown the
most significant growth in the recorded
music market since 2010.
2. Digital music is predicted to exceed
demand of physical music.
3. Illegal file sharing is having a negative
effect on the recorded music market.
29. 9.2.4 PESTLE Analysis
PESTLE Factor Overview Impact and Importance
Factor How the factor could potentially effect Crash Records Time Frame Opportunity or Threat Potential Impact Importance
Economic The number of high-street independent record outlets
has slumped from 2,000 to just 300 over the past two
decades (The Independent, 2013).
Medium Threat High Medium
Economic Estimates for live music suggest a growing market
throughout the economic recession (Keynote, 2014).
Long Opportunity High Medium
Social More than 1 million vinyl records sold in the UK so far
this year (December 2014) - the first time the milestone
has been achieved since 1996 (BBC, 2014).
Short Opportunity High High
Social Over the next 5 years, music will ultimately remain vital
to UK consumersas an aspectof theirlifestyles(Keynote,
2014).
Medium Opportunity Medium Low
Social Vinyl buyers are willing to scour second-hand stores to
make purchases (BPI, 2013).
Medium Opportunity Medium High
Technological Since 2010, music streaming services — both paid
subscription and ‘advertisement-supported’ — have
represented the most significant area of growth for
recorded music (Keynote, 2014).
Long Threat Medium Low
Technological Since 2003 the market for music downloads has grown
significantly year-on-year, and is expected to overtake
the CD as the mainmusicformatover the next few years
(KeyNote, 2014).
Long Threat Medium Low
Legal The National minimum wage for over 21 year olds is
£6.50 (Gov UK, 2014).
Long Threat High High
30. 30
9.2.5 TOWS Matrix
STRENGTHS
1. Good reviews online
2. Large amount of followers on
Twitter and likes on Facebook.
3. Strongand frequent interaction
with consumers on social
media.
4. Dedicated staff with good
customer service.
5. Crash has a good location in
Leeds City Centre.
6. Loyal customers due to the
rarity of independent record
stores.
WEAKNESSES
1. Small store in comparison to
Jumbo.
2. Little promotional offers to
entice customers.
3. Hard to poach custom from
competitors.
4. HighcompetitionwithJumbo
Records.
5. Competition holds a wider
variety of stock in store.
6. Some of the website links do
not function.
7. The website is not mobile
compatible.
8. In store atmosphere is poor.
OPPORTUNITIES
1. Live music will remain a
growing market.
2. The second-hand goods
market is growing.
3. The competitionsonline store
makes it possible for
customerstomake purchases
from a large back catalogue
of products.
4. More shoppers than ever are
likely to take advantage of
click and collect this year.
(SO) RECOMMENDATIONS
Sponsor local music events (S5, S6,
O1)
(WO) RECOMMENDATIONS
Add second hand vinyl to Crash’s
product list (W3, W4, W5, O2)
Developthe website sopurchasescan
be made through the online store
(W1, W4, W5, W6, W7, O3)
Implement a click and collect service
(W1, W4, W5, O4)
THREATS
1. Music streaming services have
shown the most significant
growth in the recorded music
market since 2010.
2. Digital music is predicted to
exceed demand of physical
music.
3. Illegal file sharing is having a
negative effect on the recorded
music market.
(ST) RECOMMENDATIONS
Maintain the high level of service to
dissuade customersfrom choosing to
intake theirmusicdigitally (S1, S3, S4,
T1, T2, T3)
(WT) RECOMMENDATIONS
Improve the instore interior
atmosphere (W4, W8, T1, T2, T3)
31. 31
9.3 Text
9.3.1 Indirect Competitors
9.3.1.1 RelicRecords
RelicRecordswebsite claimsthattheyare part of the Leeds“vinyl triangle”alongwithCrashand
Jumbo. Locatedon one of Leedsbusieststreetsopposite the GrandTheatre,RelicsRecordshasbeen
buyingand sellingvintageandcollectorsrecordssince 1991.
The 1500sq ft store ispackedwithover25,000 vinyl,10,000 CD’s and1,000 DVD’s.RelicRecordsalso
operatessalesonAmazonand EBay, butdo not have theirownstore on the website.
Relic’sdifference incomparisontothe otherrecordstoresisthat all itsproducts are rare and vintage
secondhand;unlike CrashandJumbowhosell onthe basisof new musicreleases.
