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Shop Rock: How Music Streaming is Transforming the Experiential Retail Movement

By Andreas Liffgarden, Founder & Chairman, Soundtrack Your Brand

In the immortal words of David Byrne, “with music, you often don’t have to translate it. It just affects you, and you don’t know why.” This holds just as true for someone listening closely to a beloved album in their home as it does to someone soaking up ambient noise while out shopping. Study after study has found that playing music in stores has a dramatic impact on consumers and buying behavior, which is why retail is poised to become the next big channel that will connect brands with fans.  

Let the Rhythm Guide You

In 2008, a study from out of the University of Nebraska-Lincoln found that when customers hear upbeat and popular music, they are more likely to make a purchase. Another study from Karlstad University in Sweden found that music can boost the amount of money shoppers spend in the store, as well as their intent to return. It’s no secret that music is a critical part of how businesses strive to cultivate an atmosphere that engages their customers, which is why music is now such a standard part of the shopping experience with 90 percent of retailers playing music in stores.*

However, most brands remain stuck in the Dark Ages. Two-thirds of the music you hear in stores comes from CDs and satellites — that’s right, those little metallic disks that are now mostly used to keep pests out of gardens or as quirky decorations. Multinational corporations still send physical CDs to their stores every week that end up playing on loop, with no consideration given to what’s trending or popular for that region.

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This shift of music distribution from CDs to digital means that retailers, of all sizes, can take advantage of these opportunities easily and affordably. At the same time, retail distribution presents exciting opportunities for music producers, creating a win-win-win situation for everyone involved.

Movement Toward Experiential Retail

Today, the nature of retail is changing. The industry is moving towards “experiential retail” where fans can immerse themselves in brands and vice versa. Millennials—who have overtaken boomers with an estimated $200 billion in purchasing powerare not influenced by advertising and seek out “authentic” experiences. They want to feel connected to the brands that they patronize, meaning they want those brands to reflect their values and lifestyle.

This has profound implications for retailers who have to find ways to meaningfully engage their customers in-person. Large mega-brands, like McDonald’s, Walmart and Target, are investing heavily in technology to make their in-store experiences compelling to this younger generation.

Music is a critical part of this process, setting the tone for a customer from the second they walk in the door. For example, McDonald’s now plays upbeat pop music on weekend nights when it is primarily patronized by teens. Or take the Four Seasons Vancouver, which ditched jazz music in its lobby in favor of popular indie tracks in an effort to keep the brand “interesting” (read: relevant).

There are a myriad of benefits of streaming digital music for Mom and Pop shops as well. Digital B2C music platforms, like Spotify, Pandora, and Tidal, contain huge datasets with user taste profiles and listening habits. This is invaluable to small-to-mid sized retailers who are looking for ways to stand out and ensure that right music is being played that reflects their unique culture and identity.

Musicians And Their Fans

Thanks to the internet, more music is being produced today than ever before. This makes it more difficult and complex than ever before for musicians to get their music in front of fans. Music marketing is no longer just about getting FM radio plays, and artists and labels are actively searching for new marketing tools and channels to reach an ever-elusive audience.

Consider the fact that large mega-brands often reach up to 80-90 percent of a population. When you combine retail with hospitality, the reach is several times larger than the entire population, and many, many times larger than any commercial radio station. Having their song played by a national brand with a huge reach could represent a major break for up-and-coming musicians.

And of course, customers are happier when the stores they visit play more diverse, interesting music. New digital streaming services can serve as a virtual DJ in every store. Using customer data, stores can hyper-target customers based on their listening habits, as well as geography and times of day, so fans can listen to what’s trending and cool in their region. Thus shopping becomes an opportunity for music discovery and the whole experience becomes more pleasant. This extends to happier employees too, which Walmart addressed by removing Celine Dion and Justin Bieber from the loop of songs that left workers anguished.

The Right Music at the Right Time

For all these reasons, the strongest opportunity to connect brands and fans I believe will prevail at the physical store level, where music streaming is yet another aspect of the broader move toward experiential retail. Timing is everything, and music, technology and retail are on an inevitable collision course.

The absence of high speed internet in stores contributed to retail music being stuck in the 80s, but with internet speeds up and costs down, digitization in the retail environment is now commonplace. And thanks to the popularity of streaming services that paved the way from a music rights perspective, and real-time use of data to hyper target what in store customers want to hear, the time is right for retail to become the Next Big Thing for music.

Would love to hear your comments or your thoughts below or tweet me at @liffgarden.

*Source: Target Research Group, 2012.  “Small Retailers” defined as retailers with less than 20 locations

Andreas Liffgarden Bio:

Andreas Liffgarden founded Soundtrack Your brand in 2013 and serves as its Chairman. Prior to Soundtrack Your Brand, he served as Global Head of Telecom Business Development at Spotify from September 2008 to September 2012.

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