Wednesday, March 14, 2007

HMV's great new idea: Selling coffee

HMV continues to spin down the spiral, unable to even launch a three year recovery plan without issuing a headline-stealing profits warning instead.

So, what's HMV's big idea, then?

The most radical plan is for the transformation of its music retail business into an "interactive" store aimed at restoring HMV's image as a fashionable place to hang out. "Record shops used to be places that people would hang around and spend time and money. We don't give them the space to do that any more," Mr Fox said. He added that physical music sales are expected to decline to around a quarter of its sales by 2010 from 35 per cent in 2006.

HMV will install "refreshment hubs" in its music stores where customers can play computer games, log on to internet sites and make music compilations that can be burnt on to CDs while sipping coffee and juices. It will also launch its own social networking site which aims to blend the user-generated content model of YouTube and MySpace with access to copyright material that can be purchased via the site. It has already signed up Universal Music and 20th Century Fox to provide material for the site.

Is there a single five year plan document issued by any company these days that doesn't mention "MySpace/YouTube" in it? There's no indication that we see that explains why the public will flock to create their content on the HMV site rather than one of the sixty-three billion other websites relaunching themselves as Web2.0-style MySpacesque entities - and we're not sure "this is the website run by the shop where your grandad used to buy his records" is going to cut it.

So, to succeed or fail, it'll depend on the stores managing to reinvigorate the brand - and that's where the problem is. HMV stores are horrible places at the moment - cluttered, dark, noisy, clashing musics hammering over each other. And this where HMV believe people will want to sit, sipping coffee and listening to the new Dido album? Can't quite see it myself - not when every bloody store on the High Street has opened a coffee bar ("Even if you don't need to bury a loved one, why not pop into Unsworth's Funeral Director for a muffin and a cappuccino?").

You want a radical, turnaround plan, HMV? Why not turn yourself into a musical Argos - keep all the CD and DVD stock out the back, people come in and order from a catalogue. You could stock ten times the stuff you do now because you can fit more in when it's not on display, and pitch it as "Why wait for Amazon to deliver - come and get it now." Throw in a pledge along the lines of "if it's not in stock when you come, and it's on release, we'll post it to you for free." Challenge Amazon on its strength - breadth of stuff - and its weakness - the delay between order and delivery, and you might just have a compelling UPS. Sticking in a Costa Coffee and allowing people to upload mobile phone videos of themselves farting, and you might as well book a trip to the vets for dear old Nipper.


5 comments:

Michael said...

So Starbucks are selling music, and HMV are selling coffee: I would say that they should stick to what they're good at, but that would presuppose that either of them were any bloody good at anything

James said...

Dammit, I got really excited as I read the suggested business plan, before realising it was just a suggestion...

It's a great idea - Presumably they'd save money on it (I'm no expert but surely a big warehouse full of racks and a couple of stock pickers is going to be cheaper to run than a two-storey fully-fitted shop full of stock displays and racks), so the prices could come down. Surely someone at HMV has spotted that there might be a link between plummeting sales and the fact that they charge £16.99 for something you could get for a fiver on CD Wow?

I agree on the speed too - Despite pratically living on the internet and being a complete tightwad, I'd rather buy a CD from a shop and listen to it on the way home than wait 3 days for it to arrive (although online retailers, in conjunction with the Royal Mail, do offer a handy service in which they smash out the CD case's teeth prior to delivery, saving me the bother).

What I don't want is to see yet another huge area of a record shop cleared of music to make way for some grotty sofas, a dirty X-Box 360 and the Nuts-reading dregs of society stinking the place out whilst exchanging happy-slap movies and getting sweary when they discover the internet terminal has blocked access to their mate's collection of 'Balls of Steel' clips on Myspace.

Tim Footman said...

"...aimed at restoring HMV's image as a fashionable place to hang out..."

How can you restore something that never existed? Dear old Gennaro Castaldo seems to be suffering from False Memory Syndrome.

Jim Jam said...

I loved your idea about their plan:


You want a radical, turnaround plan, HMV? Why not turn yourself into a musical Argos - keep all the CD and DVD stock out the back, people come in and order from a catalogue. You could stock ten times the stuff you do now because you can fit more in when it's not on display, and pitch it as "Why wait for Amazon to deliver - come and get it now." Throw in a pledge along the lines of "if it's not in stock when you come, and it's on release, we'll post it to you for free." Challenge Amazon on its strength - breadth of stuff - and its weakness - the delay between order and delivery, and you might just have a compelling UPS.


I don't just mean to blow sunshine up your ass, but that really is good stuff. I hope they read blogs.

Franco said...

Whisper it quietly, but when I'm not reading blogs in work time, I'm the MD of a limited company and that business idea sounds spot on. What's Castaldo's email address?

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