Over the last decade or two, we have heard how retail is dying because of pressure from companies like Amazon and the internet.
Sure, there is intense pressure, things are changing and certain retailers are folding, but others are rapidly growing. Retail is not dying, but it is changing.
The retail industry is changing. That means retailers must be part of this change. This is not the first time this has happened. It always happens. Today's winning retailers must lead the change wave. The choice they have is simple. They can either lead the way, or the transformation wave will pass them by and leave them behind in the dust.
Consider how cable TV is changing to pay TV
This is not just for the retail industry. It's the same in many other industries. Consider the cable television industry. The same kind of reinvention wave is sweeping over this industry as well.
Yesterday's leaders were companies like Comcast, Time Warner Cable, Charter, Cox and others. Today, cable TV is giving way to pay TV using different technologies. Today's leaders in pay TV are different. They are Comcast Xfinity, AT&T DirecTV and then Charter Spectrum.
So, TV is not dying, but it is changing from cable TV of yesterday to pay TV of tomorrow. Different companies can win and fail, changing the list of leaders. And this is happening to industry after industry.
Change wave is transforming retail
The same thing is happening in retail. New companies like Amazon and new technologies like the internet are changing the environment. Yesterday's retail landscape is fading away. However, tomorrow's retail landscape is being built today. There are big winners and losers.
There are many stores which are suffering, shrinking and even closing. That's been happening for decades. However, other stores are rapidly growing. Stores like the Apple store, AT&T store, Costco, Walmart, Starbucks and countless others. They are booming.
Others like Macy's, Sears, Kmart and many others are struggling to transform their business model. The old model is fading away. If they don't update the way they think, the way they present themselves in the marketplace, the way they interact with customers, they will never be a leader in years to come. Some will even fail.
Retail winners and losers
So, the question is this: Can a company change and adapt and continue to lead? If it cannot change, it cannot lead going forward. It's that simple. Yet, not every company or every executive understands this. Or if they understand it, they don't change enough and they fail.
With that said, there are many retailers who are doing a great job transforming their company and even their industry. Every industry changes. That means every company must change.
The difference between companies that successful transform and change themselves in a changing industry, and those who fail, is the strategy. Some executives have ideas that successfully transform their business. Other executives don't.
Change is uncomfortable. It pushes us out of our comfort zone. Companies that don't change, fade away. Remember Woolworth? Herman's World of Sporting Goods? Circuit City, CompUSA, Radio Shack and so many more.
Companies have been missing the change wave for many decades. Those that miss this transformation wave, simply fade away. However, other companies take their place. Other companies grow and become leaders in the space. So, the need doesn't change. But the players change. Some stay on the growth wave. Others rise and fall.
We've seen this in other industries as well. In the 1990s, Motorola was number one in wireless handsets with the StarTac. Then they missed the shift from analog to digital and Nokia and Blackberry took the leadership position for the next decade. Motorola had one more hit with the Razr, but that rode the success wave up and down again.
Next, 10 years ago Apple iPhone and Google Android entered the smartphone space sending Motorola, Nokia and Blackberry to the bottom. This happens in industry after industry.
Retail is not dying, but it is changing
So, retail is not dying. It is changing. Sharp retailers need to change to stay successful. They need to lead the change wave. We never really know what's coming next until it happens. That change started in someone's mind. That idea grew and competitors responded.
Before long, this new way created by the change wave becomes the rule. Whether you are an investor, worker or executive in the retail environment, you need to take a clear view of where your company stands.
Is your company on the growth side of the growth wave? If not, then it's on the declining side. Knowing the difference is key for their success and your success going forward.
Source: Dale Furtwengler.