The appointment of David Alder to the new position of brand development manager at Virgin Megastores is the latest move by a music chain to maintain profits in a sector witnessing low growth and increasing competition.
Our Price, HMV and Tower Records are also looking at ways to extend and differentiate their brands to ensure all the music-buying public are catered for.
In general terms, they aim to improve the record-buying experience, give greater customer choice and target specific niches more effectively through online services and new store formats.
Alder took up his new position on Monday, joining from sister company Virgin Cinemas. He says he is aware the 1.8bn music retail sector is “very competitive” – supermarkets’ share has soared to more than 9 per cent and direct selling from record label to end-user is just around the corner. Virtual record stores, unconnected to a retailer, are already a reality on the Internet.
Alder is keen to exploit the value of innovation for which the company is known. Virgin Mega-stores is piloting a listening-chair, created by Priestman Goode, which allows customers at its King’s Road flagship store to listen to an album while seated. Meanwhile, Redjacket is working up two new formats for Virgin Megastores. One, a mini-format of around 1020m2 will be located in areas such as shopping malls which are more likely to be frequented by older, less experienced music buyers. The first of these will go live in the Bluewater shopping centre, due to open next March.
It has been reported that Tower Records is also planning a mini-format, named Tower Express. A Tower spokesman declines to comment on these reports.
Virgin Megastores’ other new format will be aimed more at the funky, 18-34 market, says Redjacket principal partner Martyn Bullock. This will go live in Glasgow in November next year.
Meanwhile, Diefenbach Elkins Davies Baron has created new interiors and identity for Our Price. “The new logo and interiors build on Our Price’s historic positioning of comfort and accessibility,” says Our Price commercial director Neil Boote.
“Initial research [carried out by What If] showed that a lot of people, even if they are used to record shopping, get a bit lost in record shops and need a little more guidance. The new-look stores place a good deal of emphasis on clear signposting and are laid out to make things as easy to navigate as possible,” adds Boote.
The first new-look format will go live in a new Edinburgh store on 19 November. The facia will sport the evolved logo.
Boote says the speed and extent of roll-out to its 220-strong chain is likely to depend on whether the mooted management buyout of Our Price from Virgin Entertainment goes ahead.
Despite all this design activity, Verdict Research senior analyst Clive Vaughan says branding in the music sector is less significant than in many other areas of retail.
“Customers are driven by music, not shops. If there’s a great band, people will go to the garden shed to buy it,” he says. “Our Price doesn’t look like it’s going to get very far [with its new format].”
He argues that the future of music retailing could lie in entertainment stores, which would stock a wide range of videos, games, books and merchandise in addition to music, rather than in creatively branded outlets.
He says HMV and Virgin are likely to dominate the scene in the future, quite possibly through link-ups with major book chains, and cites the Borders format on London’s Oxford Street as the first example of many. Borders comprises a book store, cafÃ©, magazine area and music, all under one roof.
HMV, which launched a revamped flagship store by Greig & Stephenson at the end of last year, is rumoured to be considering a joint store with HMV Media Group stablemate Waterstone’s (DW 7 November).
An HMV spokesman says the revamp is intended to make the store easier to navigate, and that elements are likely to roll across some of its 108 UK branches. He declines to comment on plans of a link-up between HMV and Waterstone’s.
But, an industry source says he would be very surprised if that and other similar link-ups don’t begin to happen very soon.
Most in the industry agree on one thing, however. A report last year from Verdict predicted that “online ordering services will become an important part of the revenue stream” and advised retailers to exploit the medium.
Since then HMV has launched an online service, with Tower expecting to launch one, created by its in-house team, in the next two weeks.
Meanwhile, Virgin Megastores has just appointed San Francisco group Adjacency after a creative pitch involving around six other “major” UK and US consultancies. This gives some indication of how important the retailers see the role of online record shopping.