Struggling retailer to revamp high street business
Struggling high street giant HMV is planning a revamped sales multichannel strategy, alongside an increased focus on electronics sales.
The retailer has announced the opening of a new Cambridge store, which will feature many of the changes that it intends to put in place across its 235 stores, including free wi-fi, click and collect services, and a ‘social media cafe’.
The introduction of social cafes will happen as and when there is a demand, and the ability to fit in with any refurbishments. The Cambridge store will feature free wi-fi in its electronics department – and will be rolled out in the rest of its stores over the next few months, ChannelBiz was told by HMV.
The retailer is best known for selling music, but with physical music sales continuing to dwindle, it has supplied electronics products in various stores. However, with sales of many electronics products growing, HMV is keen to move further into the market of supplying consumer devices such as tablets.
According to an HMV spokesperson, the changes on show in its new store outline the ways it is looking to adapt its high street business.
Part of this will be an increase in the emphasis on hardware sales: “There are lots of new elements we are going to be rolling out,” ChannelBiz was told, “there will be much more expanded technology departments where we have more space devoted to tablets and headphones and so forth.”
Central to HMV’s changes will also be a multichannel sales strategy. This will involve, for example, increasing the ability to buy online and pickup in store, which has proved popular for the likes of Argos. The firm will also attempt to attract more customers into its physical shops as well with free wi-fi enabling HMV to inform customers of specific deals as they enter a store.
The changes signal a change in approach from the retailer as it struggles to survive in an increasingly difficult high street environment. Last week HMV announced that its sales were down 12.1 percent, and reported a loss of £16.2 million for the year.
With online sales giants like Amazon many bricks and mortar shops are struggling, including software and hardware retailer GAME. Many retailers are now attempting to adapt their business in a bid compete with a high street presence.
According Jon Copestake, Retail Analyst at the Economist Intelligence Unit, a multichannel approach is a “key strategy” for retailers, but HMV has a tough time turning its fortunes around.
” HMV has a difficult job ahead,” Copestake told ChannelBiz. “Certainly a change in strategy is needed.
“Not only is the company struggling to compete in the same space as established giants like Amazon and Apple, but the core offering of CDs, DVDs and books are all legacy products set to be superseded by downloadable equivalents.”
He says that the steps taken by HMV are certainly “a step in the right direction”, but adds that “it may be that a more radical change in tack is required to address the underlying challenges the firm faces.
“Taking a more multichannel approach should help sales, although to be honest it’s a strategy that most retail firms are looking to adopt so it will not give HMV a competitive advantage.”
Copestake adds that while attempts to create a ‘showroom’ might increase footfall, that does not necessarily correlate to increase sales.
Stephen Millard at Eccomplished says that the HMV’s multi-channel strategy is an “exciting and bold step, marking the brand’s move from a store to a destination”.
“Their new approach is completely in tune with the way consumers are now behaving online and off,” Millard says, adding that multi-channel retailers are more likely to outperform .
“Consumers love the convenience of online but often also want to experience products, talk to expert staff and be able to choose from a range of delivery and collection choices.”
“We recently highlighted mobile and social as the top two investment strategies for retailers in 2013-14, so it would seem HMV is going further and moving faster than many of their competitors.”