HMV & The Law of Adaption

It was just two weeks ago that I tried to stray from my normal online purchasing habits and go buy a book at one of the few remaining Barnes & Nobles in Manhattan. I arrived only to be told, "We don't have that in stock but we can order it for you for $20 or you can go online and buy it for $12" . . . guess which option I chose? 

HMV store closing in Ireland

Now, I hear that British entertainment retailer HMV is shutting its doors. I have to wonder . . . is anyone actually surprised? The closure of HMV closely resembles the way many people felt about Warehouse Music Stores going bankrupt in 2003, or Tower Records filing for bankruptcy in 2006, or the closure of Borders, Inc. in 2011. As sad as it is to see a favorite local retailer go, I can't help but notice that this story sounds like a broken record.  No pun intended.

Sure the launch of iTunes store in 2003 changed the way people buy music today but these market trends go back even further to the 90's and the days of Napster and MP3.com.  If you think about the amount of time for which trends have been shifting towards the online purchasing of digital media, HMV must have been a pretty strong business to even make it to 2013. 

Recognizing and Adapting to consumer trends . . . 

Tower Records closing in NYC

I agree with the author of "3 Things HMV's Untimely End Taught Us About Digital Marketing Strategy" that HMV failed to keep their eyes open, change their strategy and adjust their plans based off the clear trends in consumer behavior.  In order to reach their customers and potential customers, businesses must stay up to date on the the type of media being consumed and the way in which people are consuming media.  

In an era where Facebook is being used by over a billion people a month (680 million on mobile), social media and digital marketing opportunities can't be ignored.  Especially in an industry where the best customers are the types that want to stay up to date about the latest Top Hits and are constantly listening to music whether it be on-the-go on their mobile devices or through other relatively new services like SiriusXM, Pandora or Virgin Mobile Live.

However, in cases like HMV, the idea of adapting to consumer media trends goes far beyond just their digital marketing and advertising strategy.  While adapting a digital marketing strategy to the times and recent technology is important in order to communicate to consumers, the idea of adaption applies to all aspects of a business. A company like HMV must also adapt it's services, sales channels and product portfolio to account for changes in consumer behavior.  If HMV would have considered a strategy more along the lines of  "selling entertainment" and less along the lines of "selling CD's in a store", perhaps they would have lived to see 2015.  As long as HMV refused to move beyond it's long-standing brick and mortar business model, even the best Twitter and Facebook campaigns (which we must remember are aimed at heavy internet users) would not have saved it.   

Use Social Media but don't Blame it . . . 

While failure to adapt is a common reason for businesses to struggle and eventually go out of business, a bad incident on social media is not. The idea that HMV's Twitter account getting spammed by recently laid off employees "destroyed this company" is a bit shortsighted.

While social media can influence the perceptions and character of a business, social media trends are generally a reflection of what's already going on with the business, not the influencing factor that determines the next direction for the business.  

Instances of bitter former employees taking to the internet to voice their frustration are not rare.  While layoffs are never a happy occasion and can take a toll on both parties involved, the scenario is common enough that most semi-educated consumers can see that big picture and the biases of the ex-employees involved in social media feuds.  After all, they still chose to work there until forced to leave.  The HMV social media incident is more a reflection of HMV management not having a tight enough rein on their social media than an influence on the company's future. By the time this incident occurred, their fate had already been decided.