Today the Dutch media announced that one of the largest retail companies of the Netherlands, V&D department stores, has failed to find a partner after filing for bankruptcy. 8000 people will probably lose their jobs and that's a truly sad state of affairs... Unfortunately we've seen many retailers close shop and disappear altogether in the past few years. Brands that were thought to be 'too big to fail', have failed. How come?
Since 1996 I've worked in online communication (marketing, websites, campaigns, social media, business innovation) consulting companies, semi-governmental organizations and so forth. During this period I've seen customers and (therefore) the business landscape change and ... every year it has changed even more and faster. As a consultant, I thought, I should point out these facts to our existing retail clients and to retailers in general. When I did, I was shocked. Below are some of the actual reactions I got from multiple retailers:
1997/1998 " Chris ... no worries the internet will 'blow over' and will never be relevant "
2008/2009" Let me tell you; e-commerce and social media are just a hype. It will blow over. People want to come to a store and touch the products, otherwise they won't buy it. "
Apparently these - often more traditional - retailers thought I was a weirdo with a crystal ball 'seeing things that were not there'. This got worse whenever I would point out that people simply wouldn't just 'visit' stores the way they did then simply 'because they have always done it that way'. And when I brought solid branch-initiated (abundantly available) research-paperspertaining to the matter to the table, most of these traditional retailers did not see any need to take a step back, look at their operation and wonder if they were still doing a good job.
And then things went sour; one retailer after another started to 'blame the internet' for declining revenues and dropping traffic 'numbers'(that is actual number people entering stores). The 'internet' and the untimely 'economic crisis' were to blame for allthe misery. Sure, a (large) number of retailers were hit by the fact that people were spending far less in their shops -than they used to,but why did online retailers continue to grow? And why did some retailers manage to keep their businesses stable?
Before I continue. As you might have guessed I'm not talking about all retailers in this opinion piece. Fortunately there are a lot of retailers that got it right and got on the 'innovation boat' in time. They truly embraced the new reality and changed their formula to include true customer experience, online and other developments.
Many retailers tend to think it's never their own fault. Not even when people warned them years ago about the (rapidly) changing customer and 'ways to do business'. It's either 'the internet', the 'economic crisis' or another external reason that's to blame when they fail. Many retailers lack enough sense of urgency and self-reflection to deal effectively, let alone get 'in sync', with the current dynamic customer landscape.
Well retailers; I hate to tell you I told you so, but I told you so.
Unfortunately I strongly believe that we haven't seen the last of big bankruptcies in the retail sector. Why?! Because for things to change, traditional (often still powerful and politically influential) retailers need to change. It's time to stop blaming everyone/everything else, but yourself. Your customer has evolved, you haven't.
What happened to 'the customer is king'? If 'the king' doesn't want to come to your stores anymore to buy stuff, shouldn't you at least ask him/her why, how and when (and that might not fit your traditional opening hours) he/she would like to purchase your products then?
And retailers please ... the answer is NOT stacking sales, upon sales, upon super sales, upon 'wow-this-is-the-ultimate-sale' every two weeks.
To regional politicians; the answer is NOT to 'plant a few new trees and make things look modern and pretty again' in your shopping areas to get customers into - still unchanged - shops. And if you create think-tanks to innovate a shopping area, inviting a large number of traditional retailers in that think-tank, which have failed to innovate in the last few years, do you then expect real changes and results?! I'm afraid to say that I could keep on going for hours and hours with these kind of examples.
But all is not lost! Dear retailers. It's time for action NOW.
Don't do it for me. Do it for all the people that work for you (like the 8000 people who used to work for V&D), to keep city centers alive and fun to shop at and to give customers a truly unique experience and super-awesome service.
HOW? A few tips:
Get your best 'out-of-the-box' thinkers into a room and innovate. Just do it. Forget what you 'used to do' and brainstorm like you would start a new business in the current day reality. In this process it's wise to keep people with too big ego and 'this has always worked that way in the past'-sayers out of the room.
Read those abundantly available retail reports and research papers about how customers (=people!) and the way to do business have changed. Learn how to get 'in sync' (if you're interested I can give you a book-tip for this, please contact me).
Dive into trends and developments (in- and outside of the retail sector), keep tabs on disruptive companies and get inspired by 'weird' guys like me et cetera, et cetera. Embrace them, don't try to reason them off.
Most important of all: get you know your customers again. I repeat; get to KNOW your customer again (that not your assumption on how you think they think), talk to them, and better yet let them be a part of the changes in your retail formula.
If you don't know how or where to start, or if you need inspiration through a presentation or workshop, just contact me - or one of many others that have tried to set the 'retail-wheels' in motion in the last few years. I'm glad to help you!