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Sanity to close its remaining stores and move fully online

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By Published On: January 13, 20230 Comments

Beloved Australian music retailer Sanity has fallen victim to the digitisation of music retail as it moves entirely online.

From its humble beginnings in the 1990s, Sanity grew to become one of Australia’s leading music retailers. At it’s peak around 20 years ago, Sanity had over 150 stores across Australia. It announced last week that the retailer would be closing its 50 remaining stores and migrating entirely online by April this year.

“With our customers shifting to digital for their visual and music content consumption, and with diminishing physical content available to sell to our customer, it has made it impossible to continue with our physical stores,” owner Ray Itaoui said. He told Nine Network that “diminishing physical content” available to sell to customers had forced Sanity to close its bricks-and-mortar operations.

Ray Itaoui bought the company in 2010, at a time when physical music media was still going strong, now digital media dominates the music industry. According to The Guardian, in 2020, $480m was generated through the sale of digital music in Australia, while analog equivalents had plummeted to just $62m, a decline of more than 80% over the preceding decade.

In the early 2000s as streaming began to dominate the music retail industry, Sanity made various attempts to embrace the digital age and remain profitable. In 2006, the retailer introduced in-store kiosks where customers could select their own songs to either burn on a CD or download directly into an MP3 player. In an attempt to compete with the rise of iTunes, Sanity introduced ‘LoadIt’ an online music subscription service in 2008. The short-lived service was launched in partnership with Microsoft and was available both online and via in-store kiosks, enabling consumers to download up to 300 tracks per month for $29. The service was discontinued after five months due to competition from iTunes and BigPond and technological constraints.

“Our online business – sanity.com.au – will continue to operate, and will service the many loyal customers the brand has continued to be dedicated to over the decades,” said Itaoui.

“Our priority right now is to ensure each of our team members knows exactly what this means for their career and employment future.”

Item orders placed at Sanity physical stores would still be shipped out, including pre-orders.

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About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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