Monday, 6 May 2013
Tuesday, 26 March 2013
Sunday, 17 February 2013
Thursday, 7 February 2013
If one of the core principles of your business needs to be abandoned in order to act out the paracosm, it feels disloyal to even utter it. Sort of like asking your spouse if he's going to remarry after you die... And yet. The most effective, powerful way to envision the future is to envision it, all of it, including a future that doesn't include your sacred cows. Only then can you try it on for size, imagine what the forces at work might be and then work to either prevent (or even better, improve on) that future and your role in it. It's not disloyal to imagine a future that doesn't include your founding precepts. It's disloyal not to.Too often people lose sight of their vision and get caught up on the way they have been doing things. Yesterday's strategy, rather than tomorrow's. We end up trying to amend and evolve rather than returning to the twin questions of "What are we trying to do?" and "What is the best way to do it".
Wednesday, 30 January 2013
When the very first HMV opened in 1921 its vision was about one thing: gramophones.
But the entertainment industry changed and with it the vision of the brand expanded and evolved. But unfortunately somewhere along the line the vision of what the company was about either got lost, or it grew so flabby it could no longer keep up with the pace of change. And so gramophones became records, became records and tapes, which became records, tapes and video cassettes, which turned into records, CDs, tapes and videos and which continued to add things all falling under the banner of entertainment. Records were phased out but DVDs, Blurays, computer games, t-shirts, books, mugs all got added. And the chain started acquiring bookshops adding Waterstone's to Dillon's and later bringing in Ottaker's too.
So to return to the question, what exactly was the vision of HMV? Did they express it any more precisely than to be the leading retailer of entertainment products?
Such a broad range of stock doubtless worked well at the big stores, but at the smaller stores it was fatal. The stores stayed the same size, but whereas originally they had housed two or three types of product, they ended up selling many more. Stores went from being half full of CDs to having to squeeze out the CDs to accommodate the DVDs, games, books and mugs which meant that those that went in to buy a CD had a much smaller choice. Fine if they were desperate for anything. Or if they wanted to support the high street despite having no real interest in the product, but long term the cloudiness of HMV's vision meant that they were compromising on their service. No longer able to offer a significant chunk of the spectrum at the very moment the spectrum was broadening rapidly.
Looking back the decision to takeover Waterstone's and then Ottaker's looks particularly foolish. I'm not sure how they acquired Dillon's in the first place, but it was clear by the time that HMV took over Waterstone's in 1998 that book shops were going to be in as much, if not more, trouble than music stores in the long run. Amazon were up and running and the memory required to transfer the text of a book was always going to be less than that required for a CD.
But it was always the decision to reduce the amount of space dedicated to music, particularly for games, that I think was the most costly. They never really went for it - games were always at the back of the store, and the variety of formats and consoles and the speed of change meant it was a bad area to get into. Ever bought a computer game from a supermarket?
The lesson is to keep your vision lean and focused. Diversity is not necessarily a bad thing. The main supermarkets have diversified more and more without hitting the buffers. But HMV's vision didn't account for critical factors, such as store size and ultimately what it thought it stood for differed from what its customers thought it stood for.
Wednesday, 23 January 2013
We used to have a Virgin in town. Then Virgin became Zavvi, Zavvi went bust and shortly afterwards became an HMV. But nothing changed. Apart from a change in branding and colours the set up was exactly the same. 'Sale' items close to the door, a not particularly easy to navigate layout. It was probably the same racks and tills as the Virgin ones all those months before.
This fact highlights two big problems with HMV's strategy. Firstly, they failed to remember that Zavvi went bust. Why do everything the same as a company selling the same stuff as you that has just failed? Perhaps the people at the to assumed Zavvi's customer's would come over to them, and in small town's like mine they probably did to a certain extent. But no-one seems to have questioned why Zavvi went bust (aside from blaming the internet).
More importantly it highlights HMV's failure to be distinct. What did they stand for. Some of those questions I want to look at in the area of their vision, but even when compared to companies that shared their vision (such as Virgin/Zavvi) how was HMV any different. Occasionally it got box set deals that no-one else did, but otherwise there was no craft, innovation or identity to their sales. They weren't cheap enough to beat Amazon and iTunes. They lacked the love of their product like the record shops they had ousted.
This really left them only three markets - technophobes, those buying £3 DVDs who couldn't be bothered to see if Amazon did it 50p cheaper, and people buying presents at the last minute. Those are three fairly small markets, and shrinking ones at that.
Or look at it another way. Back in the days when a decent town centre might have an HMV, a Zavvi and an MVC/Andy's records, what proportion of customers cared which they were in? Once the Internet could do snigger selection quicker then without being in any way distinct, HMV were done for.
Thursday, 17 January 2013
I've heard many people talk about their love for HMV over the last few days and about happy memories of visiting the store.
The problem is that they were all in the distant past.
I've had people talk about getting expert advice from staff, or discovering something new, or even just the sensation of flicking through the vinyl (which really dates things!). For me I remember the experience of the big HMV in Leeds opening and the excitement of all that lay inside. But no-one has talked about any such recent experience.
Somewhere along the line HMV stopped delighting its customers. Some of those delighters became obsolete or got abandoned as not producing a significant return on investment, but without them there was little to give the brand loyalty - to make people love HMV. They just became a retailer selling things which might be more convenient to pick up in town whilst you were there, than somewhere you went to town for. And as getting to town got less convenient, and you could order something cheaper and have it drop through your door without having to leave your seat then HMV got left behind.
I have a few ideas on what HMV could have done to maintain some of this "Experience" and I'll outline them in future posts, but for now the main lesson is this - if you want to do your business away from the internet, you've either got to generate ownership for the customer - to help them feel like they have invested something in your company - or you have to be the cheapest. Sadly by the time they died out HMV were neither.