They will be able to download videos to a memory stick, sup on a smoothie or tap away in the iMac hub, but will shoppers actually spend any money when HMV unveils its “next generation” megastore today?

Dudley, in the West Midlands, has been chosen as the testing ground for the 86-year-old retailer’s attempt to leap into the digital age.

A collapsing CD market contributed to a 73 per cent slump in HMV’s pretax profits. Internet shopping and downloading forced the closure of the rival high street chain Fopp.

After six months of refurbishment, HMV today unveils its solution – a “compelling multi-channel social shopping space and experience” designed to attract the wifi-enabled shopper. The store, which measures 8,000 sq ft (750 sq m), contains digital kiosks that enable customers to download songs and video clips for free. Shoppers download the content on to a memory device, such as a USB memory stick, which they can then transfer to a PC, mobile phone or MP3 player.

A “social hub” will contain the latest Apple iMacs, connecting customers to a range of music and entertainment websites. Gamers are invited to settle into a comfy chair and take on real-time challengers from around the world, free, in the Xbox 360 Live zone.

A mini Apple store, selling the latest iPods and accessories, will replace the racks of back-catalogue CDs. Digital radios and DVD players are for sale and the mobile phone company 3 has an instore outlet that offers exclusive deals to HMV customers.

Lovejuice, a leading juice bar, will serve freshly made smoothies at a hub that has been created for laptop users. Interactive screens are dotted around the store, while window displays have been replaced by giant plasma screens in what HMV described as a “hi-tech blueprint for the future”.

Nine thousand CDs and 8,000 DVDs will be on sale for old-school shoppers who want to leave with a physical memento of their visit. The chart-topping band Hard-Fi will open the store with a performance podcast from the HMV website. However, HMV admitted that many people will use the store as a fun place to hang out without buying anything. A spokesman said: “We want people to enjoy using the store as social experience. By bringing the physical and digital elements together we hope there will be something for everyone.”

But Luke Peters, deputy editor of the gadget magazine T3, said that HMV must not forget its roots in the rush to accommodate the downloading revolution. He said: “iTunes already offers this service from home.

It’s hard to think of a time where buyers won’t crave that tangible, face-to-face interaction where this week’s big tune is recommended by a real-life, talking human.”

HMV chose Dudley as an “under-the-radar” town where the first step in its retail revolution could be tested. The reaction of customers to the new instore services will be monitored closely.

Another digital store will open in Tunbridge Wells, Kent, before they are introduced across the country.

HMV claimed yesterday that its strategic overhaul was beginning to bear fruit, with sales rising by 5.8 per cent over the past quarter. This was attributed to the new Harry Potter book, wet weather, the collapse of the Fopp chain (which HMV has bought) and strong sales of games consoles.

Graham Sim, HMV marketing director, said: “I believe that these exciting new features will not only capture the imagination of people in Dudley, but will help to create the template for HMV stores in the future.”

The traditional record store may still emerge triumphant. Dave Chase, marketing manager of the independent record label Mute, said: “Perhaps record stores will be charging an entrance fee by 2020, as city centre entertainment theme parks.”

For the record

1900 Nipper, the Jack Russell terrier and “His Master’s Voice” trademark, appear in Gramophone Company advertising literature

1921 Sir Edward Elgar officially opens first HMV store at 363 Oxford St, London

1939-45 Store designated an official air-raid shelter. Acts as a recycling point for Shellac – the raw material used in records

1960s Pop revolution sparks expansion, with 15 new stores established

1986 Bob Geldof opens 50,000 sq ft (4,600 sq m) HMV at Oxford Circus, recognised by the Guinness Book of Records as the world’s largest record store

1997 HMV passes 100 stores when Robbie Williams opens Birmingham outlet

2007 First “next generation” store opens in Dudley

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