Today's consumers get exactly what they want, exactly when they want it.
Loyalty is all but dead because demanding consumers, powered by the internet and enabled by mobile devices, can always find... or should I say are continuously offered... the best offer at the best price. Today Blacks learned that lesson the hard way.
Consumers have immediate, detailed access to the best offers in the market. Consequently, innovators and startups with new products and new ideas are stealing customers and winning business.
What it means for established businesses (especially retailers like Blacks) is that they need to not only keep up with product development and new market offerings, they need to jump ahead and anticipate consumer needs before someone else does. In short, they need to give their consumers a reason to stay. They need to create that thing that no one else has.
To their credit, Blacks invested heavily 13 months ago in a rich rebranding effort that included a revamped logo, website, mobile app and store design. The problem, though, is that none of those things are unique. None of them would create any loyalty, which Blacks so desperately needed. The offer that came closest to something valuable enough to create loyalty was the mobile app, that allowed for prints and other photography-based products (like calendars) to be ordered and delivered. I'm sure you know where this is going...consumers already had apps just like that! What's worse is the length of time it took for the rebranding to fully reach the market. The refreshed store design didn't even happen in most stores before today's announcement.
The stark reality for Blacks is that they failed to create any compelling reason for today's high-maintenance consumers to stay.
So they left.
LESSON FOR MARKETERS:
This is perhaps the simplest, but yet most difficult, challenge for marketers. Create an offer than is unique enough and compelling enough to convince current customers to stay and prospective customers to switch. Much easier said than done, but if you can pull it off, prosperity awaits. Think iPod, RedBull, GoPro, Sharpie and Groupon.
What do you think happened to Blacks?
Target suffered the same fate for basically the same reason. Read about that here.
For obvious reasons, the internet is abuzz with opinions and theories about the reasons for Target's demise in Canada. This article lists some of the most common theories, including poor inventory management, the effect of the exchange rate and social-media-enabled consumer complaints. Those are all valid and reasonable speculations. But the reason is far simpler:
There was no reason to shop there.
Target entered Canada two years ago, but they offered Canadians nothing they didn't already have. Whatever success Target enjoys in the U.S. is based primarily on it's aggressive pricing. But in Canada, the proliferation of Walmart stores (391 locations, compared to Target's 133) offers us access to all the $6 t-shirts and $10 watches we can handle. Canadians that already shop at Walmart have absolutely no reason to shop at Target instead.
In the U.S., interestingly, Target and Walmart opened their first stores in the same year - 1962. That allowed Target to create, over time, a loyal customer base that keeps it running. Walmart entered Canada 19 years before Target. That head start allowed them to fully establish a leadership position in the category - an insurmountable lead in customer loyalty that Target was unable to overcome. Especially with nothing unique to offer!
LESSON FOR MARKETERS AND BUSINESS OWNERS:
This unfortunate turn of events is more evidence to suggest that for any business considering entry into an existing industry, success or failure is based on your ability to demonstrate some form of remarkable differentiator compelling enough to convince consumers to stop shopping where they are used to shopping and start shopping with you.
A daunting task indeed.
Why do you think Target failed?
This blog is written by Glenn Cressman, Share Of Marketing's founder and Chief Share Builder (bio). It covers all things marketing. Feel free to comment!