Monday, March 28, 2011

The wrong cut

So HMV looks increasingly likely to sell Waterstones.

They would be selling the only part of the business with a potential long term future. There may (or may not) be a future in retailing books, but there surely is not one in retailing CDs and DVDs. As planned purchasing migrates online (where its easier, cheaper and there's a bigger range in stock), then the remaining opportunity is for impulse purchases. I still buy books, for example, in railway stations and airports. But books have built-in functionality that HMV's products do not. There's an HMV at the airport, but what is the point of buying a CD when I've no way, while in transit, to get it onto my iPod; or a DVD, when my netbook doesn't have a DVD drive. Far easier to simply download something (and cheaper, too).

We may eventually do most of our reading on Kindles (who knows), but even if we do, we'll still be able to pick up a book out of convenience. No such future awaits the CD. It may make sense, in the short term, to sell Waterstones - given Waterstones poor performance and HMV's losses. But you wouldn't want to be left with a stake in HMV.

Wednesday, March 09, 2011

Some people can't relate and others have a lot to learn

When I worked for Britvic, the Tango brand director (who I have to thank for hiring me in to my first real job), bought all the tabloid papers each day, in an effort to know what the brand's consumers were seeing, reading and talking about. For a while in the 90s I attempted similar discipline to the internet - visiting the "big" sites that would otherwise be out of my repertoire, as an act of professional diligence. Futile, obviously. (When vinyl records were invented my grandfather decided to amass a complete set of all the 78s published - he had to abandon that plan quite quickly too).

It is no longer possible to attempt to see through others' eyes. The biggest websites each deliver a combination of search and social, so we all see them differently. (The top 10 by hits are Google, Facebook, Youtube, Yahoo, Live, Blogspot, Baidu, Wikipedia, Twitter and QQ. You are forgiven for not knowing Baidu or QQ if you don't speak Chinese). Content led sites don't feature very highly - and I suspect our choices, at that level, are as fragmented as ever (the BBC is #41, livejasmin is #44 - take your pick).

This is part of a general trend of cultural and social fragmentation. I sat today on the tube next to a guy little more than half my age, as we both listened to our mp3s. I take a little pride in my music taste, but I suspect my age is beginning to show. Mine may be the most ear-bleeding trendy guitar based music in town but, as Decca observed with much foresight when they turned down the Beatles in 1962, "guitar groups are on the way out". My neighbour was listening to Tinie Tempah, for all I know.

Aside from being an obvious problem for media planning, this is a seismic issue for brands that have made themselves "relevant" to consumers by simply mimicking the consumer's perceived interests: "You like XXXXX, so do we!" If consumers aren't into the same things, just what should a mass market brand align to? The few big unifying consumer interests (such as major sports) are not very differentiating. And in many spheres there's little to unify consumers at all. (As far as I understand, the unifying theme of fashion these last few months has been nothing more complex than "socks".)

Affinity marketing was always lazy - the "in thing" is surely an overpriced way to reach the audience. Winning brands have the confidence to carve their own groove. The trick is doing so in ways that consumers are drawn towards.