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Virgin Births Revamped Megastore In San Francisco

Virgin Entertainment Group, North America, has unveiled a new prototype Megastore designed to boost traffic and revive sales amid the flagging market for music CDs.

The eight-year-old unit, located here, was retrofitted to accommodate a greatly expanded product assortment that includes CE, apparel and adult merchandise, plus a slew of novel in-store features like flash-media-card kiosks, a concert stage and a vending machine that dispenses CDs and DVDs.

The new retail concept, which was based on extensive consumer research in the San Francisco Bay area, reflects Virgin’s commitment to music and entertainment retailing, the company said, despite the challenging environment for the sector.

“This demonstrates our commitment to our core business, which is our stores,” said CEO Glen Ward. “We have asked our customers what they want, and by enhancing our stores and making them a more exciting place to shop we’ve given them what they asked for and more.”

Virgin founder and CEO Sir Richard Branson, who attended the store’s re-opening, noted, “We’ve really raised the bar and have elevated our offer to include an expanded range of products and services that appeal to our core customers’ lifestyles. We are confident that this is the direction we need to go for Virgin Megastores in the future.”

Assortment-wise, about 10 percent of the 40,000 square foot store will be devoted to products outside Virgin’s typical mix of CDs, DVDs and books.

These include MP3 players, mobile phones and other CE devices from Samsung, Philips and the company’s own Virgin Pulse brand, located at key positions throughout the store; apparel and fashion accessories, along with fitting rooms on three floors; and movie and band memorabilia.

Virgin has also expanded its DVD selection, installed a gay lifestyle section, and added an adult area featuring erotic DVDs and video games.

The re-assortment is expected to reduce Virgin’s reliance on music sales by trimming CD revenue from 60 percent to 50 percent without significantly impacting selection. Under the plan, DVDs will represent 30 percent of sales while the balance will be derived from sales of alternative products.

The store also features what Virgin’s billing as the largest stage within a North American retail venue, which will hold live music concerts and showcase lifestyle products including cars, motorbikes and music equipment.

Virgin will also enter the used music business with a service that allows customers to exchange their old CDs, games and DVDs for store credit, while a vending station facing out onto San Francisco’s Market Street will allow customers to purchase CDs and DVDs 24 hours a day.

The company is also expected to launch its own music download site within the next two months.

In a final feat of retail interactivity, the prototype provides handheld listening devices that enable shoppers to listen to any pre-recorded offering anywhere within the store, and features MegaPlay kiosks that allow customers to download 30 pre-selected songs onto flash media cards free of charge.

Virgin plans to bring the retail concept to New York and Los Angeles later this year after further tests of the San Francisco prototype.