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Retailers cost efficiency hits new record

Has the cost of paying royalties to the original artists became too much in this economic climate – forcing retailers to record their own covers?

A recent customer posted online “I have been in 3 different retail stores in 10 days and all of them appear to be playing soft rock music in the background. Fair enough. But its not the actual songs, it sounds like a very close copy of the originals. For example, I have heard some Bon Jovi, Beatles and Bachman Turner Overdrive stuff and whilst it sounds fine to the casual listener, to someone like me who actually likes their stuff it is plainly not the original track”

What is going on? Are retailer’s costs so high that they cannot afford to pay royalties but instead recorded their own versions? Or are they oblivious to the fact that the music they are playing in their stores is not the original.

Another customer posted that a popular clothing store did the same playing “awful covers of watered down chart tunes” throughout the store. He then added “it put me off shopping in there in the end, I couldn’t put my ears through it anymore”.

Is this music affecting customer loyalty and buyer behavior – deciding to leave the store directly because of the music played. Could paying the cost of royalties contribute to higher sales revenue due to happier customers?

An opportunity cost of needing to be efficient due to the economic climate but at the same time keeping their customers happy with their choice of in store music may be affecting retailers more than ever.

A question retailers must be asking themselves now is ‘is it worth it to pay the royalties to keep their customers happy in order to maintain or increase revenue?’ At Insight we believe that customer service is key, from the creation of the product to the purchase transaction. This means that if retailers need to pay royalties to artists in order to keep their customers happy then it is a necessity.

There's no doubt that when you walk into shop and realise that they're playing fake music, that your impression of that store is that it's a bit cheap. Not paying attention to detail can lose customers and damage brand image. If they can't even play the original music, we would suggest that you don't play anything at all!

25 July 2013
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Paul Boyce - European CEO, QEP Ltd.

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