In-store entertainment has become as important as layout, design and lighting to create an environment conducive to selling. According to industry estimates, just under half of Britain's 200,000 commercial premises have some sort of in-store music: ranging from a cassette compiled by a local manager to a full-scale in-store radio station, such as Asda FM. Around 70,000 outlets are licensed by Phonographic Performance, the body that administers music copyright, to play some form of prerecorded music.
"Retailing is becoming much more competitive, dynamic and segmented as retailers compete harder to get people into their stores and communicate with them more effectively," says Trevor Morse, head of strategy at Chrysalis Radio. As well as putting shoppers into the right mood, in-store entertainment can also promote specific products, highlight promotions or carry paid- for advertising - both for own products and third-party brands.
It is a business regarded by many as ripe for development. Just last month, AEI Rediffusion Music announced a joint venture with Music Choice Europe to provide a satellite broadcast service offering four music-only stations for British retailers. However, most of the services that exist involve a mix of music, speech and commercial messages.
BhS has operated BhS Radio for a year. The in-store station is aimed at women with a mix of music, entertainment and product information and promotions. "The aim is to run BhS Radio just like a real radio station, carefully limiting and managing promotions on-air," says Simon Kleine, head of corporate communications at BhS. The station is broadcast in half of the chain's 130 outlets and will be available in all next year.
BhS Radio is supplied by Retail Broadcast Services, an in-store programming specialist that also runs tailored radio stations for Texas and Granada, which is in the middle of a three-month trial. Output is mainly pre-recorded, with music selected to match customers' tastes and moods at different times of the day. Music is scheduled randomly by computer, with pre-recorded DJ talk.
RBS also works with Virgin, which last year introduced VFM, an in-store station for Virgin Megastores. "In-store radio offers an invaluable showcase for customers at point of sale," says Clinton Barr, the VFM co-ordinator. VFM is a live service with music, competitions and promotions.
"In-store radio is no longer a matter of saying 'Here's the next record, and by the way ladies, check out the lingerie department'," says Samantha Cann, the RBS production manager. Instead, it is increasingly resembling the standards of professional radio broadcasters, she adds. That is why Mr Morse at Chrysalis describes the launch of CRE as "a logical move". He said: "It's about customer targeting through the traditional skills of music programming, day parting and formatting." CRE will utilise Chrysalis's experience in running two commercial radio stations (Heart 100.7 in the west Midlands and Heart 106.2 in London) adapting broadcast skills to ensure programming is sympathetic to a particular retail environment and reflects brand values.
Mr Morse says there is significant potential for growth among retailers not using in-store entertainment, among those only using tapes and with others who use in-store radio only in selected branches. "Consistency and control will become increasingly important," he says. "An unco-ordinated approach is bad for a retail chain trying to present a strong, unified brand image."
CRE has been built from the foundations of a long-standing Chrysalis subsidiary, MAM Communication Systems, which is primarily a hardware supplier of entertainment systems to shops. In its new guise, the division will place a greater emphasis on offering a strategic and marketing-led consultancy service, including tailored audio and audio visual programming.
The company is now working with clients including Tie Rack and Harvester restaurants. However, Chrysalis will not have the field clear for long. Virgin and Capital Radio are also considering the potential.