Is there a future for Britain’s last high street music chain?

When HMV finally completed its sale of Waterstone's last week (for substantially less than it had intended), attention immediately turned to reviving the flagging music and entertainment store.

Amidst the furore surrounding the sale of its bookstore arm, the fact that HMV’s sales are actually worse than Waterstone's had almost been overlooked. And with sales continuing to plummet, it seems as though it might be just a matter of time before the entertainment giant finally collapses.

A Sunday-afternoon saunter through its flagship store in Oxford Street this past Bank Holiday weekend highlighted some of its more obvious problems. With CD and DVD sales dwindling (more on that later), the decision was apparently made to focus more on ‘technology’ side of things – iPods, laptops, computer consoles and the like. However, the ‘tech zone’ in the store – which has been devoted a sizeable chunk of space on the top floor – was completely deserted. Customers just don’t think ‘technology’ when they think HMV, and that’s something that needs to be addressed before it’s too late. A complete re-branding exercise might prove costly, but could be the only option if this is the route they intend to travel down.

I also took issue with the prices. In this Internet-shopping era, I’ve come to accept that I’m likely to pay slightly more in an actual store than I am on its online counterparts – which I don’t actually mind on occasion, as I still enjoy the notion of physical, high-street shopping. What I can’t tolerate, however, is the sheer scale of the mark-ups in some instances. A DVD box set I’d seen advertised on one of HMV’s rival websites for a paltry £8.99 was tagged at £35 in this HMV store; and was unsurprisingly gathering dust as a result.

Along with 389% price hikes such as these, we’ve also become a much more patient society (in one respect, at least). When Internet shopping first reached prominence in the early 2000s, many customers were dismayed by the average 3-5 day delivery time; especially when, up until that point, we were accustomed to taking home our purchases immediately. However, with the passing of time, we have seemingly become more patient (or merely resigned) to the fact that we will have to wait several days, and it’s no longer an abnormality. Indeed, with cost-savings the size of the aforementioned to be had, it’s no wonder that more and more of us are learning the art of patience.

It’s hard to see what more HMV can do to attract the price-sensitive customer in all of us short of a radical rethink, the like of which current management seems unwilling to consider.

- Simon Rowley

Published June 2011