Dinosaurs still exist .....barely

I wrote the article below 5 years ago ..... it was clear then that unless the likes of Myer & David Jones changed they were destined to fail. So how have they done? Appallingly.

An opportunity was there to reset their business model around a new and compelling experience. They didn't. They hired executives that essentially tried to improve on what they were already doing and it wasn't even evolutionary let alone revolutionary. Stores continue to be closed, staff continue to get laid off, stock continues to gather dust.

They are not alone. In Australia in the New Year we have seen a number of bricks and mortar retailers close. Almost in every case they blamed things that they could not control rather than evaluating and recognising that the things that they could were not what consumers were looking for from them in the way they were providing them. Any company that keeps making excuses for their own poor performance is ultimately doomed.

Sadly I think this can only go one way for this type of retailer. The winners? Any company that takes the time to learn what it is that consumers would look to them for and can then provide it. Also the parcel delivery companies!

The lesson yet again is that unless you start from the outside looking in all you are doing is looking in a mirror and deluding yourself that what you see is what the customer wants.

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March 2015

Yes they do.

You can find them. But they are dying. And it won't be long before they disappear completely..... or will they?

I am referring to the Retail Dinosaur - The Department Store. They used to dominate the trade. Now they are fast becoming a reminder of the past rather than a window to the future surviving on heavily promoted sales periods rather than on a compelling reason to shop there.

For years now the traditional department store has been attacked from two sides - the specialist retail store and the online store. Specialist retailers generally have done a brilliant job to find their niche, build their brand and generate interest. The online retailer has had mixed results to date with the results basically matching the level of focus and investment in the customer experience.

While the retail world moved on the once dominant department store has failed to recognise the threat adequately and in the process has found it difficult to recover. 

Regular talk of re-vamps and improving service has not stemmed the revenue slides and primarily because they continue to look from the inside out rather than taking the perspective of the outside looking in. Strong managerial words and increased marketing spend does not mean a thing unless there is a recognition that the customer is an integral part of the sales experience and contributes to it rather than just being a recipient of it.

Customers all value things differently and it is in the differences that the true customer experience lives. Training staff in a traditional sales method misses this completely regardless of the emphasis on customer service. In fact improving customer service may have minimal impact on improving the financial health of the store. Todays customers want and need to be part of the experience and not just a recipient of smart retailing. Specialist retailers that are successful have made inroads in this area, the big department stores are still searching for a solution to their financial challenges and are yet to demonstrate the singular focus required to turn their results around.

In years gone by department stores used to be the place to go, the destination to do all of your shopping, a place to meet up with friends. That has changed to the shopping centres being the place to go and do your shopping and meet friends. Large department stores have become anchors for these shopping centres instead of the single destination for shoppers. Increasingly their relevance even in these centres is diminishing as they struggle to to attract foot traffic in the face of strong focused competition.

There is a chance though. They will need to be bold and brave. Throw out the traditional thinking to date around customer service and customer experience and be courageous enough to set the future up around an inclusive holistic approach with the customer that creates an experience that is unique to both and yet repeatable. They need to jump ahead of even todays thinking on customer experience and become best in class in a new world of chain store retail. Then they just might create something that customers want to be part of in a big way again.

There are seeds being sown in our biggest retailers. With nurturing and care these seeds may just turn out to be the avenues to the growth that change the way a customer shops with them. In doing so they could become the specialists that the smaller retailers admire. Time will tell.