2013 is going to be a fascinating year for retail in Europe.

When I look at what’s to come this year, I can paint a picture of what Forrester predicts by looking at a tale of two brands. Both are iconic, heritage British brands that have responded to their increasingly digitally enabled consumers in two very different ways. Naturally, this has resulted in two very different levels of success.

1. HMV
One picture says it all . . .

HMV has been around since 1880, opening its first retail store on Oxford Street in London in 1921, with none other than Sir Edward Elgar cutting the ribbon (hopefully with suitably amusing oversized scissors). For decades, HMV thrived by selling music, then movies, and built a significant high-street presence. But despite some mediocre efforts to sell online, HMV largely ignored the digital world. It relied on its old source of competitive advantage — a large (and expensive) assortment of inventory held close to the customers. It failed to see digital disruption and even now, when it is in administration and needs sales more than ever, its digital doors are closed.

I wrote about this almost two years ago; in the intervening period, as entertainment products became increasingly digital and companies like Tesco realized that services like blinkbox were the future of this market, HMV stuck to its old approach. It failed to integrate the digital and physical experience and failed to transform its stores to support a holistic, digital-first customer experience.

2. Burberry
Again, a picture is worth a thousand words . . .

Burberry is a fashion label, right? Yet the closing moments of last week’s London Fashion Week catwalk show demonstrated how completely Burberry understands digital. To start with, Burberry streamed the show live online, accompanied by the piano stylings of Tom Odell. Fashion label? Hang on, shouldn’t live-streaming and piano-driven indie crooning be the domain of entertainment retailer HMV? Not satisfied with simply creating a digital spectacle, Burberry also switched on catwalk preordering of bespoke garments at the end of the show. Yes, you could order a customized garment off the very back of the model on the runway before she had even finished strutting her stuff.

Burberry has so completely embraced digital that it appears to all intents and purposes to be a business born in the digital age. Yet Burberry was founded in 1856, almost 25 years before HMV. I’ve written about Burberry’s transformation as well. The result? Growth.

2013 Will Be A Critical Year For Retailers

Smartphones are mainstream. Tablets are on the rise. The European Commission is rattling the cages on cross-border commerce. Multichannel is a reality, and shoppers’ appetite for cross-touchpoint engagement far outstrips most retailers’ ability to deliver. Advances in digitizing the store environment are moving from experiments to full-scale rollouts. We take a look at all of these in European Online Retail: Five Trends To Watch In 2013

European eBusiness executives are going to have a very busy time in 2013. There has never been a more exciting and opportunity-filled time to be in retail. But the key question you need to ask yourself is this: Do you want to be an HMV or a Burberry?