The final panel at the Music 2.0 conference was about the future of music retail and featured people involved in the business of selling CDs in one form or another. It was a symposium on a market in transition that sees different opportunities in selling CDs.

Simon Wright from Virgin Entertainment Group International described how his company's product mix is in flux. Company-wide sales were up 12% last year, but Virgin is moving away from music and toward products like clothing. "Out marketing agenda for this year is we want people to stop calling us a record store," he said, adding that it sells "bucket loads" of items from Gwen Stefani's clothing line.

The belief that brick-and-mortar retail will survive was built upon consumers' enjoyment of shopping. One key opportunity -- which is filled with challenges -- is to bring digital into retail. "People like to get out and about," said Bob French, president of Mix & Burn, which allows retail consumers to create custom mix CDs at in-store kiosks. "When they're out there, they're compelled. They make impulse purchases. Digital is a great way to satisfy that impulse.”

Bill Nguyen, founder of Lala.com, called for retailers to incorporate better technology to offer customized shopping experiences. He argued there's more great music now then ever before, but there's "a search problem." Rather than act as a loss-leader, the music, he argued, needs to stand on its own. "The industry never learns from its lessons,” he said, and the industry is getting behind “weird business models” like advertising."

So the CD is getting fewer square feet, people are hopefully about CD-burning kiosks and a technology entrepreneur thinks traditional retail is mindlessly spinning its wheels. What did I take away from it? There is no killer app that will bring digital-era shoppers into brick-and-mortar retail, and retailers would rather shift the product mix than use innovation to sell more music. The economics of the CD are its biggest liability. Music offers low margins. How does one succeed with a low-margin product? Volume. How to increase the volume of music sales? If somebody made a convincing argument that answered that question, the panel would have ended the conference on a high note. Alas, the question went unanswered.