Wired UK recently published a great behind-the-scenes piece about the company that makes stages and sets for the largest touring musicians around the world. Reading it illuminated a parallel between the music industry’s evolution and that of retail:

Back in the 80s and 90s, Alan Krueger [the Princeton economist and co-author of the 2005 paper Rockonomics: The Economics of Popular Music] explains, most artists made most of their money from music sales, using tours as promotional vehicles for their latest album. U2 sold 14 million copies of The Joshua Tree in its year of release, earning the band around $37 million (£28m) in the US. The original 111-date Joshua Tree tour grossed roughly the same, at $40 million.

Post-Napster [the filing sharing service that upended the music industry], the link between recorded and live revenues has been severed, a trend spotted by David Bowie in 2002 when he told The New York Times, “Music itself is going to become like running water or electricity. Artists better be prepared for doing a lot of touring, because that’s really the only unique situation that’s going to be left.”

The second I read the Bowie quote I thought, This is exactly what’s happening to retail. It’s having its Napster moment, in that the defensible aspects and business models of the past era no longer apply to the degree that they used to, shifting the business opportunity—and the skills needed to take advantage of it—to a new playing field.

There are a few different aspects of this analogy that are worth exploring:

  • Successful offline retail is moving from solely transactional to transactional and experiential. Before the internet, shoppers had no option but to go to stores to buy things (think people buying CDs). Then the internet, well built for commodity-level purchases, evaporated the need for purely transactional purchases (using services like Napster). But today, people go to stores for something more than just aisles full of products—they try out these products, mingle with other customers and learn more about the brand (like fans attending live shows). While this is crushing many companies, it’s also empowering and exciting plenty of others.

  • The distribution landscape has also changed. Third-party retailers were often the gatekeepers to brands, which had to woo buyers, stock enough inventory and agree to certain—often problematic—payment terms (as musicians did with record labels). But with the internet, anyone is able to create an ecommerce shop, and the challenge shifted not from getting physical distribution but to discovering customers (think YouTube, SoundCloud, etc).

  • The subsequent explosion of brands (think bands) has led to more competition than ever for finding shoppers (think listeners). Sure, you can open a business more easily than ever (think forming a band, or recording a song), but that does not mean it’s easier to find a sustainable audience, nor is it easier to maintain this audience (think being a career artist). On the positive side, the contemporary consumer economy is not a zero sum game—the pie is growing and consumer spending is healthy.

The big question: how long will these new and abundant consumer brands last? While going viral can expose you to a massive audience, staying relevant is harder than ever. If you have the “it” product of the moment, there’s no guarantee it will turn into a lasting brand.

If a brand wants to compete—namely by using a sustainable marketing program to find a dedicated audience that purchases frequently—a substantial portion of today’s game is getting played in the offline world, prioritising the live experience just as modern musicians are doing today in the music industry.