Amazon Didn’t Kill Retail Brands

January 30, 2017By Paige Rolfe
 

 

Major legacy retail brands have recently announced they’d be closing a significant number of stores.

K-Mart’s news included closures of 109 K-Mart and 41 Sears locations, while Macy’s will be shutting down 68 of its 100 spots.

While media and industry are quick to credit Amazon, and e-commerce as a whole, for the above, such an idea is a bit curious -- if not contradictory.  

If traditional “brick-and-mortar” retail has no opportunity or future, why would Amazon, along with many other “web” retail brands, be opening offline stores?

In reality, it isn’t e-commerce -- or even Amazon -- that’s causing turmoil in the retail category. Online shopping will turn an estimated 23 years old this year. Most retailers have long adapted both digitally and competitively long before today. Certainly, far many more have than not.

Aside from a few early casualties, a lot more retail brands have benefitted from online shopping and the Internet than not.

It isn’t to say that technology and a lack of utilizing it well hasn’t hurt stores like Macy’s, Sears, and K-Mart.

But a far larger issue -- and one that could have been prevented -- set the course for failure among Macy’s, K-Mart and Sears long before today. It had little to do with Amazon or the Internet.

They Neglected The Customer Experience 

In their respective heyday, K-Mart, Sears and Macy’s wielded great power among consumers. Though they were vastly different stores targeting three very different types of shoppers, all were top sources. Over time, each began slowly chipping away at the customer experience -- cutting back store service and sales staff, failing to merchandise and maintain store quality at their locations.

What was once a quality shopping environment became a disorderly, neglected mess with products stuffed onto shelves and strewn about aisles. It’s not a surprise that these brands lost favor with shoppers.

While retailers can offer cheap products, and even a barebones shopping environment, they must never, ever neglect the customer experience. This holds true for both online and offline retail brands.

They Neglected The Product 

Consumers are not surprised to find lower quality in the discount and low-price retail brands they frequent. But that doesn’t change that they still seek value.

At some point, merchandise at Macy’s, Sears, and K-Mart became lower and lower quality, and selections became increasingly poor. Instead of seeing value in what each offered, consumers began to recognize that entering any of the three stores would likely mean junk.

Many product and service brands want to increase profits, and try to cut corners with product as a result. Avoid this. K-Mart is proof that consumers will not flock to low prices if perceived product quality for the price/value is not in operation.

They Neglected The Market Position 

It’s easy to think that brands lose their market position due to other brands. This certainly can be a factor, but it’s usually not the only factor that drives demise.

Far more damaging is neglecting a brand’s market position -- the unique place it holds among competitors in consumer’s hearts, minds, and wallets. This often happens during -- or after -- excessive market and/or product expansion. Brands rush to open shops, yet aren’t able to maintain their stores, quality of service and support.

It means nothing to have a million touch points in the world if you can’t effectively and efficiently manage them well. Macy’s, K-Mart and Sears are a great example.

They Could Have Saved Themselves 

While Macy’s was losing recognition and reputation for women’s fashion and beauty, its men’s fashion and home store were still considered popular. Few retailers emphasize on men’s fashion. It’s home store was a go-to for attractive, quality home items (such as bedding).

It’s hard to know why Macy’s created this imbalance in its offering. But, it could have tried scaling back by either eliminating or paring down its clothing and beauty merchandise and just focus on Macy’s Home Store and built the brand back out that way.

Sears had a similar opportunity. While their clothing department slowly became obsolete, Sears was a go-to for DIY home repair, paint and even had an auto center. Sears missed their opportunity to reposition as a competitor to Lowe's.

Kmart neglected itself -- and its customers. Therefore stores like Walmart and Target became the preferred choice among consumers.

All three companies are an example of the importance of protecting your brand.

All Retailers Can Make These Mistakes - Including Amazon

What’s important to understand is that online retailers -- including Amazon -- are not exempt of these fatal mistakes above. All retail brands regardless of age, stage or size can fall prey at any time.

In fact, if one looked closely enough they’d see that even Amazon is currently making quite a few of these mistakes. It may not be affecting Amazon’s position and business today, and may not even tomorrow. But that’s the thing about a brand’s demise -- it happens little by little, with every corner cut, and every compromise. It’s a slow, long process, not a short one. Often, brands barely notice until they’ve got a problem.

It’s also worth noting that just because Amazon is a retailer that is successful doesn’t mean it competes with every retail brand in the market. Amazon is a fine company, but it’s not everything to every consumer, and never will be no matter what it does. It’s also not the real cause or reason that retail brands fail.

 

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