LAS VEGAS -- In its second year of business, Fresh Picks, Richmond, Va., a racker of supermarket music programs, won its second consecutive Wholesaler of the Year Award from the National Association of Recording Merchandisers. The award was presented during the NARM convention here this month.
Fresh Picks racks 84 music departments in supermarkets of Star Markets, Cambridge, Mass.; Farm Fresh, Norfolk, Va.; and Giant Food Stores, Carlisle, Pa. "This is a statement from the music industry about how important alternative channels of distribution are, and how strongly they believe that the supermarket has a very real role to play in the selling of music going forward," Michael Rigby, president of Fresh Picks, told SN after accepting the award.
Rigby said he expects to add another major chain soon. He estimated that Fresh Picks could have between 300 and 400 departments within 12 months. "There are a lot of growth opportunities that we are entertaining now," he said. The assortments range from 600 to 1,200 stockkeeping units in space ranging up to 40 linear feet, he said.
The award comes after a long history of failed attempts to sell music in supermarkets, and at a time when many supermarkets are reconsidering their video-rental programs and entertainment software in general.
During a seminar at the NARM convention, Rigby said that among the keys to Fresh Picks' success were advanced inventory management and field communications technologies, store-specific assortments, thorough preparation before approaching the retailers and the company's field personnel.
"Most important is the inventory management and very closely aligned to that is the experience we have in tailoring store inventory to match the neighborhood it serves. Every inch of space in the department needs to be earned and needs to be productive," he said.
It's not sufficient to categorize metropolitan markets as to their tastes in music, for example, alternative music in Boston and urban music in Norfolk. "Within such a market, you have got very strong country stores, you've got very strong R&B stores, very strong alternative stores. So it is about the sophistication and the accuracy of getting the right inventory in exactly the right stores. Overall, the margin opportunities are on the lower end, so you have to maximize the margin dollars. When you do that, a front-line led music business in a grocery store will provide a very, very attractive use of space and profit opportunity in the stores," said Rigby.
Speaking to an audience of music retailers, Rigby noted that Fresh Picks sales are additive to the industry. "We are realizing sales that otherwise wouldn't have happened," he said. Fresh Picks targets more over-30 and female consumers than other music retailers, he said, but pointed out that the demographic mix in supermarkets is 49% male and 51% female. "But we also do very well with those under 15, who are somewhat captive in the stores when they are with their parents," said Rigby.
Another key to selling music in supermarkets is to take advantage of impulse-oriented consumers. For example, he noted that 70 cents of every dollar spent in supermarkets is on unplanned purchases. "We are marrying a product of universal appeal with a very high impulse quotient with a high impulse environment," he said.
