February 23, 2015
Starbucks to stop selling CDs
Starbucks will stop selling CDs in its stores by the end of March. However, reports suggest the coffee chain is exploring other avenues to tap into its music heritage, likely involving digital distribution.
"Music has always been a key component of our coffee house experience and it will continue to be," Maggie Jantzen, a spokeswoman, told Mashable. "However, we will continue to evolve the format of our music offerings to ensure we’re offering relevant options for our customers."
Continuing will be Starbucks’ "Pick of the Week" that offers free downloads for those who use the Starbucks app. Their themed compilations, including the holiday series and single-song downloads offered via promotional cards, are expected to continue.
According to press materials, locations in the late eighties only played light classical and instrumental songs through tapes provided by an outside playlist service. Vocal driven jazz, such as Ella Fitzgerald, as well as classic jazz, blues and reggae were added. Managers noticed how customers engaged with the music, many asking about the artists and some wondering why compilations weren’t for sale.
In 1995, the first recorded offering, Note Blend CD, arrived. In 1999, Starbucks acquired Hear Music and eventually came out with exclusive CDs from Paul McCartney, Joni Mitchell, Ray Charles, Alanis Morissette and others.
About 20 CDs are regularly stocked in front of registers at most locations. The mix includes contemporary hits such as that Taylor Swift’s 1989 and Sam Smith, but heavily favored compilations of jazz greats, crooner standards, and newer ballad singers such as Michael Bublé, Norah Jones and Harry Connick Junior.
The stores are sometimes ridiculed for their oldies mix. But in an interview with Fast Company in 2004, CEO Howard Schultz said aficionados of standards had no other welcoming place to buy CDs. He said, "The Starbucks customer [who] might want to find a Diana Krall album, a Tony Bennett album, or anything that was not being played on the radio, well, they would have a hard time going into Tower Records."
The move to end CD sales was attributed to the challenging CD category. While Starbucks reportedly saw a "small" increase in CD sales, overall CD sales declined 15 percent industry wide in 2014. Selling an increasingly antiquated product also didn’t fit with Starbucks’ reputation for being at the forefront of technological advances, such as mobile payments and speedy WiFi.
"CDs make them look dated as a brand," Steven Addis, CEO of the brand agency Addis, told USA Today. "They need to move to streaming and have their own streaming service."
- Starbucks to junk CDs – USA Today
- Starbucks to Stop Selling CDs – Billboard
- Starbucks to scrap CDs in stores worldwide – Mashable
- Joni Mitchell and Starbucks Hear Music Produce and Release Two New CDs – Starbucks
- A Musical Look Back at 40 – Starbucks
- Blue Note Blend Jazz Album Pays Tribute to Two Decades of Starbucks Music – Starbucks
Discussion Questions
How important is curated music and related music sales to the Starbucks’ experience? Should Starbucks keep selling CDs? Do digital downloads make sense for their customers?
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I think that Starbucks should just partner with Spotify or Beats and collaborate on offering the great playlists that their customers seem to engage with such as jazz and blues. There really is no need to sell CDs anymore although that’s what they said about vinyl and now vinyl is back. With so many great digital music outlets, no need for Starbucks to be a source. Beats, Spotify and Pandora can offer the Starbucks Collection of easy listening music to have with your Starbucks coffee at home.
Music is important to the Starbucks brand and its coffee house experience, but selling CDs is not. CDs are an old technology that takes up valuable space in relatively small-footprint stores. I’m sure Starbucks will continue to evolve their music offerings in ways that keep up with the lifestyle of their customers.
To quote a famous singer song writer: “The times, they are a-changin’.”
The days of physical CDs and DVDs are long past, along with the retailers that sold them. So Starbucks’ association with selling CDs is not helping build a brand that wants to be synonymous with mobility and the leading edge.
Yet songs and music are one of the most powerful associations we have with a special time and place. Starbucks still serves as that special “third place” for many, and curated music can have a place in building that association.
