HMV and Its Target Market Segment
E-commerce is a major contributor to the world’s economy. By the year 2010, e-commerce may represent 25% of the world’s GNP. As a result, many companies will be competing for customers in this arena. The top e-commerce companies in the industry utilize similar successful strategies in order to gain a competitive advantage in this highly contentious and rapidly evolving environment. These strategies include: innovative warehousing, employment of new technology, dynamic pricing, low pricing, formation of alliances, customized and personalized service, and acquisition of the best and most innovative talent.
UK Music Retail Business
Records are sold both through shops which specialize in music and shops which sell a much wider range of products. The specialists include chains, such as HMV, Virgin, and many small independent retailers. The non-specialists include multiples such as WH Smith and Woolworths, as well as an increasing number of "non-traditional" outlets such as supermarkets and gas stations. In addition, mail order and record clubs account for some 12 per cent of the market in the UK (Janson & Mansell 1998).
HMV is the UK’s leading specialist retailer of Music, DVD/Video, Computer Games and Related Products. The company operates around 200 stores in key shopping locations nationwide, equating to over 1million sq. ft. of trading space, as well as an online store at www.hmv.co.uk. HMV is dedicated to offering its customers authoritative access to the widest possible range of recorded music titles, DVDs and computer games across all formats. At 50,000 square feet, HMV 150 Oxford Street is the company’s flagship store and is the largest music and home entertainment store in the country, offering a choice of over 150,000 music titles on CD and vinyl as well as a comprehensive selection of DVD and game titles.
Market Segments HMV is Targeting
Many researches have segmented Internet shoppers based on their Web usage-related lifestyle, themes of the Internet usage, Internet attitude, and psychographic and demographic characteristics. They have identified four online shopping segments (tentative shoppers, suspicious learners, shopping lovers, and business users) and four online non-shopping segments.
Virgins’s online service is a B2C (Business to Consumer) e-commerce initiative that allows customers to purchase Music, DVD/Video, Computer Games, and related products and services. It has also added download and live stream options to its online store.
As music floods the Internet, both brick and mortar and click and mortar retailers are setting up electronic storefronts, but like every structure, these stores need solid foundations. One of the most important components of these foundations is the customers. Seybold (1999) considers the first and most important e-commerce rule to be to "target the right customer." What constitutes the "right customer" will vary for different companies operating in different sectors, but some general principles can be established. First, some companies make the mistake of omitting some important types of site visitor. For a website to be effective, it should cater to all the different types of audiences.