Over the past decade, many well-known businesses have closed their doors in the midst of economic downturn and changes in consumer trends. But how come their competitors didn’t fail too? Together with Impact International, experts in change management, we look at how some businesses make themselves resistant to change.
Woolworths and Wilko
In 1879, Woolworth began business and became popular for selling products at a reasonable price. When it came over to Liverpool, UK in 1909 consumers were astounded at how much they could get for such a low price. Within 100 years, the corporation had nearly 500 stores in Britain. However, changes in retail occurred and supermarkets were developing so that they sold much more than just food – threatening the profits of Woolworths.
However, after time their inventory was not as controlled or unique — at one point, 40 type of pencil cases were on the shelves. They eventually closed in 2008, and amongst an already high unemployment rate, Woolworths put 30,000 more people out of a job. But why didn’t similar company Wilko (Wilkinson) follow the same route?
Wilko was able to recognise the change in customer needs. The company saw people’s interest in DIY rise as they begrudged paying a contractor and offered suitable equipment to meet their needs. The second thing lies with their ability to recognise the need for a rebrand. In 2014, the company took steps to rebrand themselves from Wilkinson to Wilko and launched their first-ever national TV ad campaign. They recognised the need for e-commerce and launched an online service alongside click and collect. As well as partnering with suitable, household brands they created their own label which has been a success.
Comet and Maplin
Comet was another company that failed in the past decade. Once they’d gone out of business in 2012, their reasons for closure became clearer. They didn’t address the change in consumer’s behaviours – customers were starting to come in store to look and feel items and then going away to purchase online. There were also a lot of purchases of electrical items made straight from the retailer, such as Apple and Amazon, and this had negative effects on Comet. Instead of embracing the fact that they could offer better customer service than an online shopping experience, they let their customers walk away.
Following a different business pathway was Maplin. They became established in 1972 and from day one, as a mail order company, offered their customers unbeatable service through first class delivery. Following the rise of internet usage, they established an e-commerce presence too. They created themselves a very smart supply chain through ‘dropshipping’. This is where Maplin listed products on their website that they weren’t holding in a warehouse – instead, when a customer ordered a product, it was then ordered from Maplin’s suppliers and sent straight to the customer. The staff in their stores are well trained too, as a result of their successes they announced that their like-for-like sales were up 4.4% in the 6 weeks to December 24 in 2016.
BHS and Marks and Spencer
After a long-lived 88 years in business, BHS announced its closure in 2016. Similar to the other failed brands, this was down to its inability to remain on trend. Although it tried to incorporate some of its names from its Arcadia owner, they were never enough to keep people coming back. Although the company had a strong reputation for homeware in the 1980s, they tried to specialise in too many areas by including fashion and food in their stores. As a result, they didn’t sell anything that was unique to BHS as a brand or that was well-priced, so ultimately their customers shopped elsewhere.
Despite operating a similar business, Marks and Spencer have managed to see many years of success. They have stayed on trend and monitored their consumers’ behaviour to inform their next steps. For example, in recent years many people are going to the shop after work to buy something to eat for that night instead of doing one big shop. In response to this, M &S announced that they would launch ‘food only’ stores which would act as small supermarkets for consumers. They also capitalised on the trend of quick and easy meals at home but added a twist of luxury to them with the Dine In campaigns. They constantly adapt their range to accommodate for different seasonal events too such as Mother’s Day and Valentine’s Day.
How to become resistant to change
There are some actions you can take to prevent your business closing its doors before its time.
- Rebrand when you think it is necessary – Although it may be a risk, if you are seeing losses it could be what might save your company. Many agencies are experienced in rebrands and attracting a whole new target market.
- Keeping on top of recent trends – It may seem obvious, but many business owners simply sit back and watch as consumer trends change, as they think their successful brand will remain the same. However, by monitoring what your consumers are doing, you can keep ahead of the game.
- Ensuring you have high-quality customer service – Although the internet can offer convenience, it cannot offer the customer service that your business might be able to provide. Make sure that customers can contact you with ease and you are specialised in your area.
- Sensible stock management – Make sure that you are stocking what you need and nothing more, if demand begins to fall you may be left with unsellable stock that will negatively affect your cash flow.
- Reassess your product line – Is it unique? If customers can purchase your products elsewhere for a lower price, it is highly likely that they will. Evaluate the profitability of your products regularly to ensure they are still able to generate revenue.