HMV picks new CRM system

HMV’s new rewards scheme, PureHMV, is using a customer relationship manager (CRM) system from EHS Brann Discovery.

PureHMV allows customers to collect points for transactions, then trade them in for ‘money can’t buy items or experiences such as autographed guitars or concert tickets.

EHS Brann Discovery is supporting the launch of the unique scheme, which has now gone nationwide after a six month trial across 33 stores in East Anglia and the West Midlands. The agency’s approach will utilise reward scheme data from multiple sources including HMV’s point-of-sale systems and in-store and website sign-ups, all of which will feed hourly into the CRM system.

The system will analyse sales data by customer types and spending behaviour to allow for better targeted and more relevant communications on promotions and offers. This aims to make the customer’s journey more personal, relevant and valuable and HMV’s marketing more efficient, profitable and insightful.

“The implementation of a CRM system will enable HMV to maximise the value it derives from PureHMV, and provides the tools to ensure that its approach to customer loyalty remains current and credible. Investment in customer loyalty generates a vast quantity of customer insight, and by carefully analysing this data and applying it to the interactions it has with its customers, HMV can continue to enjoy profitably and long term relationships,” says EHS Brann Discovery managing director Richard Greenhalgh.

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Orange shop-in-shop heading for HMV stores.

Orange and HMV are teaming up to promote Orange products and services via store-in-store units in HMV stores.

Dedicated Orange ‘show and sell’ spaces will be situated in the entertainment retailer’s stores, with a focus on music, games and video mobile handsets and services.

The deal will extend Orange UK’s retail presence and contribute to taking the brand past the 400 high street stores landmark. It also underlines HMV’s growing interest in the mobile and digital marketplace as it continues to diversify its product mix and develop as a multi-channel brand.

A first wave of up to 15 concession stores will be rolled out from June 2009, with the HMV stores in Glasgow, Plymouth and Teesside earmarked as the first to incorporate an Orange offer. Up to 100 locations have been earmarked to take the store-in-store approach by Christmas.

“This deal marks the coming together of two of Britain’s biggest and most iconic high street brands,” Orange UK chief executive Tom Alexander. “Moving beyond mobile and into media and entertainment is a key part of our future, and joining forces with such an iconic and well-loved brand as HMV allows us to mark our clear intention in this area, while expanding our presence on the high street.

“HMV has been diversifying and extending its customer offer, which is increasingly becoming a multi-channel one with a growing emphasis on technology and new media,” says HMV chief executive Simon Fox. “I am delighted to welcome Orange into our stores – our brands reflect a shared passion for bringing entertainment content to life, and complement each other well.”

GTA and Wii Fit boost HMV

HMV today reported a 25% surge in annual profits as it gained market share, helped by the popularity of new games like Grand Theft Auto IV and Wii Fit.

Runaway demand for console games has helped the CD, DVD and game retailer, which also includes the Waterstone’s book chain, dodge the gloom seen on other parts of the high street.

“We had a terrific year for games last year, with growth of about 60%,” said Simon Fox, HMV’s chief executive. “In the year in, we’re ahead of where we planned to be. We’re riding the game growth curve, and we’re riding ahead of the curve.”

Like-for-like sales grew by 11.4% at HMV in the UK and Ireland while Waterstone’s sales were up 3.3% in the year to April 26. Since then, growth has remained strong thanks to new releases like GTA IV and Wii Fit, Nintendo’s exercise game for the Wii console. “A very hot product when you can get hold of it,” Fox said. Nintendo “are doing their best to keep up” with demand.

HMV, one year into a three-year turnaround plan, said profits before tax and exceptionals rose to £56.6m last year from £45.2m. It already predicted in May that profits would be at the top end of market expectations.

Its share of the UK games market, which increased by one percentage point to 8% by year-end, continues to grow. Its share of the music market has risen more sharply to 29% helped by the demise of rivals such as Fopp while its share of DVDs has increased to around 25%. But share gains will not continue at the same rate as HMV is up against “fierce competition” from supermarkets, particularly in DVDs and books, Fox said.

HMV has introduced a new range of technology products, dominated by digital music and video players. Games and technology now make up 21% of sales, compared with 14% a year ago. It is converting up to 15 stores to the “next generation” format featuring a social hub with access to entertainment websites, multiplayer games areas and kiosks. All new stores will open in the new format.

As the CD market continues to decline – CDs now make up less than 30% of HMV’s sales – it is seeking to replace them with new band merchandise such as T-shirts, caps and backpacks.

The retailer is looking forward to a “fantastic” Christmas for music, Fox said, with a strong lineup of new releases from Razorlight and Morrissey to Oasis and the Kaiser Chiefs.

The chairman, Carl Symon, who was appointed in February 2006, is stepping down at the company’s annual meeting on September 5. Fox insisted the relationship had been “constructive and positive” adding that when Symon was appointed “he felt he had a specific job to do in terms of changing the leadership and feels now is a good time to move on”.

Shares in HMV dropped 6.25p to 123.25p in early trading, a fall of nearly 5%. This erased the gains made yesterday, when HMV jumped 6.25p as traders anticipated a strong set of results.

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