It’s not often we’re treated to a bona fide good news story in retail, but Hilco’s rescue buyout of HMV most definitely qualifies. First, Hilco have an excellent track record with these things and, secondly, hopefully some of HMV’s amazing team will be retained to help paddle the boat back upstream. I worked at HMV for a short time and, take it from me, some of the people there are the most extraordinary, passionate and gifted folk working in retail today. We wish them the best of luck.
But – and you knew there’d be a “but”, right? – if HMV wants to rise from these ashes, some pretty critical things have to change. And we’re not convinced that refocusing on music and entertainment is the be-all-and-end-all solution some people are suggesting (remember: HMV was forced to trade in tech and other lifestyle items because entertainment was effectively being sold as a loss-leader by its rivals). Nor is some mad dash to catch up with old technology the answer. It’s easy to say that HMV missed the boat with ecommerce and downloads, but that’s not strictly true: for every Spotify, HMV had an HMV Jukebox. For every Blinkbox, it had an HMV On Demand. It did all that stuff but, when you’re a public company, it’s damn tricky to out-innovate the pureplays and startups. Shareholders tend to hate five-year loss-making investments in ‘the future’.
But there are five very simple – and crucial – things HMV could do to up its game. In fact, they’re salient lessons for anyone in retail, things we all need to be thinking about NOW. Are you sitting comfortably? Then we’ll begin…
1) If you’re not selling via social, you’re missing out on the biggest opportunity in retail today. Social commerce in 2013 is what ecommerce was in 1996 – a total game-changer which takes a pre-existing marketing platform and turns it into a sales channel. People don’t shop in social? Well, people didn’t shop on the internet until some bright sparks in America invented eBay and Amazon. And now? We don’t even think twice about it. So, HMV needs to explore how to sell to the hundreds of thousands of fans and followers it has on Facebook, Twitter and other social networks. It needs to sell to them socially, turning each of those fans into virtual salespeople, entertaining them, capturing the thrill of shopping with your friends and delivering that in the online world. If any brand can do exactly that, it’s HMV. It’s in their DNA.
2) It’s 2013. Deals don’t drive customers. Customers drive deals. The days of you having the choice which promotions to offer are long gone. Your customers will tell you what they want: which products, at which prices, at what times – you just need to ensure you have the flexibility, the staff and the platforms to give that to them. Invest in being able to listen and to react, and strip back all that spend on prescribing. Strip it back to zero.
3) Similarly, online needs to drive offline, not _the other way around. If you still have a huge chain of brick and mortar stores, you need to think about why they’re festooned with ads for your digital channels. What you’re saying is: “Thanks for coming into our store, now get back on your computer and never darken our doors again!” Doesn’t that seem weird to you? Think about the success of click-to-collect programmes (especially Argos – who were _years ahead of everyone else) and build that into everything you do online. How can your stores save you money on fulfilment, how can they enable better and simpler customer care, how can they help you deliver what Amazon can’t? But don’t go thinking that footfall is the starting point anymore. It isn’t. Your stores are now an add-on to your website.
4) Stop paying more for advertising than you make in margin. I’m seeing this over and over again – unclicked ad campaigns, massive spend on… what? Noise at best. Certainly no click-through, no conversion and no ROI. Especially if you’re advertising on social networks, your ads need to be social, they need to engage. The calls to action need to be join, share, create, not buy, buy, buy. You need to empower your audience to do your advertising for you. It’s more effective, it’s more genuine and it’s much more efficient.
5) You need to surprise and delight. You absolutely need to. Look at the massive buzz Amazon (them again) created with their Cloud Player announcement last year – free digital copies of everything I’ve bought for the past 15 years? Wow, Amazon, you’re awesome! Now, as a retailer, you almost certainly can’t compete with Amazon on price (and I think we all know why), but you absolutely must compete with them on bringing your customers joy. So, what are your plans for that? What are you going to do next week, next month, next year?