THE JOURNEY YO REMARKABLE RETAIL

Steve helps organizations understand and respond to retail disruption by creating customer-centric, memorable and profitable growth strategies.

The Bullet’s Already Been Fired

The bullets that killed RadioShack, Sports Authority, KB Toys, Sharper Image, and many other once iconic brands were fired long before their respective downward spirals of cost cutting and store closings began. They weren’t legislated out of existence. Consumer behavior didn’t change overnight. The superior brands that stole their market share and won over their formerly loyal customers mostly did it over a number of years.

And while it may make for a catchy headline, Amazon didn’t kill any of them all by itself.

In recent months a whole new wave of storied retail brands have gone extinct, filed for bankruptcy or are teetering on the edge of the precipice. More than 25,000 brick & mortar stores may close this year.

It’s easy to blame this all on the pandemic, yet it’s often the case that the current and future victims of an amplified wave of disruption put themselves in highly vulnerable positions by acting as if a slightly better version of mediocre was good enough to be truly customer relevant, to be the compelling signal amid all the noise.

The notion that disruption comes out of nowhere, catching once powerful companies unaware, is rarely true. What’s far more common is that new brands catch fire slowly, consumer behavior shifts over many years, and most technologies take a while to grab a meaningful foothold.

If you work for a brand that is in trouble today, the forces most likely have been building for quite some time, and the underlying issue is this: leadership didn’t notice. Or maybe they were aware, but they didn’t accept that profound change was needed. Or maybe they knew what was coming, but they failed to act with urgency and decisiveness. Regardless, right now there is a pretty good chance a bullet is headed your way. And the current global crisis has only served to limit your options to return to relevance.

I have long been fascinated by management’s capacity to get stuck, the many ways executives craft a narrative in a vain attempt to avoid change, the stories they buy into as they hope to keep above the fray. Far too often, the power of denial seems endemic to individuals and organizations alike. Believe me, I’ve been part of such teams myself.

Go back to the ’80s and ’90s and recall how a slew of successful retailers mostly did nothing while The Home Depot, Best Buy, and a host of innovative discount mass merchandisers and category killers moved across the country, opening new stores and evolving their concepts to completely redefine industry segments. Somehow it took many years for the old regimes to realize what was going on and how much market share was being shed. For many, any acceptance and action came far too late (RIP Caldor, Montgomery Ward, among many others).

Witness how the digital delivery of books, music, and other forms of entertainment came into prominence while Blockbuster, Borders, and Barnes & Noble spent years doing nothing of any consequence. Two of them are now gone and one is holding on for dear life.

Similarly, Starbucks’s revolution of the coffee business hardly occurred overnight. But if you were a brand manager at Folgers or Maxwell House, you were apparently caught unaware.

Consider how consumer behavior has been shifting strongly toward online shopping and the utilization of shopping data through digital channels for well over a decade. Yet many companies are seemingly just now waking up to this profound change. And as the current crisis lays bare, there is little room to hide and scarce time to catch up.

Lastly, examine how the elite players of the luxury industry have largely resisted embracing e-commerce—and most things digital—believing that somehow they were immune to the inexorable forces of consumer desires and preferences. Yet while they sat around and mostly watched, Neiman Marcus, my former employer, grew their online sales to nearly 35 percent of their total business.

More often than we care to admit, the bullet’s been fired, it just hasn’t hit us yet.

The good news is that while the pace of change is increasing in retail, we have a lot more time to react than we do in a gunfight.

The bad news is that the impact can be just as deadly if we are not prepared and we do not act.

I’d hurry if I were you.

 

The above is adapted from a section of Chapter 1 (“An Epic Revolution”) in my new best-selling book Remarkable Retail.

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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

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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

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