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UK entertainment retailers urged to shift their thinking

The UK physical entertainment market declined by 21% in 2019, according to market intelligence group GlobalData, which is calling on a major shift in thinking from traditional retailers operating in the sector.

GlobalData said spend continues to move away from retail and towards streaming services, threatening the future of specialist chains. It added these retailers must manage what is “a terminal decline” in some product categories, and take wins where possible while shifting their focus to more sustainable markets.

Zoe Mills, retail analyst at GlobalData, said more sustainable markets may include electricals, homeware, or licensed goods topical to their specialism.

“More streaming subscriptions are available, and consumers are facing a difficult decision regarding which services to invest in and for retailers, understanding where there is still demand for retail goods and how these developments in streaming services can be utilised is essential to combat declining sales,” she noted.

Mills added that traditional retailers can adopt various tactics amid the rise in popularity of Amazon Prime and its related streaming services, as well as developments by Disney and Apple to develop streaming divisions, and the ongoing influence of Netflix.

“For retailers without their own streaming service, such as HMV and independent specialists, being reactive to which content is not available could aid sales,” Mills commented.

“For example, Disney has removed most of its content from Netflix and Amazon Prime Video in anticipation for the launch of Disney+ later this year. As a result, retailers should focus on Disney titles, promoting the keepsake nature of these items, and enabling shoppers to watch content that they may otherwise not have access to via subscription services.”

In 2019, the music category was the weakest performing in the physical entertainment sector, according to GlobalData, with spend falling by 18.6% on 2018. Mills noted that fewer cars are being manufactured with CD players, and she suggested the recent revival of vinyl is likely to slow down.

“Over the next few years, retailers must manage the decline, shifting their focus to other areas of the retail market," Mills said. 

“For example, reducing space in-store allocated to music, and allocating it to other sectors which have a more stable demand or on more trend-led items such as homewares or licensed goods topical to their specialism.”

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