It was beyond depressing to walk into the Carolina Place Mall in my new home town area of Charlotte, NC. The gutted Macy’s store was 36 hours from closing and the remnants and overall look of this once heralded American retailing giant reminded me of a store after a riot. It is only made more somber knowing that Sears and JC Penney are weeks behind. These are the anchor stores that hold together the retail real estate market. Perhaps you can, but I cannot, see any enterprise in the immediate future that can fill the cavernous spaces they will leave.
I’m not worried about the loss of the retail sales to Macy’s manufacturers. Macy’s will be replaced by other outlets such as big box stores, outlet centers, online retailers, direct sales by manufacturers, etc. The retail giants are not without guilt in getting to this place. However, the external forces affecting their continued prosperity created an uncontrollable wave of existential threats nearly impossible to circumnavigate. These outside factors are called “disruptors” in the marketplace.
Thousands of distributors are currently positioned as a Macy’s. A source of supply with a variety of products/departments such as sportswear, electronics, kitchen gadgets, luggage, stationery, etc. This positioning is online, in literature, and in their positioning as “product malls,” “logo malls,” merchandise vendors, etc. I correlate this to being a Macy’s because, like Macy’s, I can get quality service and a pretty good price from an ad specialty distributor. I get a knowledgeable sales associate to guide me through my purchase as a Macy’s floor person would. I can get a satisfaction guarantee and I can have a reasonable chance to return my order for virtually any reason, right or wrong. I have purchased furniture at Macy’s. I liked their price and service for mattresses, carpets and more. So along with Macy’s goes their furniture department.
Is there a lesson to be learned from Macy’s? Can this be your business, too?
Let’s look at this against another furniture seller: the interior designer or decorator. Whether he or she works from a catalog or represents us to a local furniture outlet, it does not matter where the sofa comes from, but that the sofa is filling a need. The overall designer/decorator market has had healthy growth and recovery curve since the crash of 2008, while the troubled waters were deepening for Macy’s each successive year. The value added from a decorator or designer positions them not as a simple reseller, but as a source for more than product. You can’t buy “taste” or experience on the internet. Perhaps when Watson is an adult, that axiom will change, but for now these intangible personal assets are the consultant’s competitive advantage.
Why has the financial advising industry exploded in the face of an internet world where I can buy shares of any public company with a click of the mouse? I can easily gain the knowledge and confidence from an endless stream of information about the company on the web. Perhaps because people value the knowledge, experience and wisdom of brokers and planners.
You must see the warning signs all around you. I didn’t. I was the first to bring music into this industry. I was the first to introduce the cassette in the 1980s and then the CD in the ’90s. Where are they now? I was able to anticipate pending change early on, but then change took such exponential leaps by 2000, it was happening overnight.
“Disruption” is what happens when someone does something clever that makes you or your company look obsolete. “Dislocation" is when the whole environment is being altered so quickly the everyone starts to feel they can’t keep up.” Tom Friedman – Thanks for Being Late.
Within 24 months from 2006 – 2008, with the advent of the iPhone and the world of apps, my business was forever disrupted and dislocated. Music changed in delivery, storage changed and what I brought to market continued to sell, but with an ever-descending sales curve. While I responded with change, music on MP3 players, downloads, USBs, etc., I have been trying to play catch up since then. I did not see it coming. My best years were 2000-2004. Then the world shattered.
Now is the time to work on your position in the marketplace. Now is the time to take action, make a plan and execute it. I have preached this for years, but it seems to be more urgent than ever.
As Ralph Lauren pulls up stakes on Fifth Avenue in Manhattan and others like Kenneth Cole, Juicy Couture and H&M flee as well, does this not confirm a trend?
As I see it, it is time to get out of the furniture business in the mind of your clients and affirm your position as an interior designer, interior decorator, advisor, consultant. Value added first, merchandise second.
I am enjoying seeing the recently developed theme “Promotional Products Work.” This applies to any and every seller of a mug, pen, hat, shirt, etc. Given that they do work, is that all a buyer needs to know? If so, then they need only look for price and delivery. But, that’s not all… we should be touting that promotional products work, and we know how to work them. Yes, we know how to work them bringing your expertise and unique capabilities into play… capabilities vital to success that you cannot find on the internet.
Joel D. Schaffer, MAS is CEO and Founder of Soundline, LLC, the pioneering supplier to the promotional products industry of audio products. Joel has 48 years of promotional product industry experience and proudly heralds "I was a distributor." He has been on the advisory panel of the business and marketing department of St. John’s University in New York and is frequent speaker at Rutgers Graduate School of Business. He is an industry Advocate and has appeared before the American Bankers Association, American Marketing Association, National Premium Sales Executives, American Booksellers Association and several other major groups. He has been a management consultant to organizations such as The College Board and helped many suppliers enter this industry. He is a frequent contributor to PPB and Counselor Magazines. He has facilitated over 200 classes sharing his industry knowledge nationwide. He is known for his cutting humor and enthusiasm in presenting provocative and motivating programs. He is the only person to have received both the Marvin Spike Industry Lifetime Achievement Award (2002) and PPAI’s Distinguished Service Award (2011). He is a past director of PPAI and has chaired several PPAI committees and task forces. He is a past Chair of the SAAGNY Foundation, Past President of SAAGNY and a SAAGNY Hall of Fame member. He was cited by ASI as one of the 50 most influential people in the industry.