9.3.1.2 Spotify
“SpotifyLimited(Spotifyor"the company"),launchedin2006, isa providerof digital music-
streamingservices,withacatalogue of approximately20millionsongs,whichcanbe searchedunder
a numberof differentterms.
The company allowson-demandaccesstomusicfromvariousmajorrecord labelsonavarietyof
devices includingmobilephones,personalcomputersandtablets.
Spotifyoffersafree service supportedbyadvertisinganda premiumsubscriptionservice,which
removesadvertisementsandallowsuserstodownloadmusic.Registeredusersare able tointegrate
theiraccountswithsocial mediaapplications.
The company paysartists,viarecord companies’,royaltiesforall musicstreamedonthe website.”
(MarketLine advantage,2014)
9.3.2 Store atmosphere, mood and purchasing behaviour (Spies,Hesse & Loesch,1997)
“The effectsof store characteristicsoncustomers'mood,ontheirsatisfaction,andontheir
purchasingbehaviourare investigated.Twofurniturestoresdifferingwithregardtotheir
atmosphere,i.e.theircondition,informationrate andlayout,were selected.Customers'mood –
measuredatthe beginning,inthe middleandatthe endof theirshopping –was shownto improve
inthe pleasantandtodeteriorate inthe lesspleasantstore.Satisfactionwiththe store wasgreater
inthe pleasantstore.Regressionanalysesshowedthatthiswasdue toa directeffectof store
atmosphere aswell asto an indirecteffectmediatedbycustomers'mood.Customersinthe pleasant
store spontaneouslyspentmore moneyonarticlestheysimplyliked.Thiseffectwasonly due to
customers'mood.”
“There were,differencesbetweenthe twostoreswithrespecttostore atmosphere,operationalized
as the store'scondition,itslayoutandthe informationrate.Store A hadbeenrenovatedin1992, i.e.
one yearbefore the investigationtookplace.The entrance areawaswide andbrightwithplentyof
natural light.The wallswere paintedinwhiteandthe lightingwaswell-planned.Store B,onthe
otherhand,showedmanysignsof deterioration.Wallswere paintedindimcolourswhich,aboveall,
made the ceilingslookparticularlylow.Lighting,brightness,coloursandheightare consideredtobe
importantfeaturescreatingstore atmosphere (e.g. Buckley, 1987).”
“With respecttopurchasingbehavior,itcouldbe shownthatstore atmosphere didnotaffectthe
total amountof moneyspentbutonlythe amountof moneyspentforspontaneouspurchases.
32. 32
Customersspentmore moneyforspontaneouspurchasesinthe pleasantcomparedtothe less
pleasantstore.Thisisinaccordance with Donovan andRossiter(1982), Donovan etal.
(1994)or ShermanandSmith(1987)who foundthatcustomersina positive moodboughtmore
itemsandspentmore moneythanwas originallyplanned.Inthe presentstudy,the effectof store
atmosphere wascompletelycoupledwithmood-effects,i.e.therewasnospecificeffectof store
atmosphere alone.”(Spies,Hesse&Loesch,1997).
9.3.3 Second-Hand Goods
Between2008 and 2012, the numberof enterprisesengagedinretail sale of second-hand
goodsin storesdecreasedby5.4%,fallingfrom4,054 to 3,834.
The turnoverof the sectorreached£2.36bn in2012, whichisup by 17.6% from£2.01bn in
2008.
The sector’sgross value addedisupby 23.5%, from £702m in 2008 to £867m in2012.
Total purchasesmade bythe sectorhave risenby 7.3% between2008 and 2012, from
£1.24bn to £1.33bn.
33. 33
Total acquisitionsare upby 102.6% between2008 and 2012, from £39m to £79m, while
overthe same perioddisposalsare upby45%, from£20m to £29m.
9.3.4 Customer reviews
Crash customerquotes “Crashisanotherof Leeds'greatindie stores.Asmentionedprior,theysell a
large range of CDs, Vinyl,DVDsandotherrelateditems. The shopmaybe a bit of a squeeze butif
youare a musicloverthatwon'tget inthe way of raking throughtheirstock.”
“As a store it's small butperfectlyformed,floortoceilingandall available space inbetweenisfilled
withmusicineithervinyl orCD format…Andwhilstit'snotas bigas JumboRecords,itoffersmean
competition.”(Yelp,2014).