In the world of retail it’s pretty rare that brands get into trouble over night–much less over a matter of months or even years.
What will turn out to be the deathblow for Sears started with Walmart in the 1980’s, and was followed by Home Depot, Lowes and Best Buy chipping away at Sears core tools and appliance business as these insurgents opened new stores and improved their offerings over many, many years.
The ability to deliver books, music and other forms of entertainment digitally (or shipped directly to the consumer) just didn’t pop up one day. Blockbuster, Borders and Barnes & Noble had years to respond. They just didn’t in any especially powerful way.
Starbucks initiated its rapid store growth more than 20 years ago. And the broader reinvention of the retail coffee business by local independents, along with forays by Keurig, Nespresso and others, is hardly a recent phenomenon. Yet it’s hard to point to anything particularly innovative that industry leaders Folger’s and Maxwell House have done during this extended period, despite their brands continuing to lose sales and relevance.
As Macy’s, JC Penney, Dillards and other traditional department store players garner lots of negative press about their current struggles, we should remember that the department store sector has lost relative market share for more than two decades. Their problems are not simply a function of the growth of e-commerce. And even if they were, the best in class players were investing heavily in e-commerce–think Neiman Marcus and Nordstrom–more than 15 years ago.
Crises created by unforeseen events are one thing. Slow motion crises only reveal that we took our eyes off the ball, were too afraid to act or both.
The way to avoid a retail slow motion crisis is as follows:
- Understand where customer value is being created on a go forward basis
- Dissect your most valuable customer segments to understand where your brand is vulnerable and where you have potential leverage
- Figure out where you can compete by modifying your core business and where you need to innovate outside of your core
- Don’t be afraid to compete with yourself
- Consider acquistions as way to build new capabilities quickly
- Embrace a culture of experimentation
- Spend more time doing, than studying.