6 Ways to Combat the Fall of Brands
“If the rate of change outside exceeds the rate of change inside, the end is near.” — Jack Welch, former chairman and CEO of General Electric.
It is incredible the amount of truth this statement has to companies and brands. People, technology, and the world is constantly changing, and seems to be changing at a rate that is difficult to keep up with.
As Jack's quote above conveys, the technology is changing with or without you on board, so if you fail to keep up with it, your brand or company will be forced to end. It is important to learn from the companies and brands who have not kept up with the technology changes, as much as the ones who have.
Oops, let's take a hard lesson from a couple companies who decided not to move with the changing times and found the end too near.
Blockbuster: This once popular video rental store, was the at the top of their industry in 2000. After turning down Netflix's opportunity to partner together that year, the company continued to reach revenues of $6 million by 2004, 70% of it's profits coming from late fees.
They quickly realized the online streaming services and the DVD-by-mail services were picking up speed and while they tried to change it's entire function and way of thinking, it was too late. They spent too long relying on their current model before switching gears. They filed for bankruptcy in 2010.
The changes in technology and the customer's expectations for "renting" movies happened so quickly, that it actually was unforgiving to those that didn't keep up.
Moral of the story, don't let current successes and risky opportunities deter you from doing the appropriate research to change with the times.
Toys "R" Us: "I don't want to grow up, I'm a Toys "R" Us kid." The toy store's slogan is quickly fading from our minds as the 70 year old company filed bankruptcy in September 2017 and is in the process of closing their US and most of their UK stores.
They first began as a category specific retailer, focusing on large volume and inventory that would beat out merchandise chains. This worked until Walmart and Target decided to drop prices and dominate holiday sales.
By 2005, sales had been falling and company's stock was falling as well. In that same year, Toys "R" Us was bought for $6.6 billion, however the private equity groups that bought it didn't buy it with equity. It was purchased with some equity, along with the company's assets to raise more debt, making the debt of the company double their profit.
With this, the goal was to focus on their battle with retail stores such as Walmart and Target, but didn't realize the shift the market would take towards Amazon and online sales. Their cash flow did not allow for the battle with retailers, online retailers and their debt issues.
When Toys "R" Us filed for bankruptcy in September 2017, it disclosed it had about $5 billion in debt and was spending about $400 million a year just to service that debt.
Moral of the story, don't expect the world to change to accommodate your business, you must make the appropriate changes, and have the appropriate cash flow to implement new ideas and keep up with technology and your competitors.
How Do I Combat the Fall?
You've seen the fall, and you now want to avoid the fall. Yes, that's the goal. Well, here are the 6 ways to combat the fall, and in no particular order, as they are all as equally important (except we can help with #1).
#6 - Keep an eye on the competition.
It is critical to have a team of researchers that are looking multiple steps ahead, following trends, researching historical studies, and keeping their competition in their focus. You can't keep up with, or get ahead of, your competition if you aren't doing these things. Plus, if you aren't doing these things, your competition will.
#5 - Evaluate Processes.
As we saw from both Blockbuster and Toys "R" Us, if you just keep chugging along with the same processes, everything else will change without you (time, technology, customers, trends, etc.). Forbes.com points out in an article regarding Toys "R" Us, "To succeed today leaders need the money to invest in change, and they have to constantly invest it in change, or their companies will lose relevancy..."
A brand that has successfully adjusted their processes is Build-A-Bear. They brought on a new CEO, closed unprofitable stores, and began focusing on their store base. The stores themselves have even been renovated to highlight the pull of their brand (the feelings and connections with the bears being built), including interactive stations creating a more personalized experience.
#4 - Take Risks.
Taking risks aligns with evaluating processes as well. Sometimes you have to take risks, after careful consideration, and hope that they pan out because change is happening anyway, and if you have evaluated processes and kept an eye on your competition, it's time to take a risk.
Legos brand took a risk in 2014. About 10 years prior, they were on the verge of bankruptcy. With a few changes to their processes and a risk to take, they jumped into the line of Lego Friends, launched a movie called "The Lego Movie," and a series of products made it more than just a fun toy. Legos reached a net company profit of $1.5 billion in 2016.
#3 - Providing Better Customer Service.
Providing a valuable shopping experience for your customer can make the difference from the moment they step into the store. Let them know you are there to help, add value, provide them an experience that is unbecoming, and that you keep your store presentable for their convenience.
Mark Cohen, Director of Retail Studies at Columbia University’s Graduate School of Business, divulged to Knowledge@Wharton, "he said the stores were too big, jammed full of inventory, poorly merchandised, and customer service was virtually nonexistent. A poor shopping experience won’t entice busy consumers who would rather grab a toy from Target while they fill their carts with groceries, school supplies and the rest of life’s necessities."
#2 - Social Media, Focus on quality not quantity.
It is pertinent that you are on top of your social media game. This is your chance to interact on a personal level with global audiences. Targeting your message to reach the audience you intend can change the retail game. You can push discounts, sales, interactions with customers, feedback, contests, and even corporate social responsibilities that you participate in.
Sharing pictures and videos that truly show your brand off to the world can increase your sales as well as bring in those customers to your brick and mortars. A section taken from a Hoot Suite article entitled, 5 Lessons From The Top Retail Brands boasts:
"Social media marketing cannot be limited to posting to a social channel. It requires constant measurement and planning before and after posting. Brands can excel on social media only with data-backed insights.
Monitor how well your posts perform. The metrics you look at should give you a clear picture of where you stand vis-à-vis your social media goals.
It is essential that brands have a clear picture of the broader social media landscape. By considering their own unique strengths and social media ambitions, they must find a space where they can get through to their target consumers."
#1 - Incorporate Digital Signage
An investment in digital signage is pertinent for retailers that are looking to extend or grow customer engagement, elevate brand perception, and for internal operations as well.
Signagelive, offers a statement that "Digital signage in retail delivers the shopper experience that connects the online and on-mobile marketing to the physical in-store experience. Retailers are using digital screens in conjunction with mobile apps and beacons to deliver a holistic customer experience across all the various media touchpoints that a consumer engages with."
The message options are endless. Signagelive provides us with just a few ideas: in-window signage, way finding, signage within products, bring products to life, comparison products, beacon technology, and a last chance till sale.
It can also be used for internal operations such as scheduling, policy changes, ad campaign rollouts, employee events/activities, and for emergency/safety notifications.
One particular global retailer, Express, headquartered in Columbus, Ohio, had realized its brick and mortars’ foot traffic had started to decline. After partnering with digital signage integrator, Coffman Media, they decided to implement a digital signage system that included an action/reaction relationship to engage customers called Lift-&-Learn.
At the location that implemented this technology, the store saw an increase in fragrance sales. A successful use of technology within a retail space that increased sales. That is a win for digital signage and for the combat against the fall.
Coffman Media offers a white glove integration service where your message is the focus. In the retail world, Coffman Media can help you find opportunities to use digital signage in ways that will expand and enhance your business or organization, help keep your doors open, in other words, combat the fall of your brand.
For a free consultation, click this link!