Analysis: Record Store Day and the rise of retro retail

When the event was first launched in 2007, less than 2,000 records had been sold in the UK in the year – it looked like a sector on the brink of extinction.

However, a decade on and vinyl records have experienced a stunning resurgence.

Research by the British Phonographic Industry (BPI) found that vinyl sales soared 53% last year to top the 3.2 million unit mark – the most LPs sold since 1991.

This growth is echoed by figures from the Entertainment Retailer Association (ERA), which reported sales of vinyl records increased 56.4% last year to £65.6m – a particularly striking statistic when compared to the 15% decline in overall physical entertainment sales during the same period.

Chief executive Kim Bayley said: “Physical entertainment retailing is clearly off its peak, but it is still a £2.2bn market.

“The growth of vinyl in particular shows that physical formats can flourish if they offer distinctive benefits.”

Retailers getting retro

Sainsbury’s, which started selling vinyl in a selection of stores last March, has found a niche in the market for the format – according to Nectar data, 86% of its vinyl customers had never bought a CD from the grocer.

A spokeswoman for the grocer said it is “committed to the format” and expected “continued growth over the next few years.”

Retailers ranging from Urban Outfitters to Tesco have also added vinyl to their in-store offer to cash in on the growing trend – but what is driving it?

According to Gennaro Castaldo, director at the BPI, the growing popularity of streaming music has left a space in the market for vinyl that didn’t exist before.

“To our delight, there is a complimentary relationship between streaming and vinyl,” he said.

“Streaming music offers customers immediate access and convenience, but also seems to leave space both emotionally and materially for customers to go out and buy a recording that they particularly like with a lot more of the appeal of retro memorabilia than a CD.

“Shoppers see vinyl as a cool badge of honour and something that offers a more authentic experience. Streaming is great and is driving the market growth but it has also left space for vinyl to keep on flourishing.”

The demise of ebooks

And LPs are not the only form of traditional media enjoying a revival.

Whilst retailers including Sainsbury’s and Waterstones offloaded their ebook businesses last year, the sales of physical books are growing at pace, as demonstrated by bookseller Foyles’ tenfold surge in profits last month.

For Waterstones chief executive James Daunt, the growing popularity of bookstores lie in their ability to create compelling in-store experiences.

“We’ve been ahead of the curve, even by Record Store Day’s standards, with events like World Book Day,” he says.

“Everything we do is about making the shops a nice place to come. Our major competitor is Amazon, so if you want to ask people to come into your shop rather than having something drop through their letterbox, you need to give them a reason to.”

To achieve this, Daunt has invested in improving the store experience across Waterstones stores, and has given staff autonomy to run their outlets as they see fit.

However, he believes that whilst music downloads and streaming have the potential to cannibalise vinyl sales, physical books are more resilient.

“Ebooks work very nicely for fiction and narrative reading but doesn’t work when you need to use a book in all its flexibilities,” he said.

“Digital reading is a very different experience, and in most cases a not as satisfactory one.”

Not all about nostalgia

Be it a temporary backlash against entertainment technology or a longer-term trend, there’s clearly an appetite amongst shoppers for more traditional media, be it through adult colouring books, Ladybird spoof books or Polaroid cameras.

However, it’s not just older shoppers looking to relive the heady days of their youth – in fact, in many cases younger shoppers are driving sales.

According to Daunt, children’s books and young adult fiction are Waterstones two most resilient product categories, whilst Castaldo said that millennial shoppers “had put wind under the wings of the vinyl revival”.

According to BPI, vinyl only represented 5% of overall physical music sales last year.

Nevertheless, considering the loyal and diverse following of shoppers it has amassed over the last ten years, retailers would do well to find space for LPs, turntables and other throwback products on their shop floors.