Failure to adapt meant competitors left HMV behind, analyses YouGov CEO Stephan Shakespeare
Almost exactly a year ago we looked at HMV on YouGov’s BrandIndex and saw that it did not fit the traditional pattern of a retailer facing difficulties – struggling with consumer perception compounded by a poor economic situation.
HMV was by no means a high scorer on BrandIndex but it was in a perfectly respectable place and despite two step declines on the index score (a composite of six key image attributes) in the past two years, it remained at +13 this week.
HMV’s problem was not its absolute position but its comparative one; although it fares okay as a brand it is a very long way behind Amazon and well down on Apple – on Monday the three Index scores were HMV +13, Apple + 26 and Amazon +48 (off the back of tax avoidance allegations Amazon is down from highs of +60 but remains one of the strongest performing brands on BrandIndex).
Focusing in on perhaps the most important attribute on this market, value, we see that the chasm is even more marked – Amazon has a BrandIndex Value score of +51, HMV is +6. Again, there are many brands worse than HMV and plenty in negative territory, but that is not the point. If you are in the business of selling CDs (or any commoditised product) you can’t trail a rival by 45 points on value and hope to thrive.
Last year I said that a clear lesson for high street retailers is that being the best on the high street is no longer enough. In order to survive retailers need to find a way of competing (particularly on value) with their online rivals as well. HMV has failed to do that and paid the price. It is not the economy that has done in HMV, but the changing retail world and its failure to adapt.