So HMV’s in trouble, having posted its third profit warning. Conversations about divesting itself of Waterstone’s and HMV Canada are taking place against the background of tumbling share prices and closing stores.
But, here’s the thing. I’m not surprised. And it’s got nothing to do with the increased appetite for digitalisation that’s so often talked about. It’s to do with a marketing and in-store retail strategy that seems to be more on the lines of Woolworth’s than anything else.
HMV needs to change. And I think I know how.
1) Why does HMV exist?
Is it a music retailer? A film retailer? A technology retailer? A clothing retailer?
The company’s recent diversification into new retail areas leaves me – and I’m betting other consumers – confused. No single company can be an expert in all of these areas and increasing product portfolio to try and boost sales smacks of desperation.
Added to this is the really annoying phenomenon of youths playing with iPads that they, in their pre-pubescent states, probably can’t afford, getting in the way of those of us who might be interested. But on that note, why would I buy an iPad from HMV in the first place? There are plenty of other great outlets which will chuck in data deals and so on that HMV just can’t match.
2) Too many products
Going into any HMV store is a nightmare if you’re just in the mood to browse. Racks and racks of CDs and DVDs await you, along with POS, aisle-end and other promotions. Unless you’re focussed on what you want, the choice can be overwhelming.
And this leads to other problems as well. Three times in the last year I’ve strolled in to get a particular album. When I’ve plucked it from the rack, I’ve discovered the same album – at a different price – just behind it.
If that hasn’t happened, I’ve found the full RRP version clutched in my hand in a “2 for £10” deal somewhere else in the store. The poor store staff can’t possibly keep track of all of the different products, prices and locations. It takes about fifteen minutes to check all of the possible locations that the album might be to ensure that I’m not paying over the odds for it…
Frankly it’s more satisfying to go to a good independent retailer. Or even Tesco.
3) Stack ‘em high, sell ‘em cheap
This seems to be the HMV mantra these days. In all of the stores I’ve visited recently, DVDs especially are stacked right down to the floor, some on their sides. Think of all of the times that you reach down to pick something up off the floor. Chances are it’ll be dog poop or rubbish blown out of your pocket.
Not someone’s creative work and something that will bring your many hours of pleasure. Piles of reduced priced products devalue everything that’s sold within, not just that item.
4) Poorly thought out in-store technology
In years gone by, listening posts provided a great deal of my new musical acquisitions. In fact, I even bought something off the last listening post I found (a Karen Elson album. Not too bad).
Now, HMV have these white touch screen things which (if the screen works at all) invariably don’t have any of the sample tracks from any of the albums on their aisle-end displays. I don’t have the money anymore to chance a tenner on an album that looks good but from a band I’ve never heard.
Poor store technology is bad for browsers. And browers probably buy more than they thought they would (as opposed to those who go in for one specific thing).
5) Anodyne experience
At its core, HMV should be an experience brand. After all, music forms the soundtrack to many people’s lives and watching a film is a popular leisure experience which can challenge, entertain, provoke or emote.
Any store, anywhere in the country, feels the same to me. They just put their floor standing piles in a different location.
6) Poor communication of loyalty card points.
I don’t hold an HMV card (although my partner does). I have absolutely no idea why I’d want one and have never seen a communication to persuade me otherwise. Perhaps if I shopped there more often, I would understand, but given the points above, that’s not going to happen any time soon.
7) Price led advertising
Music is about experience, man, not price. But every HMV advert I’ve seen in the last year has been price-led. Not a good move when you’ve got Tesco, Amazon and high volume online businesses cutting out overheads.
And continual price promotion is bad for the brand. It makes any brand look cheap (unless they’re a price-led brand, like Lidl).
So, what would I suggest?
1) Become a specialist again.
Stock a few linked product ranges (music, DVDs, headphones and MP3 players), but really know them well. This would mean understanding what the consumer wants, and giving it to them. Ditch the clothes and the high end technology; they don’t add anything (other than higher overheads and reduced floor space).
2) Trim down the number of products within the different ranges stocked, get the pricing right and really know the products in the selection.
You can’t stock everything, so make sure there’s an ordering in service.
3) Sort out the display racking.
No more floor-level products, no more aisle-ends directly in front of the doors, no more mass stacking (which just devalues all of the product).
4) Fix the in-store technology.
Make sure that the information screens have at least one track from every album that can be listened to. And if the product is out of stock, ensure that the customer can input their email address to be notified when it’s in.
5) Make a visit to an HMV store an experience, not a trip to the local supermarket milk aisle.
Localise, give some flavour and colour to the store. Engage with the local community and work out what they need to realise their cultural/leisure ambitions and then find out how the chain can become an experience partner. In this regard, Waterstone’s isn’t a bad model – they’ve often got cafes, seating areas and so on within them, plus areas for local writers.
6) Tell people why it’s great to be a member.
Don’t just make it about saving money, because HMV’s products will always be found cheaper somewhere else. Make sure that the consumer understands they are joining a community, not just a retailer’s promotion.
7) Advertise to people who enjoy your products, not the penny pinchers.
Create advertising that drives people to the store on a point of difference, not because they can save a few pence (which they can do from Amazon without even getting out of their bed clothes).
Times are turbulent out there, of that there’s no doubt. And I do feel sad that HMV – for so long my first port of call for music – is faltering.
But they’ve only brought it on themselves. Let’s hope, for the sake of their employees, that they can turn it around before it’s all too little, too late…
(Yes, HMV people, I am available for consulting gigs. Drop me an email and let’s chat).