Sales on CD’s and DVD’s have been declining for some time now with the increased appetite for on demand, internet streamed content.
But HMV have been clawing back some of their market share. Bought by Hilco in early 2013 for £50m, the chain went into administration, but has managed to turn its fortunes around since the buy-out.
For the first time since September 2013, HMV’s music sales have beaten Amazon’s, in a surprising come-back for high street retail.
Analysts have attributed the resurgence in physical sales to the ability for shoppers to browse and pick up, look at and walk around the products. With music playing in the background and everything sorted alphabetically, it can be quite a pleasant experience shopping in a music store. For those bored of the more functional experience on Amazon or other online retailers, HMV offers a back to basics option.
HMV has seen their music products surge by almost 50% in the last year, giving them almost 45% of the physical music sales business in the UK.
From an overall entertainment perspective, HMV has still not overcome the online giant, Amazon, who hold 23% of the overall market, with HMV holding in second place with 17%, and Tesco in third with 15%. Amazon increased their market share last year, at the expense of Tesco.
Much of the online retail market share comes from two USP’s. The ability to stay at home whilst you shop (convenience) and the ability to see almost every option out there (selection). To combat these powerful differences, HMV must continue to create a music/entertainment experience in their shops, rather than just a transactional one. If they can keep achieving this, it seems likely they will retain many of their customers, and perhaps gain a few more who would like a more personal, interactive and tangible shop experience.