Sunday, January 28, 2007

[retail jungle] one false step and you’re gone

Surely with a touch of sour grapes, Marshall Lester, a Gap director from the 1980s recently said, "Gap has gone from being a destination store that everyone wants to shop at to being a store that no one cares about."

But the slow demise of Gap, the global retailer of ‘modish nonchalance’, mirrors the turning of the tide for other giants as well.

No one is suggesting McDonald’s is in any kind of trouble but the 2002 watershed and the rethinking of future strategy shows that no giant is immune from a change of fortune and in K Mart’s case, the demise was spectacular.

The Sony/Nintendo story is a case in point. Choosing the wrong video variant, Beta, Sony recovered, then came the copy protection scandal and then the battery problem. There’s something not right at that company.

Apple were down and out before ipod but even now, things are changing and the iphone may be needed to keep the ipod afloat. One company I see in real trouble is Microsoft, as more and more abandon it for a decent provider and a reaction of disgust really seems to be setting in with not only geek operators.

Marks and Sparks are a good case study. With a strong menswear division, it failed to read the signs and lost market share, then threw ideas at buyers which failed to enthuse. Perhaps it's found its lifeline in online sales.

It’s a gossamer thread which suspends a company at the top of the tree and one or two decisions can create a K Mart type over-reaction which will kill it more quickly than anyone could have anticipated.

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