Retailer Shuts Shop – Why Retailers Fail


I was sad to read a story in my local newspaper, North Shore Times about a Glenfield hardware store McPherson’s Hammer Hardware, which is going to close in a couple of months. Firstly I as going to share a link with you, but the aforementioned newspaper has a system that requires you sign up to their digital version if you want to share a story, and likewise, probably if you want to read from a link. I do not provide links for my readers to sites like that.

I used to live in Glenfield and visit this story and I remember asking them how they stay in business. The owner, John MacPherson told me it was about community, having those little things that the big stores make you buy in bulk, advice on how to do things, friendly service, remembering people’s names, the little things that come with community retail.

The newspaper story goes on to quote that he has probably hasn’t been making a profit for 6-7 years, but hung in there. He points out that the DIY super-stores and Internet have changed the game and that even the major stores/chains suffer from sluggish consumer spending.

He’s not wrong, but the key word is change. I love the world of retail, I used to have the privilege go to the NRF in New York and FMI Connect in Chicago and bring back ideas to write about in retail magazines, share with my resellers and speak about at conferences around the world. This was important because many of our retailers couldn’t afford to go to those conferences, but learning new ideas, particularly from people who have proven experience, is how business evolves.

It doesn’t really matter what business you are in, you have to evolve to meet the demands and opportunities presented as society evolves. As John said in the North Shore Times article, “In Glenfield we had a haberdashery (incorrectly spelled in the newspaper, I had to look it up to find out what it was), greengrocer, butcher, it was a great mix”. It went on to say they were boom times.

So here’s the thing, it is still boom times for those businesses that want to keep up with the times. The problem that retailers used to tell me was that they didn’t have time to keep up with the times. They were too busy starting early in the morning cleaning the shop, doing stock takes, placing and chasing orders, talking to merchandising reps, ringing customers to say their widget had arrived, preparing the float and a myriad of other things. In hindsight, those retailers, from John McPherson’s Hammer Hardware in Glenfield, through to Borders and other retailers should have found the time to look at how some businesses were thriving, while others weren’t.

When they went on their holidays, they could have combined them with visits to businesses and conferences that showed how some retailers were managing in the new world of mobile and tablet, of connected customers. They could have seen new products that aren’t available in NZ, they could have combined bricks and mortar with online themselves. I appreciate how hard it is to run a business, I have run several businesses over the years and worked in companies from small to multinational and the common thread is that those who looked ahead continue to do well, those who looked to their original training and just repeated what they had learned, which may have been best practice in the 70’s or whenever, will have done well for a while, but aren’t there any more.

People still want to have experiential retail, they still want to see and touch, ask questions, they even want to see people like John McPherson stick around and stay in business, but they can’t advise him on what to do to stay in business and get back into the black.It’s tough, but the time to get ahead in business is when you are ahead and you have the resources to go and do some training, bring in a consultant, go attend a conference. I used to speak regularly at retail conferences in New Zealand and what was really frustrating was that the people attending were those that needed it the least, because they were looking ahead and staying up with the times. The ones that needed it the most didn’t go, probably didn’t read the specialist trade magazines, ask their suppliers for knowledge or go to the trade shows. They were too busy. Now they are either out of business or heading out. Is it too late, not necessarily, but it will be much harder, even to change the mindset. When things get tough, many go even farther back into doing what they used to do, even doing it harder. That’s not the answer.

Back when business was booming for people like John McPherson, Bob Dylan was singing The Times They are a Changing. He was so right. “You better start swimming or you’ll sink like a stone.” Listen to the lyrics, they are prophetic. But this is no different to 200 year ago. The times are always changing.

We are still buying all the things we used to buy and more. Some business models have been and gone, but others are growing in a big way. We are still a DIY country, that’s why we have the mega stores, but there is still room for specialists, room to be a community and have community involvement in business, there are so many opportunities. Whether it is classes at the back of the store teaching people how to do things, or a new section selling 3D printers and teaching kids how to make things, using location based mobile services to find people who are looking for what you have, supplementing your business by selling items you can’t afford to stock, online.

