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The headlines are popping up everywhere this month as one after another Tyrannosaurus wrecks.The latest dinosaur to bite the dust is Blockbuster Video. It followed in the footprints of HMV and Jessops who went into administration earlier this month.
Imagine music, movies, and camera supplies being sold at a retail store. Sort of an odd idea isn’t it? I’ve got an iPod, and iPad, and a mobile cellular phone. I can download all of the music and movies I want without having to leave home or wherever else I might happen to be. As for a camera . . . like I said, I have a phone. (By the way, how long has it been since you have had a “Kodak moment?”)
I saw this day coming when I couldn’t find a car with an 8-track deck in it anymore. Just when I thought the future of music was in quadraphonic systems, all I could find was cassette tapes. I remember crying along with my new cassette tape in my new car (which I had to get because my old one couldn’t play cassettes), “Where have all the 8-tracks gone, long time passing? Where have all the 8-tracks gone, long time ago?”
Lee Iacocca once said, “Every business and every product has risks. You can’t get around it.” Products come and go. Progress and technology change things. Even entire industries come and go. Five of the companies I worked for over the last 35 years no longer exist. Things are changing. Why, if you try to find a cooper today, your best bet is Sheldon on The Big Bang Theory.
Over 1,000 stores and over 10,000 employees are exposed to the effects of the failure of Blockbuster and the others to find a way to adjust to technological change – especially in retail. All of Jessops’ stores were closed within days of going into administration. The problem is that retailers seldom make the product they sell. As manufacturers rethink their vision, retailers can be living in a microcosm that misleads them into thinking that they have a niche market. Here’s a clue: If your niche market is located on the edge of a cliff, get out now! That great thing you think you have going has everything to do with the past and nothing to do with the future.
The accounting firm of Deloitte will now manager the Blockbuster business with the plan of finding a buyer for it. I have already called Deloitte to see if they would ask prospective buyers if they would also like to buy Cinderella’s castle. I’d be willing to make them a great deal.
Let’s face it. Our lives are changing at a rate that has never been witnessed before in the annals of history. Failure for the retail sector to think forward, let alone keep up, is going to continue to drive people out of work, increase retail vacancy rates, and cause other shop owners, if there are any left, to look into vacant spaces rather than support new construction. One expert said that the retail closures, along with Comet and Stead & Simpson represents the largest closure rate since the collapse of Woolworth in 2009. He said, “The has the potential to increase the national shop vacancy rate by nearly 5% to an all time high of over 19% if all the stores close and are not re-occupied.” At least it’s not as bad as 20%.
Thirty years ago businesses began to realize information was going to be the hallmark of thriving concerns. Prior to that it was often first to market that spelled success. Today the challenge is to see the need for transformation and to respond to it quickly. Too much time spent counting beans and taking bonuses home leads to no beans to count anymore. We live in an age where the vision of leadership trumps management of the status quo. A professor at the Cass Business School said it well.
“The company (Blockbuster), like HMV, failed to transform its business model early enough. When it did, it found a fundamentally altered competitive landscape where the platform model had destroyed the traditional retail one. Firms like Blockbuster failed to face up to the enormity of the change and altered their business model on the fringes (e.g. selling second-hand products), rather than coming up with an innovative offering. It is shocking that the board and executive management failed to make bold choices.”
“When will we ever learn? When will we ever learn?”
