2009 – adapt or die
To paraphrase Edmund Blackadder, 2009 is likely to be stickiest year for business since sticky the stick insect got stuck on a sticky bun. If you’re a retailer, you don’t need reminding of the high street massacre occurring right now. But why are so many well-known brands hitting the wall at once?
There’s no doubt the cost of operating a business has increased substantially in the past 18 months. But companies have faced difficult trading conditions before, so what’s changed? Perhaps one factor (but obviously not the only one) is that this is the first downturn to strike during the age of the internet.
Traditional business models no longer apply when consumers have the choice offered by a global marketplace. Woolworths is the prime example of this; a national chain that paid crippling rents for prime retail sites, without quite knowing anymore who it was it was selling to.
Just 10 years ago Woolworths sold 50% of all music in the UK and effectively determined the price and course of popular music in this country. In the age of the internet, the same music can be bought online in physical form or downloaded, at a fraction of the price, without squeezing past pushchairs and elderly ladies perusing dishcloths.
Obviously supermarkets had a significant impact as their product lines extended into clothing and entertainment, but then in doing so, they also embraced the online consumer. It’s near impossible to do a weekly shop at Tesco without stumbling into staff collecting and sorting their own shopping lists; Tesco recognised early on how the internet would change trends in customer spending, and pioneered home delivery for online orders.
The marketplace is changing beyond recognition, and as Woolworths discovered to their cost, you must adapt or die. You may not trade in physical goods, but every company needs to consider how and why their marketplace has is continuing to evolve. Why would a person trust eBay or Play.com over Zavvi? Is it more convenient to buy books from Amazon or Waterstones?
A 60 year-old who needs a plumber might still reach for the phone book; their children will Google. That’s not to suggest traditional media is dead. Of course it’s not, because it’s still consumed by the majority of the population. That said, the Journal is experimenting to make their content more relevant to readers, just as ITV have invested in local online channels. You too need to consider how to embrace the internet in a meaningful and effective way.
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Tags: e-commerce, internet, media, new media