[S]ources say that Target has demanded to music suppliers that it wants to be sold on what amounts to a consignment basis. Currently, Target takes the inventory risk by agreeing to pay for any goods it is shipped within 60 days, and must pay to ship back unsold CDs for credit. With consignment, the inventory risk shifts back to the labels.
I left Target in 2015 and at that point we were already making moves to trim down our selection of CDs. We went from 5 aisles in my store to 4...to 3...to 2 when I left. This is the right thing for them to do, and considering the profit margins are razor thin on music, there is very little reason for Target (or any retailer) to keep physical music in their inventory much longer.
Anecdotally, I had visits from our district manager every few weeks and we would talk about departments in terms of sales numbers. Sales in music were dropping every year and I was asked many, many times what I was doing to drive sales improvements in CD sales. It was one of the stupidest asks I consistently got, and considering the entire company was dropping even faster than my store in revenue in this space, it drove me crazy to have this as an “ask” every visit. “How about we jump in a time machine and go back to 1999?” was my suggestion to my store manager after the head honchos left.