Lessons To Be Learned From Tower Records: When The Market Shifts, You Need To Shift With It
from the end-of-an-era dept
Two months ago, in noting that Tower Records had filed for bankruptcy for the second time in about two years, we wondered if it was the final word on the pure play music retailer. After all, selling music is almost universally recognized as being a good loss leader, not as a pure business. It looks like the folks at Tower were too late to figure this out. While there had been some hope of keeping the company going, in an auction late last week, the winner has decided to liquidate the business, selling off the inventory, shutting down the stores and laying off the people. The company's hometown paper, the Sacramento Bee has a sentimental obituary for the company, noting that the executives at Tower (and plenty of other retailers) never really believed the internet would impact their business. In the end, as sad as it is for those of us who used to spend plenty of extra time (and money) at various Tower Records' stores, it should be a case study for those who don't understand when the market is shifting around them. While other record stores began to recognize that that they needed to completely revamp their business -- from becoming combination music/dance clubs and stores to starting their own record labels or becoming "destinations" rather than just stores -- Tower Records leadership insisted that the web "is certainly never going to take the place of stores."