Best Buy Deemphasizes CD Category
Best Buy is shrinking its CD inventory and the floor space it devotes to the category as sales continue to dwindle while music streaming services take over.
According to the Record Industry Association of America (RIAA), CD shipments in the U.S. were valued at just $1.1 billion in 2017, down from a peak of $13.2 billion in 2000. Best Buy is following the lead of customers based on industry trends and “de-emphasizing the category,” chief executive officer Hubert Joly told reporters in a media call earlier this year.
The category is definitely losing space in stores, though the big box retailer did not completely end CD sales on July 1 as media outlets reported. Some locations have completely eliminated floor space devoted to the category and dumped any remaining CDs in an unmarked bin while waiting for them to sell out completely. In most stores visited by P2PI, CDs continue to command a single remaining in-line merchandising aisle and endcaps, down from the multiple aisles of years past. Stores also accept less temporary displays for CDs and have few to zero related signs remaining – navigational or otherwise. Best Buy is helping clear out space by running an ongoing in-store deal for 25% off CDs priced at least $6. Circular feature support.
The Star Tribune reported last month that Best Buy will remove CDs altogether from bestbuy.com, without specifying a timeline. However, an employee in a Minnesota store indicated that CDs will continue to be available online, and the music and movie category within bestbuy.com still advertises CDs with active dedicated e-commerce pages.
“The way people buy and listen to music has dramatically changed and, as a result, we are reducing the amount of space devoted to CDs in our stores,” Best Buy said in a statement. “However, we will still offer select CDs, vinyl and digital music options at all stores.”
CD sales have been in a downward spiral at Best Buy, generating only $40 million of the $42.2 billion in total revenue the company pulled in last fiscal year, Forbes reported. Though Best Buy will continue selling vinyl – which have seen a resurgence in recent years — the retailer plans to focus its efforts on other, more profitable product and service categories. In stores, the retailer is expanding its connected home departments with smart home discovery areas moving into the space vacated by eliminated CD aisles.
Analysts speculate other big retailers like Target and Walmart will soon follow in Best Buy’s footsteps. Target already decreased the number of previously released CDs it carries in stores by about a third in the fall of 2016, according to the Star Tribune, although the retailer continues to partner with big artists such as Justin Timberlake and Taylor Swift to help drive sales of new releases by offering album exclusives. Walmart likewise already reduced the amount of store space devoted to the category in 2008 and again in 2014, according to reports, stocking only popular hits and staying on the lower end of the price range.