NARM Survey: Online Retail To Grow

Consumers continue shift to non-specialty retailers.

A study released by NARM Thursday shows that consumers continued to shift their purchases to non-specialty retailers in 2003, and that online music buying should show signficant growth this year.

The survey, prepared by NPD MusicWatch, also noted that teens comprised a shrinking share of the consumer market last year, while women bought more music.

The NPD study reaches many of the same conclusions as an RIAA consumer survey issued Tuesday.

Dollar sales of physical product declined 8% in '03, while unit sales slipped 7%, according to NPD.

The survey reveals that dollar share for music specialty retailers slipped from 29.8% of the market in 2002 to 26% last year, while mass merchants and electronics stores each gained around 2% in market share.

More than 10% of customers aged 13-24 -a group representing one-third of total sales- deserted specialty stores for discount and electronics outlets.

Prices remained higher at specialty stores, with a current album priced at $14.91, versus $13.81 at mass merchants and $13.25 at electronics stores.

Almost half of the respondents- 49% -said they bought fewer records because prices were too high, while 43% reported there was less music they wanted to buy.

Competing entertainment was a factor: 22% said they were spending money on DVDs, and 7% said they bought video games.

The 13-to-17-year-old demographic lost the most market share, while the 55-to-64-year-old age group bought more.

Online customers bought 9% more music than the average buyer, and had the highest scores in terms of customer satisfaction.

Women consumers accounted for 52.6% of sales in 2003, versus 50.7% in 2002.