Why HMV must survive

Do you remember the first cold remedy you ever bought?

Do you remember the first pencil case you ever bought?

Do you remember the first blouse you ever bought?

No?

I bet you can remember the first album you ever bought…

In the 1990s, Boots, WH Smith and M&S all endured tough times and, although customers questioned why they had lost direction, there was a general feeling amongst the British public that we needed to rally around our legacy retailers. Why is it then, that in recent years we have turned our backs on the staples of our High Street? Why has history and culture become so much less important than price or convenience? Why do we value the physical product so much less than the digital? As consumers have we lost sight of what really matters?

I began my own career with HMV in 1998. I started as a Christmas temp, like many people, lacking direction in my career and somewhat unsure what to do next. The next ten years were incredibly rewarding and exciting. I struggle to articulate to my peers who have worked for other retailers just what an exciting a place it was to work. It wasn’t just exciting for the people who worked for HMV, there was a palpable sense of excitement for our customers too.

As a Manager at HMV you really lived a great, albeit challenging, life. Summer conferences in Marbella, Dublin, Aviemore; Winter conferences at the Grand in Brighton (one that stands out was themed around a Scarface Anniversary re-release – outstanding work Trish!). There we witnessed performances from bands that genuinely needed the support from HMV to break their first album. We genuinely felt that we had an obligation to support new acts and to bring them to the public’s attention. It wasn’t retail, it was ROCK & ROLL! (to quote an ex MD, Dave Pride, at a new store opening). The conferences were also educational. We learnt about the company’s history and were reminded of our obligation to honour both the heritage and the future (Brian McLaughlin, Ex CEO, was a great story teller). You felt part of something bigger than your own experience. The business was full of egos, like any company, however somehow the sum never became greater than the whole.

We were at the forefront of youth culture however at the same time, we knew how to merchandise and sell the latest Midsomer Murders DVD. Every Monday there was a new set of singles, albums, films and games (which had a Friday release date, just to complicate things). Saturday, as for most retailers, was the most thrilling day of the week, not just because of the sales lift but also because that was the day we received the deliveries of new releases. The stock room would be buzzing with anticipation as you discovered what the album of your favourite artist actually looked and felt like. Each shop in HMV was responsible for buying approximately 70% of the stock you would see in store, entirely aiming at you, the local and regular customer. This brought challenges and risks. For instance, if an album sold well on Monday, was this because it had a very loyal fan base or did it have the legs to keep selling. Would it get any airplay? Would customers tell their friends that they had found a gem? Should you order more? This wasn’t a tin of beans, it wouldn’t eventually sell through – it was a genuine gamble.

HMV connected with customers in a way that most retailers can only dream…and yet….somehow it has all gone wrong.

Why? Technology has changed, and well, let’s be honest, HMV hasn’t. Consumer shopping habits have changed too. The customer base at HMV is very different. It feels like HMV has been caught between two very different customer profiles (sweeping statement alert!); one that is older and still keen on physical product and, well the kids who don’t really get HMV anymore.

I look at HMV now and don’t really understand what they stand for, and to be honest I am not sure they really know either. Do they cater for an ageing and dwindling customer base or do they completely reposition, fundamentally changing their product base to get the kids re-engaged? Is technology (ie. headphones and accessories) the answer? Not really. HMV has to reposition as a specialist, but of what?

Trevor Moore, the new CEO, has an enormous task. He has to choose what type of customer he wants as he cannot appeal to everyone in the manner of the HMV of old. Jamie Zuppinger of Barracuda Search, wrote an article in Retail Week earlier in the year, in which he commented that most CEOs he had spoken to felt their biggest mistake after joining a failing business was not cutting deep enough and fast enough. Unfortunately I feel that this is exactly what Trevor Moore needs to do. In all probability, the only way HMV can survive is to reduce the store portfolio to circa 100 stores and to truly specialise. The margins have became so tight that to support this the supplier base will probably need to increase their equity stake much like other specialist retailers.

And we, as consumers, have a responsibility too. There was an outcry when Woollies went under. Are you prepared to see another integral part of our high street culture disappear? Yes, you can buy an album cheaper on Amazon, but is it as fulfilling as browsing a display in HMV? We have to place a greater value on our high street.

Trevor Moore, needs time. As consumers, we have an obligation to buy it for him.

Jez Styles

www.admore-recruitment.co.uk

Linkedin Group

 
 

2 thoughts on “Why HMV must survive”

  1. Fantastic post Jez and as an avid music fan, it’s with great sadness that I have to agree with you. It’s true that HMV have not moved on losing their identity in the process, I rarely ever go in there anymore as I’m not sure what it is trying to be. The music sections have increasingly decreased in size with genres now merged to make room for other non musical products. For me it used to be a bit of monthly pilgrimage going to HMV on pay day to buy the album or single I was looking forward to getting and maybe come out with a recommendation from a knowledgable member of staff. In fact it’d be rude not to leave without buying something, spending a good hour or so browsing….ah the pleasure of browsing for music.

    But that’s all nostalgia with the romantic view of a record store for music fans. I have a record store where I live and I have only been in a handful of times, buying a CD there last week for the 1st time in well over a year, probably more in a show of support. There’s little room for sentimentality as I now get most of my music through Spotify out of convenience. I subscribe monthly for the price of a CD to access any music I want. Yes I don’t own it but it is instantaneous and portable (I read a recommendation in a magazine whilst I’m out and get the album there and then on my phone). Cloud based streaming sites as well as a generation who have grown to expect music for free through the onset of file sharing sites have certainly contributed to the dwindling numbers of customers visiting HMV.

    I don’t really know what they could do apart from specialise back into the music side of things. Helping unsigned/unknown bands by profiling them with perhaps the help of large established Internet sites like Pitchfork, an internal cafe with listening stations, vinyl, who knows. I certainly thought that they missed a trick with the explosion if mp3’s in the early 2000’s. People were taking mp3’s with them everywhere, work, holiday etc and they should have had a facility to plug your mp3 in a shop (say the airport) to buy a song, they could have been in cahoots with Amazon or ITunes rather than be competitors.

  2. Hi Brian,
    I think technology wise it was difficult for HMV to roll anything out, as the market was shifting so fast there was a danger than any kind of store based kiosk system would be obsolescent before it became profitable. I think the real missed opportunity was mobile phones. HMV did trial a partnership with ‘3’ if I remember correctly but it didn’t work out. I think part of the reason was that there was a reticence to be associated with that market when the reputation was at such a low ebb.

    If I was running the business with a bit of cash to spare I would roll out a separate brand focussing on ‘youth culture’ with a nod to the current product mix (except games) but with a dominant fashion offer ala Urban Outfitters (who used to have a music concession in store).
    I would downsize the existing HMV brand portfolio significantly, increase the range and try to appeal to the diehards and chart shoppers. At Christmas (40% of the sales when I was there) I would then open ‘pop ups’ with a chart (and supplier supported) only offer in the towns where there is sufficient demand.

    I doubt there is enough cash to do this though, what they really need is a Russian Oligarch…
    Cheers,
    Jez.

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