I recently had a great conversation with Dee Mc Laughlin, the marketing chief for Virgin Megastores. It was a great conversation because Virgin Megastores is growing rapidly (sales up 14 percent in 2007) in the music category, where industry-wide sales for the year were down by a similar percentage.

Not only that, but Virgin is zooming just as one of its main competitors -- Tower Records -- succumbed to the music industry's depression and closed its doors.

How is this possible? Why is Virgin Megastores sailing where others are sinking? According to Dee, the answer is pretty simple: "It's about coming up with easier ways to give our customers what they want."

And how do you do that? Well, here's what Dee has to say about it:

"We observe and then we innovate. For example, HD and Blu-ray are hot right now. We observed that our customers were saying, "what is the difference between the two?" You can tell them what the difference is, but unless they're actually seeing what the difference is, it's not going to help sales.

"So, we've put an HD and Blu-ray wall into all our stores. It's really spectacular looking. Where before we had consumer confusion, which was potentially stifling sales of both systems, now our customers actually can see what the difference is and choose for themselves which format to buy."

So, the key words for today are: "observe" and "innovate." The result, says Dee, was not only a more entertaining and engaging shopping experience, but most important, an increase in sales. If you'd like to read the rest of my conversation with Dee Mc Laughlin, you can find it at http://hubmagazine.com