At the beginning of the summer I was invited to meet with HMV chief executive Simon Fox. The opportunity arose because even throughout a torrid year that contained four profit warnings, I’ve been broadly supportive of the strategy Fox announced in July 2010 to transform HMV into an entertainment superbrand.
The plan was to shift away from selling CDs and DVDs in stores that could be bought cheaper online or downloaded from iTunes in favour of HMV exploiting its own new digital download music portal. In addition, HMV would become known as a brand you could rely on for tickets to gigs and festivals (it already owns a handful of the summer’s largest music festivals as well as some of London’s most desirable music venues). It would even start selling all the headphones, hi-fi, technology and gadgets a music geek could wish to own.
Fast forward more than a year and progress is shockingly lacking. The digital customer journey is somewhere between stalled and non-existent. The pureHMV loyalty scheme has failed to match its early promise. Most stores are still darkened rooms crammed with CDs, DVDs and other assorted bric-a-brac, rather than the gleaming tech items and gadgets that are making so much ground in the retailer’s new Fast Forward stores.
The ticketing process is not easy for in-store staff to administer, while the HMV branding is completely absent from all of the company-owned venues and festivals.
But perhaps the worst thing is that almost all of the communications is about CDs. None of it even hints at the wider “entertainment superbrand” strategy.
HMV’s view has been that “slow and steady wins the race”, that the benefits of waiting until everything is perfect before launching new stuff is better than giving the green light on new propositions before they are ready.
For me, the past year represents a wasted opportunity. HMV is almost irrelevant. To many young people, O2 and Coca-Cola are just two of many brands that are more closely associated with music than HMV.
Fox was adamant in our meeting that he had needed to spend most of the year in a locked room with the banks, managing the company’s debt. Quite right too. But I told him that he needed a business transformation specialist, somebody he was prepared to unleash on the entire operation immediately. Someone who could think like a marketer but act with the reach of an MD or COO.
It remains to be seen if new marketing and ecommerce director Mark Hodginson, joining from Asda next month, is the man for the job. His home turf is the loyalty, data and ecommerce arena. Previously chief executive of Virgin Money, he also has leadership experience that he’ll need to draw on if he is to shake HMV out of its comfort zone. There will be obstacles in his way. He needs to hurdle them fast. This is last chance saloon.