Avoiding retail Armageddon
It started with Woolworths.
The latest is HMV. With Jessops, Comet and a few other British retail institutions in the middle.
There are some clear ways to avoid this.
From my observations, this is where HMV went wrong.
1. Poor diversification. Instead of differentiating themselves from Amazon, they turned into Amazon on the high street. Worst of both worlds.
2. Poor use of real estate. Too many unprofitable stores in high cost areas.
3. Too much stock. At a guesstimate, I reckon 80% of stock had been in store for more than a year. Supermarkets have a name for this. Wastage.
3. No USP. Why shop at HMV? That’s right. No idea.
4. Staff. In years gone by, you’d talk to the staff. They were experts, enthusiasts. Latterly, they were unapproachable minimum wage kids. Money saving in the worst possible area.
5. Stores. They were shitholes in the end. The last two I went in, smelled. Like blokes. In a changing room. After a game.
6. Price. Who pays £13.99 for an album? That’s right. No-one. If you genuinely can’t sell them cheaper, stop selling them.
7. The death of analogue media. Obviously.
Easier said than done? Probably. Impossible? No.
What would I have done differently?
1. Identify the top 20 most profitable stores.
2. Close the rest. All of them.
3. Re-brand. Slicker, more simple, nicer.
4. Hire experts, enthusiasts.
5. Get them talking to customers.
6. Sold off all stock in store for more than 12 months. Maybe even six.
7. Negotiated some exclusive rights. Example: Beats by Dre. Give customers a reason to go to HMV. And only HMV.
Finally, made sure we stood for something.
Heritage and nostalgia mean nothing. Watch out WHSmith.
Opinionation 