Agree with Steven Addis—Starbucks needs to abandon CDs and build upon curated music through their app and potential streaming service.
I feel that the very ambiance and essence of Starbucks has combined coffee (beverages), community and music. Therefore developing a Starbucks streaming delivery service or offering digital downloads makes perfect sense to me. It will reinforce the unique experience encountered at Starbucks and continue to extend its brand outside the four walls.
In short, it makes great sense for both customers and Starbucks.
Curated music is an important element of the Starbucks experience. As such it’s both the enjoyment of the curated music while in the store as well as having access to that music wherever you go. I would not expect the curation to change, but access now shifts from physical to an ongoing digital experience. That does not preclude Starbucks from continuing to actively curate the music that lives within the brand, while exploring ways to continue to engage their customers while away from the store using music (and other brand elements). Immediate music gratification is possible through streaming 24/7.
These steps will help the brand remain modern and, even more importantly, relevant, in the lives of their customers. Success will be based on how well they envision the possibilities of infusing curated music into the overall Starbucks experience and how well they execute the transition.
I’m out of touch but to younger people CDs are for old people. Nobody buys music via CDs any more. That’s what people did back in the ’90s before digital downloads. I had a young person ask me the other day why cars still have CD players.
Music is useful in many retail environments. However, Starbucks’ decision to cut the cord with the sale of CDs is the right move.
They made the right decision in holding a tie to music. Starbucks’ plans to experiment with digital downloads offer promise. We all have to be positioned to ask ourselves what should we start, sustain and stop doing. Important question for all organizations. The toughest one to address, and usually the one that offers the least added consumer value/profitability to the store, always tend to be the “stop” issue—simply because we fail to make the call.
Starbucks has taken the action. Good for them.
CD’s. How quaint. That spontaneous impulse buy to consume immediately (as in a download within the Startbucks mobile app), sure.
In short: On-site music—yes, CDs—no, downloadable music—yes.
I am a bit contrarian to the prevailing wisdom here. I always thought their CDs were a big part of the cool vibe of the place. It hardly takes up any room, so why junk it? Sure, they could go digital, but the CD also has a signage effect. Some said no one buys CDs anymore—let’s not confuse trend with level. Plenty of CDs are still sold just like plenty of newspapers are sold.
As noted in the article and in many of the comments, sales of CDs represent yesterday’s technology and are now inconsistent with the Starbucks experience. Obviously Starbucks’ positioning as the “third place” between home and work or school would allow them to play music in stores consistent with their target markets. Likewise, digital downloads make sense. However, keep in mind this is becoming a very crowded field as now Amazon Prime customers can stream music free on the Amazon Music app.
I agree with Steve Addis. CDs do make Starbucks look dated. Streaming is the best vehicle for Starbucks to continue its musical tradition.
Smart move—don’t know the last time I bought a CD.
There are other alternatives to mix in music to the Starbucks experience and they will continue to evolve to find the right solution to enhance that experience.
It would be far trendier for them to focus on selling vinyl rather than CDs. Starbucks has developed a strong brand relationship with music that keeps it cool. I believe it would be a bad move to not continue to foster it.
It’s tricky to associate with streaming services such as Spotify, Pandora, RDIO, Beats, etc. because not everyone is on all those platforms and you would segregate your clients. It would be better for them to focus on their own service for in-store and then make it available for download and streaming on their app.
Frankly, I am surprised it’s taken this long for Starbucks to remove CDs from their stores. That said, music is not only important to the experience, but can still be leveraged for additional customer value and monitization.
Starbucks has a number of alternatives for dealing with music. Whatever they choose to do, it will be important to not only be consistent with their brand, but move the brand forward. Here are a few of the many options available:
In the end, music matters, especially to a brand, like Starbucks, where creating and maintaining emotional bonds has an even greater profit impact than the typical retailer.