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05.12.2010

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Bad Economy or Bad Retail?

Lessons from Amazon, Kohl's and Whole Foods

Even in a recession, companies like Amazon, Whole Foods, Boston Beer and Jet Blue have innovatively taken fringe propositions into the mainstream and flourished while counterpart legacy brands have fallen on hard times. Our advice to struggling retailers and brands?: Don't take the easy way out picking on the economy as your source of problems. Become active agents of cultural change by focusing on customer relationships and what shoppers want.

In the following two white papers we contrast the practices of profitable retailers like Amazon, Kohl's and Whole Foods with legacy counterparts (Part 2), and in an earlier paper examine the brand malaise surrounding brands like Budweiser, US Airways and Blockbuster (Part I). In both papers we offer innovation opportunities for legacy brands to remain relevant, in good times and bad.

Bad Economy or Bad Brand:
Lessons from Amazon, Kohl’s and Whole Foods

Despite an economic downturn, retailers like Amazon, Whole Foods, and Kohl's have managed to succeed. What qualities might such retailers share? You guessed it: Innovative thinking coupled with an ability to truly turn on a dime when it comes to building relationships with constantly changing shoppers. For these innovative retailers, such qualities have enabled them to not only grow profitably, but prosper, even in a recesion and despite being overshadowed by legacy competition that often dwarfs them in terms of revenues and market share. Legacy retailers like Sears and A&P, are often quick to point to the economy as the source of flatlining sales, yet as we describe here, many aging retailers are out of step with shoppers today, and instead of blaming the economy should be looking to shoppers—and what used to be called "niche competition"—for inspiration.

Download Bad Economy or Bad Retail?»

Bad Economy or Bad Brand:
Lessons from Budweiser, US Airways and Blockbuster

If you missed it the previous week, Bad Economy or Bad Brand outlines reasons why Samuel Adams, Jet Blue and Netflix are succeeding, despite the shadow cast over them by enormous competitors like Budweiser, US Airways and Blockbuster. This piece compares and contrasts qualities of "upstarts" like Samuel Adams to brands like Budweiser and describes how changing consumer tastes have driven success, even in the midst of a recession. Bad Economy Bad Brand offers insights on how legacy brands today might broadly benefit by examining the fringes of changing consumer tastes to truly understand where current and future opportunities lie.

Download Bad Economy or Bad Brands?»

Comment »

...Struggling brands and retailers are often overshadowed by fresh upstarts or, as Disney’s CEO put it recently, by legacy brands that are able to “balance innovation with heritage."

How can retailers do better? At a fundamental level, we must move from a mindset focused on just “retail” to talking more about “shopping” because that is what consumers are engaged in.