Retailomania blog posted a presentation that predicts major upheaval in retail over the next decade. Just as many great old financial names disappeared in 2008, Magnus Ohlsson, founder of MORM, predicts many venerable retail names are about to go the way of Abercrombie and Fitch . . . before it came back as a used clothing store for kids.
Here are three critical points that apply to every business in every sector;
1. You don’t know who you competitors are. That’s because consumer behavior is replacing entire sectors. Newspapers and magazines have lost their relevance and their clout. Big box technology stores are disappearing. Email is where information goes to die. One-third of homes have eliminated their land line phones. Workers us Yammer to collaborate, which is why no one shows up at your meetings.
2. Size is no longer an advantage. Sure, size can sustain operations and give you a lot of places to cut, but it won’t build your future. As switching costs drop or go away, companies and people can afford to try tiny apps instead of massive systems. They can always go back. Security and quality mean “easily repaired or replaced,” not “never has a problem.”
3. Online and Social changes the consumer decision process. And there have never been so many channels of communication. Whether you’re customer is a shopper in a store, the CIO of General Motors, or the procurement group of a mid-size company, their decision processes are affected by Facebook, Twitter, texts, and Yelp. People expect important, relevant information to meet them in their context, not yours. If you make them come to your site or find your email, you might as well kiss them goodbye.
As recently as 2008, I told consumer loyalty clients that their competitors are not just the companies in their line, but Harry Potter and American Idol. That’s still true (if you update the references to The Avengers and Mad Men), but now people live differently. We expect everything important to come to our smart phones at precisely the right time and in the format we demand.
That’s asking a lot of large companies, which is why tiny start-ups pose threats never before imagined.
In short, your competition is not the other companies you go head to head with. Just as a golfer’s real opponents are the course and himself, your real competitors are the way you’re used to doing things and the the things you’re used to doing.