By Victor Chew Wong
Victor, a member of the BCAMA Marketline Committee, presents his thoughts on a presentation from Doug Stephens at the May 22, 2013 VISION Conference in Vancouver.
For 50 years you could be average and get by. But now that’s a recipe for the death of your business. At least, that’s what retail prognosticator Doug Stephens (retailprophet.com) says. And whether you test that hypothesis against your own intuition or the collapsing traditional retail marketplace, the resonance of truth rang from his presentation with the clarity of gospel.
Mr. Stephens, a self-declared retail prophet, strode on stage not in flowing white robes, but all in black – a pallbearer, if you will, for once mighty retailers who continue to crumble at the feet of this leviathan called the Internet. Blockbuster Video and Borders: poof, gone. Best Buy and JC Penny: flailing in red ink as we speak.
According to Mr. Stephens, in the three minutes it takes you to read this blog posting, Amazon will make more than 55,000 sales. By this time tomorrow, Jeff Bezos’ beast will have shipped 55 million products.
And if you’re a retailer (or lawyer, or web designer, or writer, or teacher or…) who is competing on price, then please do yourself a favour and write your obituary now.
But all is not lost. Despite his gloomy attire, Mr. Stephens proffered good news for those willing to look deep into the soul of their businesses, to stand at the edge of the abyss, and to be remarkable or innovative – or, simply, exceptional.
In 1962, the collusion of demographics and demand spawned hundreds of the iconic brands today: Kohls, Kmart, Target, McDonalds. In 1965, you only needed three TV spots to reach 80% of the viewing public. In 2013, you would need 117 prime-time spots to get same viewership.
Back in the day, all you needed to be was average and you could write your own ticket. But today, “software eats average,” says Mr. Stephens. And it’s hard to argue.
“In a world of one-click satisfaction, no one needs what you sell. If you don’t sell it, someone else will. We need how and why you sell it. If you can’t think of a more interesting way to sell it, someone else will.”
Whole Foods, Warby Parker, Holt Renfrew and Apple are examples of clairvoyant retailers who trade not in product, but in experience. Their market share, profit and embrace of the Internet are testament to an investment in the “remarkable”.
Best Buy, Sears, Staples and JC Penny – all remarkably unremarkable – will be lucky to see the next decade.
“The store used to distribute the product,” Mr. Stephens says. “The store now distributes the experience. The store is becoming the media. We go to the store less to take things than to make things.”
He described a Karl Lagerfeld concept store in Amsterdam where iPads are available in the change rooms to take of photo of yourself and then post the image to Facebook – and get feedback from your posse before parting with your cash.
In New York City, retail store Story bills itself as “a retail space that has the point of view of a magazine, changes like a gallery and sells things like a store”. Story changes its look, products, merchandise and fixtures every eight weeks.
In Seattle, Hointer, a men’s jeans store, uses robots, QR codes and a smartphone App to deliver your selections to a change room before you even get there. Once you’ve chosen the jeans you want to buy, you pay for them in the change room, using a tablet.
Mr. Stephens says that in this new Darwinian age we are seeing the “death of crappy businesses”. And a Facebook page won’t help you. “If your brand sucked before Facebook,” Mr. Stephens says, “it’ll suck after Facebook. You need big improvements. If a new idea doesn’t scare you, it’s not innovative. You have to go first. You can’t wait.”
Prophetic words, Mr. Stephens – I tip my (black) hat to thee.