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In a recent post, we discussed Amazon’s new brick-and-mortar venture. What we didn’t mention was that in early 2015, Amazon approached RadioShack about taking over some of its stores.
Now there’s a stark contrast.
One of these brands continues to disrupt like a scrappy startup and dominate the retail industry. The other—in business for nearly a century—wobbled in place for years, seemingly clueless, while the world rushed by. Now, it’s a shell of its former self. Like the Walking Dead.
The message here for retailers?
How Complacency Took Down a Once-Great Brand
In Q1 2015, RadioShack declared bankruptcy. The decade prior saw a string of CEOs and a host of disparate strategies that fizzled and failed.
Add to this corporate chaos a dismal customer experience. Corporate seemed a world apart from RadioShack’s in-store personnel and the people they served. RadioShack associates’ overly aggressive sales tactics (mandated by corporate) drove customers into the arms of other brands.
When Best Buy and other retailers started to close in, RadioShack didn’t move aggressively to capture its original target market (the do-it-yourselfers). And the company all but ignored consumers’ growing demand for whole products versus electronic parts. RadioShack allowed its inventory to become, in a word, passé.
Bottom line: RadioShack wasn’t listening. It wasn’t looking to the future. And it wasn’t prepared for the forces that would eventually bring it to its knees.
Cautionary Tales Abound
Sports Authority, once the leading sporting goods retailer in the U.S., filed for bankruptcy today. Some blame the company’s inability to adapt to new consumer trends and tastes. Not to mention a lackluster customer experience. Sports Authority associates lack specialized knowledge and, as surveys suggest, make little effort to engage customers.
At least one analyst has called for Sports Authority to revamp its sales and merchandising strategies.
Reinvention is a really hard thing. It means a large organization like Sports Authority really stepping back and blowing up their business model.
For many retailers, “blowing up their business model” is an intimidating proposition. But for Sports Authority, it may be a matter of life or death.
Consider Dick’s Sporting Goods, the biggest beneficiary of Sports Authority’s downward slide. Dick’s continues to look for new opportunities and attract new buyers in new ways, via “stores within stores” and major omnichannel improvements. The company has also narrowed its focus, relegating its outdoor equipment sales to its Field & Stream stores.
Dick’s strategic focus and its push to innovate are strengthening its brand image and market position by the day. Did Sports Authority wait too long to heed these lessons or completely miss the mark?
Established Brands Have a Decision to Make
Today, a retail giant like Lenscrafters has a huge advantage over a startup like Warby Parker. Established brands have the recognition, reach, and resources to copy or improve upon startups’ innovative business practices.
But is it worth doing?
This is the choice established brands face. They can continue doing things the same way (“eyeglasses in an hour”), in keeping with a successful tradition. Or they can learn from disruptive brands, which are busily raising consumer expectations, and aim higher to serve customers better.
In April 2016, Lenscrafters will begin opening shops in 500 Macy’s department stores (an exclusive partnership between the two brands). Lenscrafters is promising a “new and modern brand experience that Lenscrafters is creating for its customers.”
New and modern. Interesting. Is Lenscrafters looking to beat Warby Parker at its own game?
Aim to Evolve, and Never Stop
If you want to conquer complacency, you need a sound business strategy and a solid plan to execute. Start by asking yourself these three questions:
- Who are we?
- Who do we want to be?
- How are we going to get there?
- Here are three things leading retailers do to chart a path forward and stay on the leading edge.
Your brand can’t be all things to all people. Focus on what you want to excel at, and the specific target market you’re aiming for, and let go of the rest.
Plan for Multiple Scenarios
We’ve seen what happens to retailers that can’t adapt to market trends and disruptions. If you imagine multiple futures and develop a game plan for every contingency, you won’t get blindsided.
Engineer the Brand Experience
This is where the rubber meets the road. Engineering the brand experience—from brand awareness to post-purchase—should involve all aspects of the business, from corporate policy to infrastructure to associate training.
Many retailers may have a general idea of the experience they want in their stores, but only a few have taken the pains necessary to engineer, plan, and stage those experiences with precision. The experience you received in a Starbucks, Apple store, or Ritz hotel is not accidental but completely deliberate and by design.
There’s only one way to get this right—and it’s not intuition or a roll of the dice. Customer experience research (mystery shopping, customer satisfaction surveys, and http://blog.iccds.com/customer-intercept-interviews) should be both the basis for change and the tool by which you measure success.
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This article was originally posted to our blog where you can find more posts like this at ICC/Decision Services Blog.