So I see on the news today that the former giant music retail store HMV is looking like it's going to run aground on the shores of economic downturn - 4,000 people potentially out of a job. This comes not long after the electrical retailer Comet called in the receivers. More doom and gloom for the high street.
Now although this is a terrible thing for those that worked there (and I deliberately am going to avoid any further comment on that, this is just about the business stuff!), is this bad for the economy and business in general?
I'd argue it's not - these are both examples of business models built for an economy and marketplace that has changed in an unprecedented way over the last decade. In 2000, when we first moved to Wiltshire with my new job, we bought a dishwasher. I did my usual background research, found an appropriate model, and my wife and I drove 20 miles to Swindon to buy it. We went to Comet, Currys etc (UK electrical retail stores like Home Depot), eventually found the model we wanted (after a lot of trawling around and talking to teenagers who knew nothing about dishwashers) and bought it. The following week it was delivered to our house and installed. I relished the experience about as much as the prospect of root canal surgery.
In 2012 we did the same thing when we moved out of that house, except this time I did everything online. It took about an hour, I got a great price and it was delivered in a few days without mishap. The same goes for my Christmas shopping - I bought some Argan oil for my wife which arrived from Israel with some free moisturiser for less than half it would have cost (including postage) if I'd driven to the local Boots and taken it off the shelf. Branded goods from all over the country arrived in well-packaged boxes only days - or in some cases only hours - after being ordered with a few clicks. I didn't have to endure traffic, bad drivers, pushy shoppers or rude staff, which preserved my Christmas spirit for when I did venture out from my cosy sofa.
The simple fact is that retail has changed - and Comet and HMV didn't change enough, nor fast enough, to justify their own existence. I watched the news with some disbelief as an enormous HMV store was shown, the announcer talking about the rise of online and the change of shopping habits. Now I'm sure anyone reading this isn't surprised by this - it's been happening for a long time now - but the management at HMV still retained their huge stores and staff. Why didn't they downsize and adapt, having download centres in their stores and moving away from a 20th century model of the music store as a social enterprise? It's not liek they didn't have consultants in to tell them that they should do this - they apparently just ignored the advise and evidence that was there all along.
Hopefully this will be another tolling bell to those in similar businesses to adapt and change to the here-and-now rather than cling to their existing model like the captain of the Titanic. In an economic recession, it tends to be specialist retailers that do well - trying to cater to everyone's needs is usually a recipie for failure when people are looking to find a bargain. I'm guilty of this too - back in 2007 I'd hapilly buy from a single retailer, not worrying about individual costs, as money wasn't so much of a concern. Now I'm much more aware of cost, although our disposable income hasn't really changed that much over this period.
In my mind, it's clear that businesses that ignore change, and fail to change with their marketplace are always going to have problems, whatever size you are - no-one can hide just because they're big. HMV seems to be another example of this, and the real question is what will come in it's place - more online purchases through iTunes, spotify and the like, more specialised retailers or something we haven't guessed at yet? I imagine that whatever it is, it won't look the same in another ten or so years!
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