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Why Businesses Need To Be Able To Adapt To New Markets

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It is becoming a common thing in the news that another well-known brand has closed its doors on the high street. The rapidly changing market means that if you aren’t with the times then you will be left in the past. Here we explore some of the big brands that have had to close their doors and the potential reasons behind why they had to close.

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M&S And BHS

After operating for 88 years, BHS closed its doors in 2016. Similar to the other failed brands, this was down to its inability to remain on-trend. Although it tried to incorporate some of its names from its Arcadia owner, it was never enough to keep people coming back. Although the company had a strong reputation for homeware in the 1980s, it tried to specialize in too many areas by including fashion and food in its stores. As a result, it didn’t sell anything that was unique to BHS as a brand or that was well-priced, so ultimately, its customers shopped elsewhere.

On the other hand, Marks and Spencer have been enjoying many years of success through better customer understanding and change management. For example, in recent years, many people are going to the shop after work to buy something to eat for that night instead of doing one big shop. In response to this, M&S announced that it would launch ‘food only’ stores which would act as small supermarkets for consumers. It also capitalized on the trend of quick and easy meals at home but added a twist of luxury to them with the Dine In campaigns. The brand constantly adapts its range to accommodate for different seasonal events too, such as Mother’s Day and Valentine’s Day.

 

Maplin And Comet

We’ve also seen the demise of Comet in the past decade. Once it had gone out of business in 2012, its reasons for closure became clearer. It didn’t address the change in consumer behavior — customers were starting to come in store to look and feel items and then going away to purchase online. There were also a lot of purchases of electrical items made straight from the retailer, such as Apple and Amazon, and this had negative effects on Comet. Instead of embracing the fact that it could offer better customer service than an online shopping experience, it let its customers walk away.

A company that operates in a similar industry, Maplin, has followed a very different path — one of success. It was established in 1972, and from day one as a mail-order company, it offered its customers unbeatable service through first-class delivery. Following the rise of internet usage, it established an e-commerce presence, too. Maplin created a very smart supply chain through ‘dropshipping’. This is where Maplin listed products on its website that it wasn’t held in a warehouse. Instead, when a customer ordered a product, it was then ordered from Maplin’s suppliers and sent straight to the customer. The staff in-store are well trained too. As a result of its success, it announced that its like-for-like sales were up 4.4% in the six weeks to December 24 in 2016.

 

Woolworth’s And Wilko

Woolworths began in 1879 in New York before coming over to Liverpool in 1909. It captured consumers by offering a wide range of products at a low price. Within 100 years, the corporation had nearly 500 stores in Britain. However, changes in retail occurred and supermarkets were developing so that they sold much more than just food — threatening the profits of Woolworths.

After some time, Woolworth’s inventory was no longer unique or popular — at one point, it sold 40 types of pencil cases. It eventually closed in 2008, and amongst an already high unemployment rate, Woolworths put 30,000 more people out of a job. But why didn’t similar company Wilko (Wilkinson) follow the same route?

Wilko was able to capitalize on the recession. It recognized that more people were doing DIY because of a lack of funds and it adapted its offering accordingly. The second thing lies with its ability to recognize the need for a rebrand. In 2014, the company took steps to rebrand itself from Wilkinson to Wilko and launched its first-ever national TV ad campaign. It recognized the need for e-commerce, and launched an online service alongside click and collect. As well as partnering with suitable, household brands it created its own label, which has been a success.

 

What Tips Can You Follow?

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Don’t let your business fail in the same way as Woolworths and BHS, there are some tips you can follow:

  • Rebrand when you think it is necessary – Although it may be a risk, if you are seeing losses, it could save your company. Many agencies are experienced in rebrands and attracting a whole new target market.
  • Keeping on top of recent trends — It may seem obvious, but many business owners simply sit back and watch as consumer trends change, as they think their successful brand will remain the same. However, by monitoring what your consumers are doing, you can keep ahead of the game.
  • Ensuring you have high-quality customer service — Although the internet can offer convenience, it cannot offer the customer service that your business might be able to provide. Make sure that customers can contact you with ease and you are specialized in your area.
  • Sensible stock management — Make sure that you are stocking what you need and nothing more, if demand begins to fall you may be left with unsellable stock that will negatively affect your cash flow.
  • Reassess your product line — Is it unique? If customers can purchase your products elsewhere for a lower price, it is highly likely that they will. Evaluate the profitability of your products regularly to ensure they are still able to generate revenue.

The effect of online advertising is fast becoming the biggest moneymaker for companies, regardless of whether they offer e-commerce services or not, therefore it should come as no surprise that year on year businesses are investing more in the market.

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Anushka Jain
the authorAnushka Jain