Following on from Andrew Dubber’s blog post on the death of music retail, this month’s Word Magazine has an excellent nine page feature on the subject, with David Hepworth mussing on what we might be missing if the record store dies. Hepworth makes some interesting points:
Our passion for music was bred out of scarcity (talking about the 1960s). The fact that it was so hard to find out about, hear and most of all own music is what fed our fever and placed record shops at the heart of our dreamscapes.
It’s a long time since record stores have been temples. The massively stocked megastores of today stand in the same relationship to the little kiosks of the ’60s as out of town mutliplexes do to the funky little fleapits of our memories. They are efficient, convenient and well-run but they have, let’s be honest, not much in the way of romance about them..
The megastores are now facing a challenge not just from downloading and supermarkets, but also from their own scale. The staggering range of the deep-catalogue retailers can result in customer bewilderment and numbness.
It was interesting that in the same week Simon Fox, the new chief exec of the HMV group, announced a six-point strategy to improve HMV’s financial woes, which saw the retail chain £16.1 million in the red in the six months up to October 28. Their ‘new’ strategy is:
- Drive online growth - HMV online accounts for only 6% of the chain’s sales, but is expected to reach double digits in six months (however what percentage of this will be downloads compared to the online retailing of physical product?)
- Build customer following - by introducing a loyalty card scheme
- Add new product categories
- Create inspiring store formats
- Improve supply chain
- Exploit group synergies
Their online download offering has been less than spectacular, with their subscription service a relative flop (Virgin Megastore’s subscription service grabbing a bigger market share than HMV’s), forcing them to launch a more straightforward a la carte service late last autumn. However, HMV’s share of the download market still pales into insignificance when compared the mighty iTunes store. And with US No. 2 download store, eMusic, now offering a full UK service via a unique subscription offer (I get 90 downloads for £13.99 per month - less than the price of 2 albums from the HMV download offering), it makes we wonder if HMV have overestimated their brand equity, as well as underestimated the competition in the digital space? They must be hoping that the major labels drop DRM asap, as this is one of the few ways to level the playing field, and for HMV to leverage their retail experience.
Fox’s plan does try to attack some of the chains biggest problems - brand equity not translating to online (download) sales, an outdated and less than inspiring in-store experience, high price’s compared to online AND the supermarkets, and the lack of convenience compared to both of these retail channels. However the download market, which will be key to their long-term survival, is becoming increasingly dominated by global or at least
pan-European players. But will these new strategies help them reinvent the physical brand, as well as
stretch HMV’s brand equity in a global digital space?
It’ll be interesting to see if this particular old dog can learn some new tricks and survive, or will it need putting down at some point over the next 10 years?
Nick Watt - Citizen Sound
