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Kantar Retail's Stephen Mader looks at the further of physical retail

Digital Distribution steamrolls across the UK

Stephen Mader looks at how bricks and mortar retail can integrate online sales.

At year-end 2012, entertainment revenue from the digital distribution of movies, TV shows, games and music broke the £1bn barrier in the UK according to the Entertainment Retailers Association. This accounts for roughly 25 per cent of total entertainment revenue at the moment, though we anticipate this to increase as consumers continue to flock towards connected devices and online platforms such as such as iTunes, Spotify, Steam, Google Play, and Amazon.

This inevitably leads to the question – what does the future of entertainment look like for physical retail?

I’m not of the opinion that the entertainment category in physical retail is dead (though the potential implosion of HMV may suggest otherwise); I believe the category needs to evolve beyond the concept of ‘physical store must equal physical product’ and put the idea of shopper convenience front and center.

Physical retailers tend to have two reactionary strategies – throwing heavily promoted titles on an endcap and hope it sells, or pushing aggressively into used games and trade-ins to help bolster margins. Neither of these strategies are really that convenient in an age of digital distribution. When you look at the digital platforms that are winning share – Steam, Amazon, iTunes – making the shopper’s life more convenient is what helps drive adoption.

What Tesco has done around integrating Blinkbox into a family meal deal is a great example of digital distribution in a physical environment. What are you doing to help make your shopper’s life easier?

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