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The Nostalgia Effect: Is our love for HMV delaying its inevitable fate?

Everyone remembers buying their first record/cassette/CD (delete as appropriate according to age), most probably from a HMV store on your local high street. But times have changed. A rise of online streaming services and downloads have all but made CDs and DVDs obsolete, and HMV has been teetering on the brink of the same fate as many high-street favourites before it: Woolworth’s, Borders, Blockbusters… the list goes on. However, whilst we regretfully waved these stores off into the abyss of administration, no-one – consumers, music moguls, investors – seems quite ready to let go of HMV just yet. Could this be down to the nostalgia effect? Are baby boomers and millennials saying “enough”, and that they’re overwhelmed by the ‘new’, and are yearning for simpler times. Could it be this very emotion that leads to HMVs resurrection, or is it too-little-too-late for the iconic retailer?

Following two administrations in the past six years, HMV’s demise looked inevitable until Canadian music mogul, “Vinyl King” Doug Putman offered it a lifeline and bought the stricken chain for £883,000 after it collapsed in February, optimistically intent on bringing it back to life. Following HMV’s demise in Canada two years ago, he bought 70 locations reopening under the guise of his own record label ‘Sunrise Records’ which notably, now turns a profit. If anyone can breathe life back into HMV, Putman can.

Part of his strategy to revitalise the brand includes recently unveiled plans for ‘HMV Vault’, an enormous 40,600 sq ft entertainment hub in Birmingham on the site previously home to Ikea. Cited as ‘Europe’s largest entertainment store’, Vault will be a dedicated vinyl paradise; a store housing tens of thousands of titles, with particular appeal to specialist record collectors. In addition, there will be regular live gigs and a platform for up-and-coming artists. Whilst there is clearly an opportunity to tap into the growing trend for nostalgia – take Urban Outfitters as an example - a strategy focused on filling some sort of cultural hole as our entertainment consumption moves online is questionable.

With brick-and-mortar stores shutting up shop up and down the country, a move to open a store of this scale is risky. However, Putman insists there is a method to his ‘madness’: The store will also double up as a fulfilment centre for online orders, which at present, do not amount to much of the chain’s total sales, especially when physical media only makes up 17% of all music purchased. The aim is to change that. This move seems to suggest an overdue realisation that a change in model is required, bridging both on and offline.

Whilst it is easy to make an example of HMV – they’re not alone. Many legacy businesses shunned the importance of digital transformation until it was inevitably too late, which is why we are seeing a rapid rise in the number of high-street casualties in recent years. The retail industry is a brutal, unforgiving place and valuable lessons are unfortunately, being learned the hard way.

If HMV / Vault wants a chance at being successful again, it needs to find a new model for their remaining stores – including its new flashy flagship, that is ultimately valuable; customer experience will be crucial. These stores need to be entertainment destinations in themselves, and holistically integrated into digital channels so that one is an extension of the other.

They’re essentially targeting two differing markets: The reminiscent older generation and a younger audience shunning streaming services. The challenge is there: HMV / Vault needs to feel young, fresh and nostalgic all in one go, bringing its customers closer to the thing they love – music and entertainment. Being experientially led is the clear path to an alternative future for HMV.

Above everything, Putman needs to ensure the model is operationally efficient and agile enough to transform with the times. Sales of DVDs, CDs and video games plunged by almost a fifth in the three months to the end of June, with August looking to be down 24%, the lowest sales figures in 20 years. Growth in the entertainment market is undoubtedly driven by digital services like Spotify, Netflix, Apple and, and if HMV are to stay in the race, they need to find a way to navigate the ever-evolving retail ecosystem, and changing consumer habits and put this at their core.

It will likely be trial and error for HMV as it seeks to find its place in a post-digital era. Whether or not it can a) afford to and b) keep up is the question. Will HMV be the last one standing and prove all the sceptics wrong? The teenager in me, browsing Top 10 hits on a Saturday afternoon wants to believe that it can work, but the slightly older, wiser version is dubious.

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