Major record labels, including Universal Music, Warner Music and Sony, have agreed to reduce the prices of CDs and DVDs, in a strategic attempt to rescue HMV.
The high street retailer has looked vulnerable for some time, particularly since announcing a 10.2% decline in sales at the end of last year.
This decline in sales is representative of a shift occurring in how the public consumes media. With the rise of tablets, smartphones and live streaming, is the end nigh for CDs and DVDs?
We suspect yes, but what remains puzzling is why HMV executives were so slow to respond to a changing consumer trend that the average person on the street has seen coming for some time.
The lesson that all businesses, let along SMEs, can learn from HMV is that you have to keep monitoring your customer’s purchasing habits and be alive to changing behaviour and needs.
Having identified a change is occurring, it is crucial that you alter your offering to respond to these changing needs and demands. HMV executives seem to have been content relying on the strength of their brand, rather than the relevance of their offering.
It is difficult to predict whether HMV will recover long-term or whether this late rally from the labels merely provides a brief reprieve from the inevitable.
Either way, the demises of HMV, Jessops, Blockbuster and more are not just down to a difficult economy, all represent text book examples of businesses failing to respond to changing consumer behaviour and demands.
Make sure your business is alive to these types of changes in your sector!