You may well have probably heard HMV went into administration yesterday. It seems there have been too many major high street chains collapsing under the pressure of changes due to the online world and HMV is a prime example.
Being put into administration usually means a company cannot afford to pay its debts, which is also known as insolvency. This could ultimately mean the closure of the 239 HMV stores around the UK. But what has caused this lack of sales, and insolvency, for HMV?
Music has been around for thousands of years, ever since the first cavemen grunted at the stars! But it’s only in the past century when the ability to store and listen to music has evolved:
Music Evolution: Live – Vinyl – Tape – CD – MP3 – Digital Download – Streaming
Video Evolution: Live – VHS – DVD – Blu-Ray – Digital Download – Streaming
Take a look at the last two, Digital Download and Streaming. These have changed the way consumers shop, making it unnecessary to leave the home to listen or watch your favourite entertainment.
Suddenly it has become a chore to leave the home, get in the car, pay £2.50 for parking and enter a HMV store, only to be charged more than you could have bought the CD for online from iTunes or Amazon anyways! It is not only cheaper to buy online but also much more convenient.
HMV have been a high street market leader for entertainment since it opened its first store in 1921 in London’s Oxford Street. But due to the adoption of the online world by companies such as Amazon and iTunes, HMV have seen a steady yet dramatic decline in sales.
It must be pointed out that HMV did begin to change their business model, but as JoJo’s song goes, is it “too little too late”? You may have noticed that they have set up a website to sell their products online (which now has an Administration notice). Well, it turns out that many of their products are cheaper to buy online than in store, making it even less worthwhile leaving the house. HMV had also attempted to train employees to a higher quality to focus on selling more devices, such as speaker docks for playing your music. This worked for a few customers, but the damage had already been done.
Unlike JoJo’s feelings for her ex, the view of consumers in the UK for HMV stores haven’t changed emotionally. I still love the music, atmosphere and knowledgeable and up-beat staff (from my experiences anyways), as it creates a must-visit store whenever I venture to the high street. These are feelings and experiences you don’t get from an online store.
I think yes. However, they really need to change the way they sell to customers. My opinion is that HMV stores should become more of a showroom for customers. Perhaps they could showcase the latest speaker systems for people to try as they have been; show posters in all their glory; inviting musicians for live events (however popular or well-known) and maybe even serving drinks and nibbles! – It’s the experience and atmosphere we go into HMV for, not for the cheap prices as we can get those online from Amazon, iTunes or maybe even the HMV site itself.
The future for HMV is unclear, but by using its strengths of brand and store experience, I think it could survive and even thrive in this new chapter of evolution for the music and video industry.
Do you also enjoy the atmosphere and feel of HMV stores? What do you think could be done to help keep them alive on our high streets? Tell us at @FactoringCentre
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