HMV - School Project

Introduction• Objective of Report & Background Information of HMV• Existing Sales Platforms• Rationales & Justification Behind Multi-Channel Retailing• Current & Changing Retail Environment

SWOT Analysis• Strengths, Weaknesses, Opportunities, Threats

Multi-Channel Retailing• Unique Benefits of Each Sales Channel• Synergy Created• Issues of Multi-Channel Retailing

Retail Mix Strategy• Target Market, Retail Mix• Survey Results• Conclusion & Recommendations

Content Page

Objective of ReportTo study and analyse HMV, a multi-channel retailer, its target market and retail mix, in relation to the retail scene in the lifestyle industry, current market trends and influences, and the growth of the worldwide trend of e-tailing to support traditional brick and mortar businesses, and to find out the opportunities and threats facing HMV.

Introduction to HMV• International Retail Chain from the UK• Sells Lifestyle Products like Books, Music,

Videos and Games• Found in London, England on 20 July 1921• Headquartered in Maidenhead, Berkshire

in the UK• Today, HMV is a well-known trademark in

the world with operations worldwide• In Singapore, HMV also offers movie

merchandise like T-shirts, and soft toys to differentiate itself from others in the music industry

Existing Sales Platforms

• Physical StoresIn Singapore, HMV only has 1 physical outlet, which is located in 313@Somerset, #04-23/24, in the prime shopping district.

• Digital StoresHMV has 3 localized e-tailing websites in the United Kingdom, Hong Kong and Canada. However, the UK website, hmv.com, ships to 148 countries, including Singapore.

Rationales & Justifications behind Multi-Channel Retailing

• Physical Store – Browsing, touch and feel attributes; social interaction

• Online Store – Some products do not require touch and feel attributes e.g. concert tickets

• Attract new market and increase sales

• Reach out to new consumers while satisfying existing consumers better

Current & Changing Retail Environment

• New & Innovative Retail ConceptsE.g. Venue VBOX, Digital Billboards and

Self-Checkout Counter• Increase in Use of Technology• Physical Shops Venture into E-TailingE.g. The Face Shop, Kinokuniya• Increase in Pace of Life• Increase of Shopping Malls• Increase in Purchasing Power of

Singaporeans

VBOXPortable store

in a shipping

container

S.W.O.T. AnalysisSpecialized Marketing Expertise

One-Step Solution for Multimedia Lovers

Innovative Products

Badges Autographed by Celebs With the Sale of CDs

Good Location

Prime Shopping District means High Human Traffic

Consumer-oriented Processes

Preview of CDs and Movies in Physical Outlets

Partnership Partnered up with Cinema Operator, Curzon, to offer a Differentiated Cinematic Experience

S.W.O.T. Analysis

Lack of Marketing

Marketing Efforts Only Evident Through Online Mediums and Word-of-Mouth

Limited Locations

Located Exclusively in Prime Shopping Districts

S.W.O.T. AnalysisVenture into New Market Segments

Mainly Focused on Music and Movie MarketsNot Enough Game and Book Specialities

More Advertising to Create Brand Awareness

Stiff Competition in the Industry

Advertising Makes Consumers Take Note of Brand Name

Increase Number of Sales Channels

Only 1 Physical Outlet in Somerset, Making it Inconvenient for ConsumersSet up More Localised E-Tailing Websites so that Products Reach Consumer s Faster

S.W.O.T. AnalysisPrice Wars That CD Shop Offers Bundled CD

Promotions like 3 CDs for $49.90Innovation from Competitors

New Disc Village – Listening Jacks with High Audio QualityCD Hut Sells Remastered CDs

Pirated Music

Illegal Digital Downloads from the Internet

Online Retailers

Trend to Buy Music from Online Retailers like iTunes, AmazonWould Not Think of HMV First When Purchasing Music Online

Unique Benefits of Each Channel

• Physical stores• E-tailing• E-mailing• Call centre• Smartphone applications

Synergy Created from Multi-Channel Retailing

• Check consumer’s satisfaction levels through online surveys

• Overcome limitations that physical channel alone cannot offer

Issues of Multi-Channel Retailing

Maintain Brand Image across Channels

Constantly keep websites up-to-date with the newest product offerings

Merchandise Assortment Offered in Each Channel

Online channel offers wider variety of products than its physical counterpart

Pricing across Channels

Some products on its e-tailing website cost cheaper due to competition from online retailers

Centralized Customer Database

Difficulty in keeping up with the widening consumer database

Target Customers

• Market segmentation• Psychographic/Behavioral/Age• Aged 13 and above• Deep assortment of products• Caters to trend-conscious with

other merchandise• Gaming/Book markets

Retail MixMerchandise• Breadth and depth• Specialty store focusing on lifestyle format

(music/movies)• Mall-based retailer• Up-to-date websiteMerchandising Pricing• Priced lower• No price reductions on new stocks (weekly)• Product bundling on old stocks• Increase profits• Lower inventory risk

Advertising & Promotions• No mainstream media• Sales promotions online• In-store advertising – window displays; off-

shelf promotionsStore Design• Visual merchandising• Gondola shelves • Floor-to-ceiling wall-mounted shelves• Display shelves below cashier• Posters on window displays• Rectangular layout• Locate products easily

Retail Mix

Customer Service• Limited, non-initiativeStore LocationSingapore• Contemporary place that sells on-trend

shopping products• Locals’ and tourists’ favourite districtOther Countries• United Kingdom, Ireland, Australia, USA,

Canada, Hong Kong, Japan and India• Increase international brand recognition

Retail Mix

Survey Results• 82% know of HMV• 52% brought from HMV before48% bought digital music• 44% source Internet for music• 68% prefer hit track over whole

album• 78% want HMV to have more

outlets• 36% rated HMV 3 out of 10

Conclusion• Successful in creating brand

awareness• Retain customer loyalty• Threat from illegal digital market• Offer more differentiated

innovations• More aggressive marketing

campaigns locally• More stores in Singapore

Recommendations• More advertising/promotion

activities to create brand awareness• Open more outlets (physical/online)• Improve book/gaming merchandise• Invest more money into online

channel• Same assortment across both

channels• Revise pricing strategy against

competitors’• Save falling sales in physical stores