Amazon has been one of the stratospheric success stories of the last century, never mind decade. Can you believe it only started in 1993? But with every revolution there are casualties. And last week in the UK we saw one of these, with the electronics retail chain, Comet, going into administration.
As any marketing analyst would ask, the critical question that Comet should have been asking was ‘what was its purpose?’.
1. Comet’s competitive pressures
For some years now it has been quicker, easier and cheaper to buy electronic and white goods online.
Why would you go to a high street store where you have to drive, pay petrol, find a parking space and pay a parking fee (and maybe a parking fine)? And then lug it home, rather than have it delivered to your door.
Like Clinton Cards and JJB Sports, these shops had not found their niche and purpose in this new world. Against this, compare WH Smith which Kate Swann – our advisory board member- has turned around by focusing on the customer.
She said: “At the strategic level, we face competition from supermarkets, the internet and specialist retailers. The threat of the supermarkets’ move into non-food is clearly real. However, in many of our categories, there are high-street specialists succeeding. The lesson is that success is driven by creating a strong customer offer.”
2. Service driven culture for businesses
What should Comet have done? And all the other high street stores struggling behind Comet?
People do still go into towns – it seems as much to meet each other for a coffee than to shop, but that is the opportunity for stores. They have to entice those coffee drinkers into their shops while passing. And then get them to spend.
How often do you hear retailers complain that customers go to their shops to research, try out and find the best product. Then go home and buy it more cheaply on the internet. Instead of complaining, what could they have done to make that shopping experience so fantastic that you don’t mind spending a bit more to buy it on the spot?
When did you last buy a laptop or game console? Unless you are a techy, it is a pretty painful experience for most people.
Why didn’t Comet turn this to their advantage? Have sofas – and coffee! – and people who could talk English? Learn from B&Q who have employed older people with practical skills such as decorating and gardening and can talk knowledgeably to customers about their needs and their products.
Who wouldn’t have liked to have their laptop set up for them at home or even in store, as part of the price?
3. The future of shopping
I did a Radio Leeds interview about Comet and took part in a phone-in. Interestingly one caller pointed out that ten years ago, Comet had been responsible for killing off the many independent electronics retailers up and down the country – now they were getting a taste of their own medicine.
No doubt our business and management students would have many other such examples.
So we have to accept that change is inevitable – but how do we spot the new opportunities? Mary Portas has already started looking at this for the UK government and yes, she is talking about service, being niche, making shopping fun – and make parking free.
What is going to be the winning strategy for the future? Are there models for the UK to learn from around the world? What would you do for our high streets?