Since opening its first-ever store on Oxford Street in 1921, HMV has been a mainstay of the British high street and over the years has solidified its position as an iconic entertainment brand. The retailer is synonymous with music and films and has been the place that many Brits bought their first album or movie.
However, while there was a time that HMV could easily rely on sales of CDs, DVDs and Vinyl to sustain itself, the growth of Amazon and other digital competitors like Apple Music and Spotify has caused the company to fall on hard times. In the past ten years, the retailer has fallen into administration twice, restructured itself once and most recently changed hands to Doug Putman, chief executive of Canadian chain Sunrise Records for £7.6 million.
With the pandemic accelerating the shift from brick-and-mortar to ecommerce, the decision by Putman to mark the company’s centenary by opening ten more HMV stores and to find a new London site for a flagship store following the closure of HMV’s heritage Oxford Street store in 2018, is confusing.
All the data shows that COVID has greatly accelerated the irreversible growth of online shopping over in-store. HMV’s business model appears outdated against the plethora of streaming services that have risen in recent years. In short, ten new stores won’t be enough to overturn HMV’s fall from grace.
The importance of omnichannel
Whilst the specifics surrounding these new locations remain under wraps, there is a way that HMV can make its shops a success. Instead of opening stores and hoping that they can capitalise on the short term bump in footfall post-lockdown, HMV needs to create an omnichannel retail strategy in order to drive growth long term.
Omnichannel retail strategies are a multichannel approach to sales that focus on providing a seamless customer experience whether the person is shopping online from a mobile device, a laptop or in a brick-and-mortar store. With research from Harvard Business Review finding that 76% of customers use multiple during their purchase journey, it is clear that HMV can use omnichannel to support their ten new stores.
For example, the entertainment retailer can use local inventory ads on platforms like Google to entice customers to nearby stores to check out products they had previously shown interest in online. They can also ensure that search campaigns are optimised for high intent search terms around specific products (e.g Vinyl The Clash Combat Rock) in order to capitalise on people price checking products after they browse in-store.
Focus on Google Shopping
HMV also needs to work on boosting its ecommerce and digital strategies. The company led the way by becoming the first music retailer to launch a transactional website in 1997 but have since been eclipsed by ecommerce competitors, particularly Amazon.
While the retailer doesn’t have the resources to outcompete Amazon over convenience, it can remain a relevant place for customers to buy DVDs and Vinyl through Google Shopping. The platform is vital to the success of any brands’ online strategy as it allows customers to find, compare and buy products across different retailers who have paid to advertise on the service. The channel is particularly valuable for customer loyalty, as potential customers are driven to a retailer’s own website to make a purchase, rather than marketplaces like Amazon and eBay.
For HMV, Google Shopping could help the brand capitalise on the overarching shift from brick-and-mortar to ecommerce. With shoppers increasingly looking to Google and other platforms to search for products, HMV can use its brand recognition alongside advertising on Google Shopping to entice customers and increase sales.
While HMV marks its centenary with fanfare and announcements to launch a new flagship store, it remains unclear whether the retailer will last another 100 years. The grass has been growing under the entertainment retailer’s feet for a long time and without Google Shopping and an advanced omnichannel strategy, the company is unlikely to achieve relevance to customers looking to purchase products online.
Liam Patterson, CEO and founder at Bidnamic