Can HMV turn improving brand sentiment into sales?

It is a year since HMV was bought out of administration by Hilco, saving 141 of the high street retailer’s stores and its online presence. 


At the time, the HMV brand was at an all-time low. It has recovered over the past 12 months but it continues to lose share in the entertainment market.

HMV is launching a new marketing campaign on 18 April, returning to cinema advertising to promote its American box sets to coincide with the launch of the new Spiderman film. The “HMV presents Superheroes” spots, created by Bolder Creative and media agency the7stars, follow a previous campaign in January called “HMV presents awards seasons” that aimed to use interest in the Oscars and Baftas to showcase the range of films it sells.

That chimes with Hilco’s objectives to “go back to its roots” when it bought HMV. It has also unveiled a strapline “The home of entertainment since 1921” to build on its association with the history of music and film.

The brand bounces back

The focus on its core music and film offering does appear to have had a positive impact. Its brand’s reputation has improved from seven-year lows, with increases across the full range of metrics on YouGov’s Brand Index. Compared to a year ago, Buzz around the retailer, a measure of the positive and negative things said about the brand, has increased to -1, from -17.9, an increase classed as “statistically significant” by the pollster.

Its index score – a measure of how consumers view a brand in terms of impression, quality, value, satisfaction and whether they would recommend it to others – is also up to 9.5, from 2 a year ago, again statistically significant. However, its scores are still below the levels reached before HMV when into administration.

Despite the gains in sentiment, HMV is losing share in the UK entertainment market. For the 12 weeks ending 22 December, Kantar Worldpanel estimates that HMV’s share of the market declined to 12.5 per cent, down from 21 per cent a year ago. It does have fewer shops now than it did then, at around 120, but analysts estimate that this does not account for the sharp decline.

Louise Howarth, retail analyst at Planet Retail, says: “HMV has closed stores but their like-for-like sales are declining too because people are heading online and buying digital music from likes of Amazon. Subscription services like Spotify are also having a big impact on the retailer. It’s tough for HMV,” she says.

Experiencing the music in-store

HMV reopened its original store at 363 Oxford Street in October as a flagship, showcasing a shopping experience that aims to move the retailer away from its reputation for stacks of DVDs and CDs piled high and sold cheap.

There are features to make the shopping experience easier to navigate, including “New and trending” and “Trending this week”, and an attempt to add some editorial input through “HMV loves” and “Unexpected pleasures”. There are also attempts to appeal to the local shopper with details on upcoming gigs, as well as new merchandise areas selling band and film t-shirts and posters.

Speaking back in September, HMV chairman Paul McGowan said HMV is “reconnecting with the music industry and bringing the brand full circle” through a focus on engagement, curation and content.

However, Jess Swinton, a consultant at Brand Union, believes this isn’t actually happening in stores yet, leaving consumers with no reason to go in-store.

“If HMV is going to make a name for itself again and drive footfall it’s got to stand out, resonate with its audience and offer something that can’t be done online. The brand has a great opportunity to own the experience of music, which online simply cannot do. It needs to create in-store experiences unrivalled in the industry while also ensuring they are connected to the modern digital shopper,” she says.

Both Swinton and Howarth cite the example of brands such as American Express and O2, which use exclusive access to music and gigs to boost customer loyalty. If HMV is to prove its worth, it must do the same by celebrating new releases, holding in-store gigs and embracing new technology such as, which uses sound to push content to customers and has been trialled by brands such as Topshop, to prove it is on the cutting edge, rather than playing catch-up., they say.

The gateway to its website

Another of the problems highlighted is HMV’s website, relaunched last year, with some pointing out that you can’t actually buy HMV’s inventory on its website. People can download tracks and access content and information on new releases but they can’t actually buy CDs and DVDs.

Michelle Li, senior research executive at River Research, says: “HMV is losing the battle at the most critical consumer touch point. As ecommerce has become increasingly dominant, stores should be the gateway to websites, not the other way round. Relying on in-store purchases is clearly not the wisest strategy.”

At the moment, online seems to be a bit of an afterthought for HMV’s management. There are a few small links to the website in on-shelf in-store advertising but no heavy promotion.

HMV says it plans to increase its “transaction capability” over time and make the website more personalised, but with the retailer already losing share to online rivals it needs to get that sorted sooner rather than later. Both Li and Howarth believe HMV will also need to start competing with subscription music and TV services, which are increasingly how people access music.

Li also suggests that HMV’s new tagline “The home of entertainment since 1921”, while successfully conveying its position as an entertainment retailer, isn’t strong enough to win back consumers that are digital first.

She adds: “With a strong brand heritage, HMV could leverage the appeal of emotive nostalgia and attract consumers with a niche proposition and great experience, in conjunction with interactive virtual stores enabling purchase of digital content in store and online platforms enabling purchase of CDs and DVDs,

The message? Hilco needs to use all these triggers – a unique in-store experience, unrivalled online store and access to unique content – if HMV’s improved brand image is to translate into improved sales.



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