High street music retailer HMV is calling in administrators, putting over 4000 jobs at risk. The news makes HMV the latest in a succession of retailers to fall into trouble following a difficult trading period and the challenge from online stores. Dan Wagner, CEO and Chairman of mPowa and Powa Technologies, which is responsible for implementing online and mobile retail platforms for some of the leading high street names, assess the reasons for HMV’s fall.
Although HMV has introduced various promotions to drive sales, the shift in the way consumers are buying goods has had far-reaching implications.
Internet shopping is now more popular in the UK than any other country in the world, with UK spending an average of £1,083 a year on shopping online.
While this is good news for British ecommerce businesses, those that didn’t have a digitally focused strategy from the outset are now playing catch-up and the consequences are clear to see.
Although HMV responded to its changing customer demands by moving towards a technology focused strategy with the sale of headphones and tablets, it appears by today’s announcement that this strategy has not been able to compensate for the fall in CD and DVD revenue.
Competition from iTunes and Amazon seems to have contributed to the fall in sales for HMV.”
Many more retailers could succumb to a similar fate because of the cumulative effect of poor sales throughout the year. Retailers have to stay ahead of the game and have an effective online and offline strategy in place if they are to survive in this new technology-focused era.