So in the last three weeks we have seen three retail “giants” fall from grace. But far from being a sign that it is another “dip”, these three casualties were inevitable.
It isn’t a sign of the current economic trading period – but merely a reflection of their inability to adapt within a radically shifting marketplace.
The epitaphs of these three companies – Jessops, HMV and Blockbuster Video – could have been pencilled in 5 years ago as they failed to react to shifts in technology…..
Jessops – as soon as digital camera’s hit the marketplace, Jessops should have been devising a strategy on how to shift their business model from a traditional marketplace which was inevitably going to disappear.
They introduced booths where you could insert your memory card and digitally print your shots in store – but they failed to appreciate that home office printers were improving all the time and that online competitors were reinventing the market with new photo-based products which you could order without even leaving the house!
Jessops’ best chance of high street retail success was to focus on the cameras and perhaps shift to focus on specialist photography equipment rather than the print. Instead it continued to flog a dead horse for too long!
HMV – the moment iTunes was launched the writing was on the wall for high street music retailers. However, surely a high street legend like HMV would have the internal resource to recognise a shift in consumer behaviour, both in the purchasing of music, and more recently films.
It appears not! Either there was too much initial arrogance or too much dithering. Whatever the reason, like most big juggernauts, they failed to change direction quick enough. There is a lot of history steeped in the HMV brand so I am sure we will see it survive in some format – but long gone are the days for massive music retail stores with no point of difference!
Blockbuster Video – I have been bleating on to my wife about Blockbuster Video for years! Video became completely defunct about 6 years ago when Blu-Ray hit the market, and really the writing was on the wall 10 years prior when the DVD format was launched.
Now I know that Blockbuster Video actually stocked these formats but why on earth did they not change their name. Considering they were moving into game hire as well….the term “Video” no longer represented where the business was, and the retail frontage only supported the view that this was an outdated business.
The boom in online film downloading such as Netflix was the final nail in the coffin, but the Grim Reaper was bearing over them for a very long time!
So what can we learn from all of this. Well the first thing is to accept that, like it or not, technology affects us all. Consumers are behaving differently and we have to service them differently, or someone else will.
These beasts were big organisations but companies need to be aware that they can’t let size get in the way of progress. You need to monitor what is happening in the outside world and make sure you move quickly and adapt. The retail landscape in particular is littered with names who have failed to react.
There will be a few more who fail to see early enough what they need to do. With Tesco Law soon impacting on the legal sector, I expect to see some sizeable legal practices falling by the wayside as well – as arrogance overpowers common sense!
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