North East Connected

Why are some businesses more resistant to change than others and what can you do to stay relevant?

In the past decade we have seen the closure of many famous high-street brands following the recession and changes in consumer trends. But why did their competitors not fail too? Together with Impact International, experts in change management, we look at how some businesses make themselves resistant to change.

Woolworths and Wilko

Woolworths opened its doors in 1879 in New York and was renowned for selling products at a low 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.

Their inventory was no longer unique and they sold lots of the same thing (40 types of pencil cases at one point). 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?

Instead of falling short to the recession, the company capitalised off it by recognising people’s interest in DIY instead of paying a contractor and offering low prices. 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

Comets was another high street name that resulted in closure. Once they’d gone out of business in 2012, their reasons for closure became more clear. 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.

Opposing this story is Maplin, who have consistently been ahead of the game. 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

BHS announced its closure in 2016 following its 88-year presence in the UK. 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.

Marks and Spencer on the other hand have continued to stay on trend and monitor 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.

What should business owners do?

So, as a business owner, what can you do to avoid your business following the route of a failed high-street corporation? Here are a few tips:

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