By Kevin Moore*

The closure of big retail brands in the UK, US and Australia is not a coincidence. But what were the themes of their demise?

We've seen a steady international stream of weak retailer closures: modern shopfronts like Australia's EzyDVD, MFI and Adams in the UK, and iconic brand closures like Waterford Wedgewood and Woolworths in the UK.

What did they all do wrong?
 

• They took on debt and didn't reach their end game
• They traded unprofitably for too long
• They re-built their balance sheet with more debt
• They stayed in one space for too long.

What could they have done?
 

• Used the original debt to launch innovative products
• Used the original debt to fund structural changes to lower cost
• Found new markets or customers
• Innovated their approach, their products and their brands

This year is a year of change in retail. Many tired retail techniques will be challenged in the quest to survive by achieving high quality, lower cost products and services.

Outsourcing of people, logistics and production will deliver newer, better technologies in both the retail and manufacturing industries.

In stores, 'retail theatre' will come to the fore and the shopping experience will be enhanced with entertaining and interactive displays to drive sales. Shopping will be reinvented as a source of entertainment and leisure, like watching movie or sports.

This is happening already in the US. Wal-Mart has invested in the shopper experience by bringing specialist in-store events teams in to create interactive opportunities for the customer, to increase shopper satisfaction, loyalty and basket.

Australia has begun to act through clever cost-cutting measures. Some retailers have installed new programs to convert currently unproductive hours directly into effective customer-facing activity.

Manufacturers too will play their part. They will work with strong retailers to build exclusive retailer brands that strengthen a retailers offering through point of difference. Ryobi power tool exclusive supply through Bunnings is an example. Nippon paints too. It makes good retailers and their aligned manufactures stronger, and forces the unaligned to seek new Blue Ocean in other retailers or channels.

Food for thought as we move into this testing year.


* Kevin Moore is CEO of Crossmark Asia Pacific.