On 15th January it was announced that the entertainment retail chain, HMV, is going into administration. Just a few hours after it was made public, thousands of people voiced their disappointment over yet another iconic retailer becoming a victim of the ailing British high street. Especially as the companys 80+ years of business has impacted generations of music lovers.
Ecommerce Websites And Our Love Of Online Shopping The Cause
The main question everyone has is what exactly was responsible for HMVs current downfall? In all honesty it is not too difficult to figure out, with the era of digital growing year on year. 73.4% of music and film is either downloaded or purchased online. There is no longer a great desire for many people to own catalogues of CDs or DVDs when a digital copy can be conveniently stored on their computer or any other media device. Even then, for those of us who still like having walls filled with our favourite albums and films, the prices given by competitor ecommerce websites are far cheaper than HMV.
This is the main problem for HMV, and indeed many other high street retailers who face competition from online stores. With no overheads and tax to pay on a physical property, ecommerce websites can afford to sell products at a cheaper price. This leaves stores like HMV with the challenge of either joining the online battlefield or sticking with their current strategy with some adaptations in order to keep customers buying in store.
Looking at HMVs product range over the past few years, you can see how they attempted to combat the changing climate of the entertainment retail industry. CD sections slowly began to shrink as more people opted for digital purchases from iTunes. DVD sections then grew with many promotional offers running throughout the year. A technology department was then brought in with all the latest entertainment based gadgets. Alongside this were also video games, books and other music based novelty items like band memorabilia. The main challenge however was always based in the online world.
The HMV website had an opportunity to fight fire with fire with ecommerce website
competitors. iTunes benefited from great first mover advantages and other sites like Amazon quickly adopted the selling of digital copies of music. Even online music streaming from companies like Spotify came ahead of physical product purchases. HMV however did not as swiftly adopt digital sales and their pricing strategies often just couldnt compete.
Their chance of survival was also not helped by supermarket chains developing their entertainment departments and selling items at far better prices in many cases.
What Does The Future Hold For HMV?
HMV is currently looking for a buyer as their latest sales promotion, the Blue Cross Sale continues throughout their 239 stores. However customers will have to hold onto their gift cards in the meantime.
Many of us Im sure are hoping for a revival of this iconic British retail chain. Although realistically it is to be expected that some stores will sadly shut down and the way in which the company chooses to operate will have to be revised, with greater emphasis placed on digital and ecommerce website sales.
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