The Vault

The path of e-commerce has not trodden equally on all types of physical retail. Some forms of retail such as grocery shopping have escaped relatively lightly, whereas information goods like music, highly susceptible to digital substitution, have suffered particularly, with ~70% of sales now moving to digital downloads or steaming subscriptions. This has a knock-on obsolescence impact to other products which rely on them. Just as cassette players have disappeared from mainstream stereos, CD players are now dwindling, in turn putting more people off buying CDs. And so, the vicious spiral continues downwards, making it easy to bet against the future of the record shop. However, bucking this trend is news that the resurrected HMV is to open the largest such store in Europe this week. Situated over ground floor and basement levels in Birmingham, the new owner’s proposition ‘HMV Vault’ is to focus on community, service provision and live entertainment in store. E-commerce relocated an element of the value chain from an expensive location (the shop) to a less expensive one (the shed) and changed the customer proposition to one focused around convenience and choice. HMV Vault has similarly rebased the real estate costs (in this case way from the Oxford Circus flagship), and also changed the consumer proposition to one which focuses more on being a lifestyle destination, and less reliant on passing trade. By responding to the changing customer need, they may yet breathe life into the format.