A retailer can take a nosedive for any number of reasons. The cause could be siloed corporate structure, poor data quality, lack of coordination, overall negligence, poor change management. It’s not necessary here to go through the full list of mistakes made by, say, Sears in recent years—once a retail company starts down the path to bankruptcy it becomes difficult to parse cause from effect anyway, as a whorl of frantic activity yields up the corporate death rattle. I want to go back before all that goes down. I want to start back when the leadership still believed everything was just fine.
The doomed future of some of the major retailers we lost this past year was not hard for some of us to spot beforehand. There were even lists back in 2017 that prophesied the things to come, and they were mostly accurate. So the question becomes, if there were signs, why wasn’t a critical correction made? The answer is that major failures are usually a product of engrained practices imbued into the company culture. If the error is part of a wider philosophy, it’s not likely leadership will be open enough or even able to change it.
After many years of watching otherwise successful companies make entirely unnecessary but fatal errors in judgment, I want to offer the fastest ways to tank a retail company. Learning from the mistakes of others is a priceless, invaluable skill. So, if you’re in retail, take heed. Here are the four most effective ways to go bust.
Don’t have a compelling brand story
Story is at the heart of what you do and why you do it. Ultimately, you’re not selling a product, you’re selling a brand—an idea, a way of life, a philosophy. If you don’t know your very clear, very clever, and very compelling brand story by heart—know it deep in your bones—then you have a major problem. Good story elevates people and communicates the personal value of a brand. It should be aligned throughout the company structure and strategy, reflected in everything from packaging to press coverage to customer service. Without story, you have nowhere to go, no move to make. Whatever you sell, whatever your brand, wherever you come from, always remember that you are your brand story.
Don’t create remarkable customer experiences
We live in an era of amazing technological advancements, gizmos and gadgets that are transforming the experience of shopping. Indeed, leaps forward in AI and facial recognition are giving retail a major face lift and utterly restructuring how we experience it. Are you on board? If you’re a small retailer, that doesn’t mean that you need to pinch pennies to afford to develop a revolutionary iPhone app, but it does mean that you need to consider how customers experience your brand and how you can make that experience central to what you do. Digital platforms can help, and because it’s what customers want to see more of then than not they really should be integrated into your marketing strategy. Never forget that the customer is the hero. All else stems from this.
Don’t think through your digital advertising strategy before initiating it
On the flip side, there are those who rely too heavily on digital marketing without thinking through the repercussions of their actions. The fact is that people out there are tired of pop up ads, they don’t want to be followed and tracked remotely, and they don’t want to receive an email offer within minutes of visiting a website. It’s just true—it’s been studied. Although digital marketing has opened up a whole new world of techniques and tactics that can be very fruitful, you should always think through the decisions you make in using them. Annoying and interrupting people comes with a huge cost. Remember that customers want an authentic shopping experience on their own terms, not yours.
Don’t have a genuine purpose—just follow what others happen to be doing
This one goes to the core of your brand, even going deeper into ideas of humanity and purpose. Who are you? What do you really believe? Why does your brand matter? A brand that hasn’t asked those questions, and hasn’t committed to the best possible answer, will eventually hit a storm of chaos it cannot beat back. Good companies with no sense of purpose may produce quality products, but they flail around in terms of their identity, trying on a variety of marketing hats without ever settling down. Down the road, they jump on a bandwagon or two, like Pepsi for instance, and experience a torrential backlash and public outcry that can be a major gut shot to their profitability. So, as the Delphic maxim says know thyself—know who you are and what you stand for, as Patagonia seems to, and limit the possibility of going astray.
Come back next week to keep reading up on the retail industry and to learn about the best and worst ads of Super Bowl LIII (enjoy the game this Sunday!). And to get started implementing a clear, aligned story with purpose that yields remarkable customer experience, check out my book, Marketing, Interrupted.