He urged merchants to follow the lead of Tower Records and Virgin Megastore, which redesigned stores and hired workers well-versed in music.
Retailers, heavily dependent on physical music formats like CDs and audio cassettes, have been particularly hard-hit by an industry downturn that began in 2000. Even though US music sales are up 9 percent this year, retailers are struggling in a market where digital sales are growing.
Davis, who launched the careers of Alicia Keys, Whitney Houston, and others superstars, didn't address whether retailers should offer computer downloads or customized CD burning inside their stores. But finding ways to generate sales from the online music boom is now at the top of the list for retailers, from large chains such as Best Buy Co. and Tower to regional and independent mom-and-pop merchants.
Several firms were scheduled to pitch their own in-store technology offerings during the conference. Among them are a new hybrid CD-DVD format known as Dualdisc that is receiving a push by the four major recording companies, and in-store computer kiosks that can crank out custom CDs and sell downloads.
"We have to make sure CD burning becomes a commercially viable option for all of us," said Glen Ward, Virgin's CEO.
Online sales of digital tracks remains a small part of overall music sales. However, in February, the number of song downloads sold in a week exceeded 2 million for the first time, said Jim Donio, acting president of the National Association of Recording Merchandisers. He said "seismic shifts in music consumption" are caused by the popularity of Apple Computer Inc.'s iPod digital player, its online music store, and Internet retailers like Napster 2.0 and MusicNow.
