The Marketing Profile: Graham Sim of HMV

Graham Sim of HMV
Graham Sim of HMV

It seems appropriate that Graham Sim, marketing director of HMV, looks more like someone who used to be in a band - he has a certain air of former Undertones frontman Feargal Sharkey about him - than a marketer.

As a brand ambassador for the retailer, he is utterly convincing. Speaking softly with a Glaswegian accent, the 46-year-old says: 'I've shopped at HMV since I was 12 years old, and my life is measured out in terms of music. Certain songs remind me of certain places and people, so music can make me feel things that nothing else can.'

It is this emotional reaction to music that Sim wants HMV to tap into. He believes the only way it can compete with the likes of Tesco, which focuses solely on price, is to refuse to let HMV's product offering be reduced to a commodity. 'We don't sell baked beans, we don't sell soap powder and we don't sell mortgages,' he declares. 'What we offer at HMV is amazing, incredible experiences.'

Certainly HMV has fared rather better in recent times than its direct rivals Zavvi and Woolworths, both of which were placed into administration over Christmas; by contrast, HMV posted a 3% increase in like-for-like sales in the UK and Ireland over the festive period. It's a very different story from 2007, when the company faced profit warnings and sliding sales as the download market took off at the expense of CDs.

Sim attributes this success to a simple, but effective, mantra: let content be the hero and make the passion that HMV's customers feel for its music, films and games become indistinguishable from the brand.

One of the key initiatives behind this is aimed at letting its customers 'get closer to the music, films and games they love'. This 'Get closer' initiative forms the backbone of HMV's marketing drive and manifests itself throughout the business, from the 320 in-store personal appearances by artists that take place each year and social-networking site getcloser.com, which allows fans to chat and see previews and behind-the-scenes footage, to its venture into live music and planned loyalty card.

Its most notable element so far is the 'My Inspiration' series of print and online ads, in which musicians, actors and game creators talk about what has inspired their work. HMV has managed to get a staggering number of high-profile names involved, from Sim's hero David Bowie and music legend Bob Dylan to more contemporary figures such as Franz Ferdinand, Danny Boyle and Daniel Craig.

Last week, HMV ran six 'My Inspiration' ads, one for each member of U2, to mark the release of its album No Line on the Horizon. Sim believes that no other brand could have persuaded so many famous performers to get involved. 'It wasn't about money, it tapped into the genuine love they all have for the brand,' he says. 'Many of them would have shopped at HMV when they were younger and bought music, films and games there that inspired them.'

In Christmas 2007, HMV launched its first TV campaign. Since then, it has been running an increasing number of TV ads, to coincide with peak gift-giving periods such as Easter, Valentine's Day and Mother's Day.

The ads, which feature well-known music or film clips, continue to follow a tested formula. They contain no price tags and are not heavily branded, showing the HMV logo only at the end. 'It will always come back to the content, because no one will ever be able to recreate those iconic moments in Casablanca, Ghost or Titanic,' says Sim.

The company is coming to the end of a three-year revitalisation plan and appears to be in better shape than ever. Nonetheless, Sim is conscious of the need to keep up with the constantly changing marketplace as the brand has done so far.

HMV's successful diversification of its offering has enabled it to prosper and ride out a decline in CD sales. In addition, it wants to be seen as a serious force within the games industry and has therefore doubled the in-store space devoted to the genre in the past year as well as launching a game-exchange scheme called RePlay. Sim notes that, with the advent of the Nintendo Wii, the games industry is no longer the preserve of adolescent boys. 'We're seeing more women coming in-store to buy games. The Wii has made game-playing more of an acceptable family pastime,' he adds.

HMV's fastest-growing area is its online offering, which posted a 25% hike in like-for-like sales in the five weeks to 3 January 2009 and attracted 70m UK visitors last year - twice the number visiting the iTunes Store. Awareness of the site is driven by adding its address to all advertising, till receipts and carrier bags, and Sim is looking at increasing HMV's online activity, with either display or affiliate advertising.

Sim is keen to maximise access to both HMV's digital and physical offering. 'With MP3 opening up to offer us a level playing field with Apple, strategically it will be incredibly important how we combine the two,' he says. 'With the download kiosks in our stores, we're putting out online offering in the middle of our physical offering, and if you can't find an album in-store you can go online and order it.'

HMV's expansion into the live music market is another exciting development. It announced in January that it had acquired a 50% stake in the UK's second-biggest live-music venue operator MAMA Group.

The group owns 11 of the UK's best-known live-music venues, including London's G-A-Y, Heaven and Jazz Cafe as well as the 5100-capacity Hammersmith Apollo, which will be renamed the HMV Apollo. 'Not only will it allow our customers to get closer to the music, it will open different doors for the brand, because for the first time we'll have a unique relationship with artists, managers, music labels and promoters,' says Sim.

The venture will be instrumental to HMV's proposed loyalty scheme, set to be rolled out this year. The Pure HMV card will offer customers 'money can't buy' experiences, allowing them to exchange points accrued on purchases for items such as signed products, back-stage passes and invitations to special events.

Sim is keen to ensure that, as the business expands, all the elements work together. For example, prior to Franz Ferdinand's live performance at the Hammersmith Apollo at the beginning of this week, he organised a live in-store experience to promote the band's latest album Tonight. At the gig, HMV sold band merchandise and offered backstage passes via its reward-card scheme. The event also provided HMV with unique footage for use on getcloser.com.

HMV has come a long way since 2006, when it was mainly a bricks-and-mortar store selling CDs. However, as the business becomes more complex, Sim will need to keep one principle in mind, let content rule, or else risk reducing his greatest passion to being about nothing more than price.

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