It’s no secret that consumers are transitioning away from purchasing music in bricks-and-mortar stores and tapping the digital-download market. The numbers are starting to catch up with the trend, too: Apple announced last spring that its iTunes store, which dominates 70% of the digital- download market, had surpassed Wal-Mart Stores as the largest music retailer in the United States.
Increasingly, traditional retailers are looking to compete against the iTunes store. Best Buy, for example, recently acquired the online-sharing site, Napster. But Apple continues to lead the pack. Its success has everything to do with the company’s talent for innovation. By continually reinventing itself online, Apple gives shoppers more reasons to buy music online—and keeps them coming back for more.
In September, Apple introduced iTunes 8.0, the latest version of its interactive platform. iTunes 8.0 is by far the sleekest and smartest version in its repertoire, helped by its new Genius Sidebar feature that prompts consumers to buy more music.
The Genius Sidebar can create personalized playlists from an existing music library and recommend new music (available for purchase) to consumers based on their preferences.
These recommendations are based on song styles, not necessarily on the artist. For example, the tool can distinguish between Eric Clapton’s classic rock song “Layla” and his unplugged version, and recommend similar songs for the listener to buy based on which version they choose.
The Sidebar also highlights “Top Songs You’re Missing.” If an iTunes member is playing “Layla,” iTunes may discover “Wonderful Tonight” is missing from their library. It then gives them the option to download it for its staple 99? fee.
For the feature to be integrated, an iTunes Store account is needed, and necessary information about the user’s library must first be sent to the Apple database.
This is an easy process: A pop-up asks an iTunes user for permission to have their music scanned and sent to the company’s database. The scanning process occurs only once during the set-up process and takes less than five minutes. The Genius feature becomes smarter by compiling the anonymously submitted library information from its users, and over time, becomes more accurate with its playlist generation.
Once the songs are scanned and sent to the company’s database, Apple analyzes and matches users’ tastes with others. The company then pushes out recommendations that are displayed on the Genius Sidebar.
Dillard’s 3Q loss widens
LITTLE ROCK, Ark. Dillard’s reported a third quarter net loss of $56 million, or 76 cents per share, compared to a net loss of $11.3 million, or 15 cents per share, for the same period last year.
Dillard’s ceo, William Dillard, II, stated, “The oppressive economic environment clearly weighed heavily on our results during the third quarter. We continue to take aggressive action to navigate these challenging times. We announced the closure of 21 under-performing stores during 2008, dramatically reduced capital spending for 2008 and 2009 and are executing appropriate operating expense reduction measures throughout the Company. These efforts are not only designed to position ourselves to weather near-term economic uncertainty but also to position Dillard’s well for the long term.”
Net sales for the quarter were $1.508 billion compared to net sales of $1.633 billion last year. Sales in comparable stores declined 9%.
Fred’s sees 3Q income growth
MEMPHIS, Tenn. Fred’s reported net income of $6.1 million, or 15 cents per diluted share for the third quarter 2008, an increase of 32% from net income of $4.6 million or 12 cents per diluted share in the year-earlier quarter.
Fred’s total sales for the third quarter of fiscal 2008 were $418.0 million compared with $419.9 million for the same period last year, with the year-over-year decline of 0.4% reflecting the company’s store-closing program. Excluding stores closed in 2008, total sales from ongoing stores increased 4% over the third quarter of last year. On a comparable-store basis, third quarter sales increased 1.4% versus 1.1% in the year-earlier period.