HMV is kick-starting its critical digital strategy this week with the launch of an MP3 download store and innovative app.
The entertainment retailer, which has been without an ecommerce operation since its collapse in January and subsequent acquisition by Hilco, aims to target existing shoppers as well as a younger customer base.
The digital strategy – critically important in HMV’s fight against giant rivals Amazon and iTunes – was triggered today with the launch of an app across iPhone and Android, and will be followed next week by the relaunch of the ecommerce site HMV.com. The retailer will also launch HMV Recommends next year.
HMV Digital managing director James Coughlan told Retail Week: “We want people to recognise HMV as a digital destination.”
The app has an innovative feature, HMV image search, that uses image recognition technology. Shoppers can take a picture of a physical product, such as an album sleeve, which takes them through to that product in the digital store. “No one else is doing physical product recognition in association with digital downloads,” said Coughlan.
It also has a Sound Search feature which recognises music in the locality and tells the user the name of the song, much like existing app Shazam, but the HMV app takes the user through to its digital store to download the song.
Coughlan said: “We want to bring back the experience of discovery. The old listening post experience. We’re focused on collectors, we’re putting ownership back on the map.”
He added HMV is “focused on taking HMV right back to the beginning, to what a record shop actually stands for” through its digital offer.
Coughlan said he was confident that HMV’s digital offer can compete with established giants in the sector. “I don’t think we’re trying to say we’re knocking Amazon and iTunes out of the water,” he said. “It’s about putting HMV back into the mix. We’re bringing a unique way to experience the digital world.”
HMV’s online sales accounted for less than £150m out of £1bn total revenue in its last financial year before collapsing, according to estimates from Retail Week Knowledge Bank.
While Coughlan acknowledged that some HMV customers “will be embracing digital for the first time” when using the retailer’s services, he added: “Digital doesn’t have to be daunting. Digital can be a considerable percentage of the business.”
The apps will initially only cover music products but Coughlan said next year they would be rolled out to film and TV and video games.
As well as “educating” existing shoppers, Coughlan said he wants to attract a new, younger customer base with HMV’s leading-edge digital offer. “There’s a younger audience who’ve never been in an HMV,” he said. “We want to drive footfall into stores.”
Coughlan said HMV would install regional ‘digital ambassadors’ in every region to “seed through everything we’re doing so store staff buy into it”.
He added: “This isn’t the start an end of the digital offer, this is phase one. I’ve got a very big vision and I want to see it play out. The roadmap for 2014 is looking very exciting.”
Coughlan said the second phase of the digital strategy will include recommendations that will capitalise on HMV’s reputation as a “trusted voice” in entertainment. Coughlan said the retailer will be utilising data from loyalty scheme purehmv to provide recommendations.
He said HMV would not be launching a subscription-based music streaming service like its sister business HMV Canada, which operates The Vault, because it does not push its desired ‘music ownership’ model.
“Streaming is a great tool for discovery and we’re open to a discussions on how that can aid ownership. But sticking our logo on something like Spotify is not what it’s about,” he said.
He added that The Vault in Canada is “under review”.
Coughlan declined to say what level of investment owners Hilco have made in the digital offer but said: “I’ve got the full support of Hilco. It is making considerable investment in digital.”