The article Retail squeeze - the middle is history in the Sydney Morning Herald raises some interesting thoughts.
It highlights the sad result of companies like Collins Booksellers that are dying because they can no longer compete on price due to (a) heavy competition from retailers who can sell cheaper, and (b) customer perception that there is no value worth paying more for.
Why are we surprised? When a company resorts to differentiation-by-discounts, it is inevitable that (a) they cheapen themselves, and (b) they will always lose to others who can sell cheaper.
The "largeness" of Borders is not the reason why it trumps Collins. It is the feelable experience that Borders offers - a comfortable library-like place to sit and read and browse. By comparison, a Collins bookstore is like a warehouse. Sure, in the short term a warehouse is cheaper to set up. But in the longer term, you die!
These businesses have dug their own graves. When the only choice is price-based, customers will choose the cheapest. When businesses are driven by numbers and not imagination, we end up with what we have today. And more such businesses will die.
The middle market is not dead. It is crying out for innovative business concepts beyond more advertising, shallow brand "redesign" exercises, and demographical abstractions. Get your head out of the (conventional business thinking) sand!
Businesses need to feel what humans want at a fundamental level. Businesses need to be real and connect with people beyond one-way advertising. Businesses need imagination and vision, and the commitment to follow through consistently. Give people something they can truly love. You can be not-the-most-expensive and enjoy the love of your customers. Look at Dell. Look at IKEA. Look at the thousands of small businesses who are doing well despite not being well knowd or desperately trying to appealing to all.
And narrow marketing may well be the way forward! Businesses often erode any chance they have of a unique position because they try to appeal to everyone. Do you go out and try to be EVERYONE’s best friend? Why try and appeal to EVERYONE and truly connect with no one? Think about it.
Got a brain? Got imagination? Got passion? DON’T have an MBA? Opportunity calls...