Dead Brands Walking
What follows is a sub-chapter from my new book. When I wrote it last fall I had no idea how prophetic it would be.
While I had been writing and speaking about the collapse of the middle and the increasing irrelevance of retailers that were failing to become more remarkable, the pandemic has accelerated just about everything. But that’s a different post.
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Before much longer the middle may be hollowed out completely. Until then retail’s great bifurcation is likely to continue unabated. Too much real estate is still chasing too few dollars. Many over-leveraged, undercapitalized retailers still offer weak value propositions and may soon face a real reckoning. The macroeconomic pressures driving trading down behavior won’t end anytime soon, while the rich continue to get richer. The disruptive forces that are pushing down prices and, particularly in cases like next-day and same-day delivery, driving up the cost of business will squeeze margins to the point of no return for many poorly positioned retailers. The power the consumer holds will not allow many just-good-enough retailers to sustain market share, much less ever achieve adequate financial returns.
It’s a good time to be a bankruptcy lawyer or liquidation firm because, unfortunately, more brands will go over the precipice. We see this slow death playing out every day. These troubled brands continue to run their one-size-fits-all ad campaigns and their “Super Saturday” sales. Their promotional signs call out longingly in hues of chartreuse and yellow. They stack merchandise high and hope to watch it fly. Their email campaigns consist mostly of batch, blast, and hope. They apparently continue to cling to the hope that a slightly better version of mediocre will turn out to be a winning strategy.
These brands act like they are still in business. They think that some customers still really care whether they stay or they go.
I see dead brands. And they don’t even know they’re dead.
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"The Store Operations Council enjoyed every minute of Steve Dennis's presentation on retail's future. He always keeps it real and speaks the language of retail experts."
Cathy Hotka
Principal
Cathy Hotka & Associates
"The Store Operations Council enjoyed every minute of Steve Dennis's presentation on retail's future. He always keeps it real and speaks the language of retail experts."
Cathy Hotka
Principal
Cathy Hotka & Associates
