Monday, 24 November 2014
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How (and why) to rescue HMV

Should ailing high-street brand HMV be rescued? Guest blogger Steve Price says it should. Here’s why and how.

Steve Price

HMV chief executive Simon Fox recently suggested that the company’s 8 per cent year-on-year decline in sales was cause for optimism thanks to its diversification into technology products such as tablets, headphones and MP3 players; but plenty of stores already do this. For a company that made a £36 million loss in the six months running up to Christmas and with a ever-declining share price (circa 2.95p, valuing the business at £12.5m), this is an Elastoplast solution on what is clearly a gaping wound. What it needs is a brand overhaul and a consumer experience rethink.

Can HMV be rescued? Should it be rescued at all? I think it can, and more importantly I believe it should be.

The high street is losing it’s personality and bastions like HMV should try to avoid following in the footsteps of Woolworths for fear of aiding the prevailing homogenisation. We still need tangible experiences that are partly fuelled by serendipitous nature of shopping.

HMV is a big chain, and its first step should be to close many of its provincial stores to reduce further financial exposure. This will reduce losses and allow for re-investment in the cherry-picked stores that remain. How could these now aging, almost archaic stores be refurbished? Let’s use the example of their flagship store on central London’s Oxford Street.

HMV

Source: Bahi P

HMV’s Oxford Street store (reflected on a passing bus)

A friend and I had a race the other day. The challenge was to ask a passer-by to give us an artist, then both of us had to go and buy an album by that artist. I was outside the HMV store on Oxford Street with my smartphone and a 3G connection. My friend raced off into the store. The smartphone won by about six minutes. I was also able to listen to the album (Radiohead) before my friend had even emerged from the store. Mine cost £6.99, hers £7.99 (for a CD which she’d have to take home and play).

Part of the reason my friend took so long (knowing she’d lose) was that she got distracted by many other offers, albums and music. Facebook ‘Likes’ didn’t do that. Amazon’s recommendation engine couldn’t emulate this. Google’s personalised search results couldn’t help her find the other albums and book she bought. Sagacity did. This is something no machine can imitate.

I believe that we are soon going to be jaded by what internet activist Eli Pariser describes as our ‘Filter Bubble’ - Google, as amazing as it is, can only answer the questions you ask it - it cannot tell you which questions you should be asking. Search results and news feeds are all now influenced by engines that take as a point of entry all that they know about you and spit back the information they think you’ll want.

What is on the screen when you open Spotify? Recommendations on new music based on its knowledge of you. What happens if you visit Rough Trade Records? You often leave with albums and music from artists you’ve never heard of, having heard it played in the store, or from talking to one of the employees who clearly live and breathe music. This is where HMV can start to focus and become a trendsetter once again.

In 1971 Richard Branson opened the first Virgin Record store. Aside from its imports from Europe, what made the store unique was the more laid-back, human, physical elements it provided for the customer: old, comfortable sofas and recliners with headphones plugged in to record players. They were seen as insane, that you’d never get rid of people. Branson’s response was, ‘Good, we want them to stay’, because he knew that they’d more than often leave with a record or four. But it wasn’t so much about the sales as it was about creating the experience, seeing the value in servicing customers with a place to come a spend a few hours. It built an enormous business because people bought in to the brand (which has all but deminished, sadly).

We’ve seen this trend follow online. Facebook with its chat, its video and soon film, Google with it’s many applications, Google+ with it’s hangouts and group video, YouTube with everything film-based and now rental films, iTunes all vying to captivate your attention. They want you to have as little reason as possible to leave their site. They want you to sit back in your recliner, get comfortable and stay there, where they can keep their eye on you.

With a few interventions - physical changes such as soft, low, comfortable seating with powerpoints for laptops, free wifi and coffee concessions and digital changes such as tie-ins with Spotify and iTunes, HMV can also be a place where people will want to be.

HMV hasn’t lost its voice - it’s just had laryngitis. It’s time time for it to suck on that lozenge, clear its throat and regain its voice.

Steve Price is founder and creative director of Plan-B Studio.

Readers' comments (16)

  • Few too many apostrophes for me ;)

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  • Hello Steve - thanks for sharing your insights and for caring about our brand. There's a lot of points I agree with, and, in fact, we're working on some of those very ideas - lozenge to the ready. Kind regards, Gennaro Castaldo (hmv Head of Press & PR)

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  • Coffee section, ice-cream bar for summer are a start. Download section with physical steel-book style packs that go with all downloads. I'd always by a download from HMV store if they gave me steel-book with album art, lyrics, artist album interview, picture cards etc.. I'd even be willing to pay £9.99 for new albums. I want HMV to succeed, I spend at £20 a week in there on DVD's and music. The prices are real good now.

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  • "This will could reduce losses"

    "it cannot tell you want questions you should be asking"

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  • Thanks sub-editor! (Which should be hyphenated, by the way…) These have been corrected.

  • I agree about the poor use of the apostrophe but agree with some of the points made here. The company needs to be more customer focussed (to use the jargon of today). It has lost its (no apostrophe) way. It does have enthusiasts working in its stores and their knowledge is often very useful but it can be let down by not having the CD you want in stock

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  • He's using up the ones for which Waterstones have no further need. If he's going to get it wrong, though, he should at least do so consistently.

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  • My lawyer has informed me to make you aware that no apostrophes were harmed during the writing of this article.

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  • I agree that HMV needs to get people in to their stores but is turning them in to coffee shops selling music the answer?

    When I used to go to local music shops it wasn't just to buy cds, it was because they were the hub for music in that area. The point made about Rough Trade Records is a good one, people will go there to be part of the local music scene, but is HMV in a position to be this?

    Can HMV be the new 'local music expert' and do they even want to? What I do know is that the last thing the high street needs is another coffee shop.

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  • I agree Paul. To be honest it was one idea of many that were omitted so that I can go and meet with them to discuss. Don't want to give away all the secrets.

    Suffice to say the current 'Stack 'em high' route is no longer working, and has made them appear like the pound shop of high st music.

    Like you I used to go to music shops for inspiration and to explore. I have done less of that because I am older, I work more, travel more and don't work near stores to waste my lunch hour. But lots of people still do, and I think by opening up the stores, and returning to their original values wouldn't hurt.

    Otherwise we have another Woolworths and Kodak on our hands. As Mr Manchipp says 'Brands (and their branding) need to be speedily adaptive or risk becoming irrelevant.'

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  • Turn it into a web café and venue then.

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