I read an interesting story this morning from the Business Insider, saying that Amazon is opening up over 100 Pop Up Stores around the US. The irony is inescapable that Jeff Bezos’ business that supposedly was the demise of many retailers, especially in books and music, is now going to become not only a retailer, but in some of the most expensive mall locations.
It will of course be super successful, especially if they have knowledgeable staff. Even people like me who hate shopping, have certain weaknesses. For me it is cool electronics, gadgets, books and music. I have a Kindle but I also have a library of a least a thousand books, having given a similar amount away to hospice shops and other charities. It is now more of a collection of some of my favorite authors.
I have written countless blogs about Dick Smith Electronics, Borders, Sounds and other stores that could and should still be here and the common thread was they didn’t keep their best staff who had sales skills and product knowledge, because they didn’t pay them enough or value them, they tried to become mainstream lookalikes and compete on price instead of value and customer delight.
They certainly opened the door to Amazon, Ali Baba, Deal Extreme and lots of other sites, but as my blogs (largely focused around BAU) pointed out, many of the reasons for failure were poor management or board decisions, not because the market didn’t want to spend money with them.
One of the last times I shopped at Dick Smith, I wanted to buy some Kindles for my family. I wanted to see the difference between the Fire and the Paperwhite and confirm that you can access Auckland Public Library eBooks, which as you can see on the story, their Point of Sale material says you could. You’ll find the story here. I bought the Kindles from Amazon.
In other blogs I predicted the demise of Dick Smith Electronics for several of reasons, starting probably 3 years or more before they went down. The rot was a lot worse than I realized and the court cases continue. In my humble opinion, shareholders and customers were badly ripped off and a successful business lost its way. It should still be here and profitable. It frequently amazes me how poorly some businesses are run. It seems that not only did they not listen to what their customers wanted, but they failed in even basic things like aged stock and stock turn, which is criminal in retail and wholesale. But they also lost track of what their customers wanted, in fact my experiences suggested they didn’t give a damn about their customers or in fact most of their staff in later years. They became an also ran and left the reasons people went to them to businesses like JB Hifi and Jaycar.
Even smaller niche stores, like local hardware DIY stores can fight against the mega stores, but they need help and don’t have time. When they close their doors for the last time, they might like to think back about whether they should have made time. There are people that can help them. One thing I do recommend is when you buy a retailer from someone who has failed in their business, don’t let them train you!
Borders was one of my favorite stores for lots of reasons. They still have a few stores around I believe, selling soft toys and all sorts of things to survive. Their model needed to change a little, but not a lot. I had a few ideas. I didn’t share them all, but I did share quite a lot. I have learned that there are too many people who aren’t prepared to pay a consultant a few hundred dollars for information that can save or earn them hundreds of thousands or millions. I have taught retail millionaires how to make more money. If only I had asked for a profit share on the results they gained from my advice and training! If I had another life I would be a large store grocer or a mega hardware DIY retailer. Both are licenses to print money and only scratching the surface of their potential.
It’s a beautiful day today and I’m going to take the roof off the car and go for a drive. But I guarantee if I went to the local mall it will be busy with people checking out products, touching them, asking questions and spending lots of money. The companies that are doing the basics right including looking after their staff, giving them PK and teaching them about the importance of customers, listening to their customers, managing inventory, maintaining a point of difference, will make a reasonable profit.
Retailers in today’s age of mobile, location based services and customers who have a variety of ways to purchase product, need to be switched on. Those who have managers and boards who focus on old school BAU (or not as in the apparent case of DSE now playing out in court) and just expect increased profit and decreased overheads will find ways to say that it was a fait accomplis that they went under, that it was out of their control because of online retailers, will fade from memory.
All business needs to constantly learn and make an effort to keep up with the play. It’s not rocket science. Most of the things we are starting to do now were predicted by Gartner, by Arthur Anderson (they may have died through a scandal but they were prophetic when it came to the future of retail), by the NRF which still has amazing conferences in New York every year. This is an evolution and its all about timing. The things that are happening today, the successes and failures were predicted 10-20 years ago.
In fairness, sometimes things are obvious from outside, but you don’t have to use consultants. Invest in a tax deductible business trip to New York for NRF or the best of the best conference for your industry segment, you can sight-see at the same time and make it your annual holiday. You have time for that right? Learn and try some things and your Return on Investment will be massive.
If you can’t do that, read. There are awesome papers and books on everything you can imagine, passionate people who want to share their knowledge. As Einstein said, if you do the same things you always did and expect a different result……. Actually he was wrong. Luigi Cappel says, “If you do the same things every day, you will atrophy and so will your business”.
I could go forever but the sun beckons. Nothing is a given. New wild cards aren’t that new, its just that they have taken the initiative. Businesses like Uber, AirBnB, Turo, Lyft and others that are popping up every day are challenging BAU and taking business from others who could have just as easily taken an agile model, asked their customers what they wanted and delivered, which would have meant these new businesses wouldn’t have had an opening. In fact, it’s not too late. Instead of complaining when you see a new cool model trying to attract your customers, why not build it into your existing business and shut them out by becoming better than you were? Be thankful that despite the fact that you didn’t ask your customers what they wanted, someone else did.