With Custom CDs, Retailers Hear Cash Registers Jingle

Tommy Bahama executives weren’t dreaming of a white Christmas when they decided to sell custom compact discs in their stores this holiday season.

More like something in tropical pastels.

Aiming for a compilation of songs that would best reflect the resort-style clothier’s relaxed, sand-between-the-toes image, they turned to Jeff Daniel, a 36-year-old “lifestyle music” consultant who helps upscale retailers select the music that goes into CDs sold at their checkout counters.

“Tommy Bahama customers want to be transported to tropical places,” Daniel said. “But they’re rich, so they want the tropical place to be clean, un-sweaty and free of poverty and disease.”

Daniel concluded that the graying, affluent Tommy Bahama customer willing to drop $110 for a Hawaiian shirt and $58 for a straw hat would rather hear Bing Crosby sing “Along the Way to Waikiki” than croon “Silent Night.” The result: the CDs “Happy Huladays” and “Coconut Radio,” featuring such songs as the Caribbean Jazz Project’s version of “Sleigh Ride” and Perry Como’s “Papa Loves Mambo.”

The president of San Francisco-based Rock River Communications Inc., Daniel has picked songs for more than 300 albums sold by such retailers as Gap, Pottery Barn, Old Navy and Williams-Sonoma. His Christmas compilations are for sale at more than a dozen chains.

Custom CDs aimed at promoting a retailer’s brand have been growing since the mid-1990s. Rock River alone has shipped more than 12 million albums in the last decade, all to non-music retailers. This year, analysts estimate that stores such as Restoration Hardware, Polo Ralph Lauren and Kohl’s will distribute more than 20 million albums bearing their company names.

Retailers say the albums serve as inexpensive advertisements and make money. On average, stores pay $4 each for the Rock River compact discs, then sell them to customers for about $15.

“Shoppers think of Victoria’s Secret every time they slip our CDs into their stereo and relax,” said Ed Razek, chief creative officer at the lingerie giant.

“How else could we get advertising that intimate? And we make a few dollars on every CD we sell.”

Victoria’s Secret has sold more than 12 million CDs featuring Bach, Beethoven, Bob Dylan and Tom Jones.

Music labels and artists like the CDs as well. At Universal Music Group, executives say retailers such as Starbucks and Bed Bath & Beyond have played key roles in their marketing of Melissa Etheridge and Elton John.

A recent Gap promotion by Rock River featured musicians describing their favorite jeans and songs. Soon the walls of Gap stores were covered with posters of country star Keith Urban touting fellow Australian Billy Thorpe’s “Most People I Know Think I’m Crazy,” and singer Alanis Morissette endorsing Curvy Flare jeans and Seal’s “Crazy.” Customers who spent at least $60 were given a CD of the songs.

“Alanis Morissette really wanted to be on that album because she’s eager to be seen as relevant again,” Daniel said. “Smash Mouth, Moby -- their managers contact us all the time.”

But music retailers, already reeling from online competition and discount retailers such as Target and Wal-Mart Stores, say Gap and Pottery Barn hurt the business by siphoning away profits and stocking a limited number of albums.

“The music business depends on people coming into a store to buy one CD and leaving with five on a whim,” said Joe Nardone, owner of the 11-store chain Gallery of Sound in Pennsylvania.

Rock River started in 1995, when music producer and founder Billy Straus was frustrated that an album of songs he wrote for the television show “Where in the World Is Carmen Sandiego?” wasn’t selling, even though his work had earned him an Emmy nomination.

The problem, Straus decided, was that his CD was lost among the scores of albums that music retailers carried. So he put together a jazz collection and asked Pottery Barn to put its name on it. Titled “A Cool Christmas,” the album sold all 15,000 copies within two weeks. Since then, the home furnishings chain has released 82 other albums produced by Straus’ company, including two “Margarita Mix” salsa CDs that each have sold more than 200,000 copies.

Rock River now has annual revenue of more than $10 million, doubling in size in the last five years. In addition to compiling CDs for retailers, the company designed albums of techno dirges for W Hotels, old punk favorites for carmaker Jaguar and salsa for Jose Cuervo tequila.

“We help people find great songs,” Straus said. “It doesn’t matter if there is a huge corporation’s name plastered on the album’s cover.”

Some retailers are trying to imitate the success of Rock River’s clients through ambience makeovers. Sam Goody is experimenting by tearing out CD bins at selected stores and replacing them with black-leather couches, music video screens and machines that pump out chocolaty scents.

“We have to become a center for the music lifestyle rather than just a place to buy music,” said Rob Willey, senior vice president at Sam Goody parent Musicland Group Inc. “We have to capture the emotional connection that stores like Pottery Barn have forged.”

But Rock River executives believe music customers will continue buying CDs with their furniture, cotton T-shirts, scented candles and lingerie.

“Going to Tower Records is fun if you have a few hours to kill and don’t mind hearing seven songs blasted at once,” Straus said. “They’ll trust Pottery Barn or the Gap to tell them what to listen to.”