When big brands get it wrong
This week has seen the quite depressing news that more of the UK’s largest and well-known high-street brands have entered into receivership. Jessop’s, HMV and Blockbuster have all called in the administrators with thousands of job losses likely.
A quick glimpse would suggest that the economy is to blame for the demise of these brands. However, a closer inspection reveals that the major factor would be these brands inability to change.
In recent years the way that their core products are consumed has changed, massively. Consumers are still purchasing the products that these brands became famous for; it’s just that it is purchased in a totally different manner to the traditional high-street store. The money is there, it’s just the shoppers have moved.
Online sales are increasing year on year. Why go to the high street when you can download your favourite track or film? Why bother renting a DVD when there are cheaper, more accessible and convenient alternatives online?
Big brands are like oil tankers moving through the ocean. They take longer to change, are slower to adapt and maneuver. These are their weaknesses. Their strengths lie in that with their bigger crews and more sophisticated navigation systems, they should be aware of stormy seas and able to prepare properly.
Smaller businesses on the other hand are like speedboats. They can change course quickly, are more nimble and responsive. Their weaknesses are that they are not prepared for long voyages across the rough seas.
Sadly for HMV, Jessop’s and Blockbuster, their early warning systems have failed. They failed to respond to the storm clouds that were assembling, they failed to change course and as a result, they’re on the verge of sinking.
How could they have changed?
A high-street store will never compete in a price-matching situation with the online store. So why bother?
The high-street store should be about the experience. Shopping should be fun and memorable. If you visit a store you should feel like you’ve had an exciting or enjoyable experience and been dealt with by informative and knowledgeable staff providing an unrivalled service.
Instead of competing on price with the Amazon’s, iTunes, LOVEFiLM’s and Netflix’s of the world should HMV, Jessop’s and Blockbuster have played to their strengths?
Should they have made shopping there more of an experience? Invest in knowledgeable staff, experts that love their job, have a sense of purpose and help to build a brand experience that you can’t get online.
Who knows? But if high-street brands are to survive it seems that one thing is sure, cost cutting and price matching only leads one way, down.