Tomorrow (April 18) is the second annual Record Store Day, a marketing campaign started by a coalition of indie music shops. Local shops are holding sales, hosting live bands, and having other promotional events to get music lovers in the door. It’s a savvy campaign by a retail sector that has been decimated by online music downloads.

Last year I wrote about Other Music, one of the nation’s best known haunts for music mavens. Josh Madell, Other Music’s co-owner, has employed innovative sales and marketing strategies to compete with iTunes, Amazon, and illegal downloads. In addition to launching a digital store, Other Music adds value to the retail shop by hosting live shows and tapping the knowledge of its clerks with hand-written reviews and recommendations.

Like lots of industries that are trying to invent new business models for the information age (including, ahem, journalism), music retailing has suffered plenty of casualties in the process. From my story last year:

One in four U.S. record stores around in 2002 was gone by 2005, according to U.S. Census data — a net loss of 1,900 stores. But the data suggest that small retailers fared better than large ones. The number of stores with fewer than 100 employees shrank by 18.6% in that period, compared with 34.3% for stores with 100 or more workers.

Creative promotions like Record Store Day may be one step toward building a sustainable business model. The event also nicely illustrates the trend of independent business combining marketing efforts to compete, like the burgeoning buy local movement. But I doubt promotions alone will do the trick. If you’re running a record store, or visiting one this weekend, and see creative business strategies these stores are using to compete, let us know in comments or on Twitter (we’re @newentrepreneur). And you can track Record Store Day on Twitter with the hashtag #RSD09 and follow @recordstoreday.

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