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Selling CDs in the iPod-era
The sales are decreasing. No one buys CDs anymore. Its the iPod era. People just download individual songs online - either buying them for 99 cents or pirating them for free. But no one buys entire albums and CDs these days.Like all other stores that sells music CDs, sales at Scotti's record shops in New Jersey were declining too. But unlike most other music shops, Scotti's did something about the situation. Something rather brilliant to get people to buy the CDs and keep coming back to the shops again and again.
What did Scotti's do to increase CD sales?
They came up with ""Buy It, Burn It, Return It" policy. Customers can buy a used or new CD, take it home, listen and, if they want, burn a copy to a computer. Within 10 days, they can return the CD for 70% store credit."
Isn't that a cool idea? Sales increase because people can now rip entire CDs for 30% cost. They could even buy second hand CDs at a lower cost. And because they only get store credit, they have to come back again and again to the same store for music.
Scotti's did get in some trouble with RIAA because of their "Buy it, Burn it, Return it" policy. They are in discussions with RIAA as this post is being written. I'm not sure if they'll be allowed to continue this policy or not.
The startup journal reports more...
I'm no lawyer, but could there be a simple solution for Scotti's? Like just removing the words "burn it" from the policy? Buying back CDs is not illegal. And selling second hand CDs is not illegal either. At least as far as I know...
(btw, as previously covered in Marketing Hotsheet # 22, Paradise bookstore - a chain of bookstores found in many airports across America - does the same thing with books. If you buy a book from paradise bookstores, they would staple a receipt with it. You could return that book with the receipt within 6 months for 50% store credit to any other Paradise bookstores in any airport in America. Paradise bookstores also gives away free bookmarks with all their books. These bookmarks note the airports and the terminals where you could find other Paradise stores.)
Action Summary (taken from Paradise Bookstores case study in Marketing Hotsheet # 22):
- If your products have good demand in the second hand market, why not start purchasing them from your clients who want to trade up?
- You could buy them back at a lower price if the client saves his receipt, and thus make sure that your clients come to you instead of going to your competition when they make their next purchase.
- You could also attract a whole new target market: people who wouldn’t mind paying less money for a second hand product.
- Make sure you give away your brochures with every product you sell. Brochures are not as useful as bookmarks, and will be thrown away many a times. But many people might also save them, and remember you the next time they need to buy something.
Email Post to a friendPosted on 10/14/2005 | Permalink | |
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