1. The Way We Were
Remember that song? If you don’t, it cheesily lamented a past time when two people were happy and content with their situation-which had passed.
Remembering that time in retail is just as useless as the emotion in that song. In the song or in the real evolution of retail, remembering how things were only makes sense if it provides a starting point for the starting point of change.
Sadly, that wistful but useless approach is not how many companies, both retail and brand, look at the past. We see entrenched management with a vested interest in their leadership which led to current troubles, out of fear, insecurity, or just lack of a clue as to what to do next, defending their failed or failing business model.
NOTE TO MANAGEMENT- “the way we were” is never going to return. So get over it and move on. This takes some courage and doesn’t work if you are risk averse in any way. This is because, for many, change does not mean little tweaks-it means a complete and objective analysis of what you did, why it didn’t work, and how to move ahead. I believe this means a wholesale change of, first, business philosophy, process, and, most important, probably a wholesale change of the people that failed- including the same people that are charged with making decisions about change in the future.
Brutal, I know-but this is what happened to the dinosaurs. They failed to adapt, and are extinct. In today’s retail environment, such a wholesale extinction is more than possible.
As said in the first installment of this article, we have already moved on from the era where department stores and famous brands were king. In part, this is due to the emergence of retailers such as Uniqlo and Inditex who have legitimized their own brands with good fashion, value pricing, and item-oriented merchandising. That being said, a significant portion of the blame lies with the department stores and the brands themselves: The department stores got greedy and emphasized, in OTB dollars and floor space, their private brands to create a price conundrum in the customer’s mind; the brands also got greedy. They were not content to maintain the exclusivity of their brand product and price (especially when challenged by retailer’s private brands and the emergence of mass retailing), and, thus seduced by price as the driver, compromised the quality and integrity of their product so they became no different than the private brands- just the opposite of what they should have done.
So here we are- brands we grew up with are either history or being reduced to so-what in the consumer’s mind. And, as the distinctive appeal of these brands declines, their department store partners also become a so-what.
2. Is Extinction Inevitable?
If nothing changes, yes. This is Creative Destruction at its finest- for something to be born, something has to die. In this case, if a new path is not allowed to be born, death is inevitable. There is no reincarnation, it is just-death.
I don’t believe this has to be the case. There is still value in brands and in the institutions we call department stores- but that value is declining rapidly and the bleeding must be stopped soon.
So what should be done for brands and department stores to have a chance at a bright future in the current and developing retail environment?
1. For Brands-
a. Play a little hard to get. Be selective as to where and how your merchandise is sold at retail. Don’t sell to stores where your brand is not respected and is just another fixture in a confusing, discouraging and price-driven environment.
b. Respect your own brand integrity- look for innovative ways to present your product- New fabrics, new fits, etc.
c. Respect the opportunity to marry digital to brick and mortar- so that once your customer following returns, they can access the product anywhere and combine the two.
d. MOSTLY, do not compromise your product even 1 percent for price.
e. NOTE TO MANAGEMENT: Wake up and throw your egos out the window. Recognize that your troubles are because something or somethings you have done in the past are not working. And that, like the song, you can pine wistfully for the way we were, but it ain’t coming back.
d. ANOTHER NOTE TO MANAGEMENT: Take all drastic and precipitous actions needed- all in or nothing. You can only do this once you have really opened your mind that anything is possible. Replace what and who needs replacing- Including yourself.
2. For Retailers-
a. Start with c. above, goes for you as well. You need to accept that some companies are more successful than you now because they are doing something right and you are doing something wrong. I don’t care who you are and what is the company name on the door.
b. Don’t be afraid to copy what they do right. For most department stores, this will involve completely changing your buying and merchandising philosophy, which in turn will dictate how your stores look. You must represent a very clear direction and key items very clearly in each department.
c. Make your floors and your merchandise look inviting and interesting, not overassorted, overcrowded and discouraging.
d. Hire some buyers who can be successful in a changed environment. Real merchants with some experience and an affinity for fashion and style selection.
e. Start to cultivate a culture of VALUE, not price. Make your customer believe you. This may take time, but it is the only way to succeed.
When the dinosaurs died, only those creatures who could adapt to the new environment survived. So I guess the bottom line is, are you a dinosaur or a survivor?
Change, or die. Simple as that.