HMV, Brands and Technology: The Importance of Business Strategy

For more than nine decades, HMV has been one of the most prized brand names on the British retail scene. Since the opening of its first outlet in 1921, it has attempted to epitomise both a rich musical heritage, and to remain on the cutting edge of the entertainment industry. For many years, it succeeded, expanding particularly during the rock and roll boom of the 1950s and 1960s, and maintaining its dominance throughout the 20th century.

However, despite the widely-recognised logo of ‘Nipper’ the dog listening to his master’s voice, recent years have been more troubling for the High Street giant.
The recent fate of HMV, now in the hands of its administrators, should serve as an object lesson in the ways in which brand identity is only one part of business success. For all of the nostalgia expressed by many of HMV’s customers when the news was announced, the retailer’s financial figures remain grim.


Most analysts are in agreement that HMV failed to move with the zeitgeist, and that it did not act quickly enough in adapting its business model to the reality of music downloads and other new technologies.
This was not always the case.
In the early to mid 1990s, HMV was seen as being a rapid adopter of internet business, becoming one of the first music retailers to conduct transactions through its own website, launched in 1997. This was as far as the organisation went, however, with its strategy failing to recognise the increasing importance of direct downloads over physical media such as CDs and vinyl.

Indeed, HMV can be used as a classic case study of the basic principle that branding only works in relationship with a sound business strategy. Rather than recognising that the market was moving in a direction which challenged traditional retailing methods, HMV chose to ‘double down’ on the high street retail model, with its purchase of other failing chain stores such as Zavvi. Even this could have been leveraged into success, if the high street model had been adapted to suit new market realities.
Instead, HMV seems to have fallen into the trap of an ossified brand, in which traditional trading models are associated with the business itself, and progress is stifled.

HMV itself described its brand values as focusing around customer service, outstanding knowledge, and an unmatched product range. Unfortunately, the high street business model appears to have become associated with these wider values, when in fact the opportunity was open to HMV to achieve a much higher degree of brand functionality.
Rather than sticking to tried and tested methods, new technology could have allowed the retailer to embrace digital downloads, to expand its product range, and to enhance its customer service offer. For example, if HMV wished to remain a high street retailer, it seems very odd that it was so difficult for an ‘off the street’ consumer to walk into an HMV store and directly purchase digital music, to be downloaded to their iPod or smartphone.

Ultimately, it can be seen that the failure of HMV does not indicate that a strong brand is unimportant within business performance. Rather, it indicates that a strong brand must be used in the right way, and within an overall business strategy which recognises prevailing market conditions. Had HMV sought to leverage their brand strength through new technology and brand functionality, they would have stood a much better chance of surviving the recession, and experiencing another nine decades of success on Britain’s high streets.

Richard Rutter


One Comment Add yours

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