Stephens - The retail revival: reimagining business for the new age of consumerism

Copyright 2013 Doug Stephens

Published by John Wiley & Sons Canada, Ltd.

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Library and Archives Canada Cataloguing in Publication

Stephens, Doug

The retail revival : reimagining business in the new age of consumerism / Doug Stephens.

Includes index.

Issued also in electronic format.

ISBN 978-1-118-48967-3

1. Consumer behavior. 2. Consumption (Economics). 3. Retail trade. I. Title.

HF5415.32.S74 2013 658.8'342 C2013-900341-X

ISBN 978-1-118-48979-6 (ebk); 978-1-118-48978-9 (ebk); 978-1-118-48980-2 (ebk)

Production Credits

Managing Editor: Alison Maclean

Executive Editor: Don Loney

Production Editor: Pauline Ricablanca

Cover Design: Adrian So

Cover Photography: Adriana Berned/iStockphoto; pictafolio/iStockphoto

Composition: Thomson Digital

For Meredith, Connor and Reilly

Acknowledgments

The Following People were invaluable in supporting the creation of this work:

Andy Bruce for the coffee and collaboration. Mike Wittenstein for his time and expertise. Eric Garland for his intellectual generosity and humor.

And above all, my dad, for encouraging me to think big.

Introduction: Revolutions and Revivals

If You Earn Your Living in the retail industryand you may not want to hear thisthe possibility that the business you're in will still exist in two, five or ten years is very slim. Sorry for the buzzkill, but it's true. In fact, this book may have been more appropriately titled Surviving in the new age of consumerism.

If all this sounds overly dramatic, consider some of the brands that (even as I write this) are under deathwatch. By the time you read this, some of these may be gone:

The Mayan calendar aside, the notion that many of these brands could be facing their end, as I write this in 2012, would have seemed beyond credibility only a short time ago. While they're all very differently positioned brands that sell across a range of categories, they also have one thing in common: they each missed or ignored at least one universe-shaping shift in their market, and never quite recovered from it. For some, the decline has been slow, painful and drawn out. American Airlines, for example, has taken losses of more than $10 billion in the last decade. For others, the descent has been swift. Research In Motion, which was being heralded by Forbes in 2009 as the fastest growing company in the world, has seen its stock in free fall.

What's also worth noting is that the changes these brands failed to adapt to were most often neither subtle nor sudden. They didn't strike like lightning from a clear blue sky. In fact, most were more like slow-motion train wrecks. Avon, for example, missed multiple long-term societal shifts, each of which should have prompted a comprehensive reevaluation of its business model. And Avon wasn't alone. The Sears decline continues to be protracted and painful to watch. Trend after trend sails past, leaving the company in their wake, but, for whatever reason, Sears has failed to take actionor at least the right action to adapt and to survive. It's as if somehow it became stuck in a web of inertia, unable to free itself.

To be fair to both Avon and Sears, it's easy to lose sight of just how rapidly things change, and to suddenly find yourself years, even decades behind. Think about it. As I write this I'm 48 years old, and in my lifetime it was perfectly acceptable for doctors to endorse cigarette brands. One cigar brandCigares de Joyactually promoted itself as medicinal and claimed to provide relief from ailments like sore throat! Small-appliance manufacturer Kenwood advertised that its blender, the Kenwood Chef, did everything but cook, but hastened to remind us that's what wives are for. And plus-size fashion retailer Lane Bryant not so long ago produced advertising that referred to their target customers as Chubbies! Can you imagine trying to get away with that today? Yet these examples were regarded as perfectly permissible advertising only several short decades ago.

An example of early tobacco advertising claiming the medicinal benefits of smoking.

When I share these examples with audiences, there's almost unanimous agreement on just how completely things have changed in a relatively short period of time, and no one has a problem acknowledging that exponential change has occurred. The funny thing is, when I shift the conversation to the future of retail and consumer behavior, and begin to describe some of the significant changes I see on the horizoneven over a short five to ten years henceI almost always encounter naysayers who are reluctant to buy into the idea that radical change might be around the corner. They find it difficult to imagine that things they do today might become as out of place as doctors hawking cigarettes.

It seems we humans are far more reluctant to accept change when it lies ahead of us than when it's safely in the rearview mirror. And while a healthy dose of skepticism helps us avoid being suckered and taken advantage of, taken to an extreme, habitual skepticism can be lethal. It can interfere with judgment, cause paralysis and ultimately lead an organization to ruin. There is no shortage of examples. Industries filled with brilliant executives have crumbled because of a failure to properly acknowledge the magnitude of the impact that specific changes would have on companies. From the music industry to the video store channel, the business landscape is littered with headstones that read, We doubted it!