Digital Killed the Retail Star – Or Did It?

16 January 2014
Dharmendra Patel
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HMV Store Closing

Whether you know it or not, the pop song “Video Killed the Radio Star” by UK one-hit wonders the Buggles, is etched into your brain. Even if you weren’t around in 1979, when this song topped the British pop charts, you’ve probably heard later versions by Erasure, Superbus or Presidents of the U.S.A.
 
After this song became the first music video played in 1981 on MTV in the US, the Buggles started selling loads of records there -- a bit of a miracle, since the band was unheard of and the song had no airplay on American radio.

On both sides of the pond, the message was clear: music television was a new and better way to experience music, and a powerful sales channel. Thirty-three years later, BBC 1 and American pop radio are mere shadows of the cultural and commercial forces they used to be.

Retail stars: A stellar customer experience

Today, a lot of people are saying the same thing about the digital channel: “Digital has killed retail.” They point to music retailer HMV, in the news

for calling in the administrators. Critics say that HMV never figured out how to shift its business model from selling vinyl records and CDs to the digital music forms that people now prefer.

But digital isn’t the only thing that killed HMV, a former retail star. It’s true that consumers’ preferences for buying music have changed. But HMV failed to provide what every successful retailer absolutely must -- a stellar customer experience.

Nearly 100 years ago, HMV created a unique customer experience with listening booths kitted out with gramophones, perhaps defining the idea of “interactive retail.” However, in the last 15 years, HMV became like every other high street music store. Its in-store experience didn’t evolve and the HMV brand suffered. Consumers felt out of touch with the music retailer, avoiding its stores in droves.

Every retailer must become a digital business

Clearly, every high street retailer must adapt to the digital age. To many, this means adopting digital marketing, using email campaigns and social media to drive traffic to their online and physical stores. But retailers need to do more. They must become digital businesses, understanding that the customer experience is woven through every interaction with the brand. These interactions are increasingly digital, spanning in-store retail, online shopping, fault reporting, order status checking and more. Digital change needs to be endemic and systemic.

Is it digital or is it retail?

Apple is a company that’s managed to do retail right, delivering a customer experience that topped the high street customer satisfaction league table released last year by consumer campaigners Which?. Over 11,000 consumers responded, with Apple receiving an overall satisfaction score of 85 percent. Yet, with Apple ringing up $10 billion USD in its App Store in 2013, it’s one of the brightest stars in the digital universe, too.