By Francesca Firth on Fri 10 January 2014 in Topical
Over recent years we have seen a lot of prominent high street stores closing their doors.
Previously we have held consumer caution responsible for this, no one was willing to part with their cash in an economic landscape which saw unstable incomes and rising inflation. However, we have been assured that the worst is over and that consumer spending is on the rise. This means that UK businesses can breathe a sigh of relief…or does it?
Amidst the economic downturn we have seen the birth of a new period of industrial transformation- The Digital Revolution. A new, savvy generation of consumers with new expectations, increased technical proficiency and lower levels of brand loyalty is upon us and businesses who fail to adapt can expect to suffer as a consequence.
We have compiled a list of 5 well known High Street brands which have fallen victim to the changing times that all businesses can learn from in 2014.
In the early 2000s Blockbusters were given multiple opportunities to buy digital start-up company Netflix for $50 million
They underestimated the impact of digital media on their company and declined the offer. Blockbuster failed to move into a digital model and as a result Netflix became their fiercest competitor eventually forcing the multinational into administration.
The Lesson: ProspectSoft MD Andrew Ardron suggests that every company takes a serious look into whether they can afford not to move at least some of their trade online. With 7% of the nation’s GDP being spent through online channels every business needs to seriously consider a digital strategy
The modern industrial revolution is giving way to a completely new business approach. Many offices are allowing staff to adopt a more casual work attire which means for the most part a tie is no longer a staple of the business man’s uniform. The lack of demand has seen the decline of sales for Tie Rack and now the decimation of the brand.
The Lesson: Knowing your customers is vital! ProspectSoft recommends and offers the capability to monitor your products and customers allowing you to identify and adapt to emerging trends in plenty of time to react.
Unfortunately for Barratts they were put under a lot pressure from competition, with competitors like Schuh and Office fulfilling the needs of fashion conscious consumers and an abundance of retailers offering low priced shoes and accessories. Barratts struggled to find their gap in the new market place.
The Lesson: We recommend building an online eCommerce strategy starting with 3 key factors; Price, Offering and Service. One or all of these factors can be manipulated to make your offering unique and ultimately giving you a competitive advantage.
There are two main reasons for Jessops decline;
- Selling Cameras and Camera paraphernalia was a limited business model which limited their audience especially in an age of convenience shoppers who appreciate getting multiple products from one place.
- The popularity of smart phones leading to a decrease in demand for cameras
The Lesson: When moving, online businesses are given the opportunity to easily expand their product portfolios. Before starting your ecommerce strategy, we suggest investigating the routes you could take to diversify your existing product portfolio expanding your business’s potential and facilitating growth.
In a similar way to Blockbusters, HMV fell victim to the expansion of digital media, dramatically overtaking hard copy. Unlike Blockbuster, HMV did adapt to offer an online store and diversified their product portfolio. Their downfall came from their lack of dedication. By not fully committing to and embracing the digital sales model HMV allowed their competitors to overtake them.
The Lesson: The most important piece of advice we give to businesses considering eCommerce is to dive in! A strong initial commitment will give you far more stability in the long run and will better facilitate future growth. Simply testing the waters with a cheaper system that will cost you far more over time.