I’ll finish with a question. Why is it that I can buy a set of my favorite guitar strings online from a retailer in the USA, 75% cheaper than the same product in New Zealand? The local retailer will say that’s because the guy in the USA doesn’t have a shop to run. But the fact is they do, Elderly Instruments has a bricks and mortar store in Lansing, Michigan, they have bands playing in it, they have workshops for musicians, they just supplement that with online sales. I recently contacted them because I couldn’t get help from local retailers to fix a broken part on my Dobro. I had personal emails, just the same service that John provides in his hardware store and I’ve managed to repair it myself with the parts they sold me. Doing business with them was so easy. If I lived in Michigan, I would go and by from their store and I’d even be prepared to pay a little more, heck I’d buy more anyway just because I like doing business with them and they like what they do and know what they are talking about.

So I’ll finish on a saying that is one that has killed many a good retail business. “If it ain’t broke, don’t fix it.” Have a look around you right now and ask yourself how many of the things you take for granted would be there if everyone had said that back in 1970, let alone 1870?

The Decline of the Radio Station


Auckland got a new radio station yesterday Big FM. I was interested to see how they will position themselves as unique, because in my humble opinion there is not much difference from one radio station to the next. My first impression was a cross between classic hits and classic rock, but I’ll have to let them grow for a while to find out what their identity actually is. The problem for me and for them is that I no longer listen to much radio.

In New Zealand we really struggle for variety. Pretty much everything is mainstream and the reason for that is that we have a small population, only a little over 3 million people over the age of 18 and a total of only 4 million. There is no venue for special interest music such as jazz, blues, country, world and alt on our airways. Cool Blue Radio was around fora while which had a mix of jazz, blues and country and no DJ’s, but this now only exists on the net, where it competes with every other radio station around.

Radio in some ways mirrors the ails of the recording industry. It does very little that is new and doesn’t even use much of today’s modern technology. Everything is mainstream, there are no thought leaders, visionaries or radicals any more. Back in the day we had pirate radio stations like Hauraki, Veronica and Radio North Sea which captured the rebel in us, played great music but also challenged the norms of society. The problem is that today everyone is PC, the challengers of the past are the conservatives of today.

There are lots of things that radio stations could do. Yes, some are showing webcams of the studio, most have streaming radio on the net and some go further with things like background or in depth coverage of news stories, but that is about as far as it goes.

In New Zealand there are less than a handful of radio stations that effectively use the RDS band. RDS is the text area on your radio, especially in your call that provides information such as the station identifier. In Auckland only Radio ZM uses this to tell you the artist and name of the song. Some stations like George FM have info about the DJ’s, a song or text in promotion, but that’s about it. I was dissapointed to see that the new Big FM doesn’t do anything more than the station identifier. There is so much that they could be doing to be more modern and in tune with the world.

A while ago I wrote about new technologies coming to your car including Satellite and HD Radio. Recent news is that there are (as usual) battles over which sort of satellite radio system to use and as to HD Radio, which is being test broadcast at the moment, and the concensus in the industry is that it will be a long time before these technologies become commonplace. I also wrote about the fact that record companies have been ripping us off for years and not giving us value for money which started as a post about Ringo Starr’s innovation with the Live 8 Flash Card.

A few weeks ago I was approached to do a radio diary. You know the survey diaries they use to show marketshare of the radio stations by demographics and total listeners. I couldn’t do it because these days I hardly ever listen to the radio. I listen to podcasts all the time. Some of them do come from radio stations, but not local ones. I listen to Digital Planet from the BBC, The Music Show from ABC National Radio in Australia, Radio Free Amsterdam and the list goes on. As well as feeling like I have a relationship with the DJ, they use new technology, they are almost advertising free. On my Ipod I see images, have links to artist information and other enhanced services to go with these programs as well as in some cases also video.

A key thing with podcasting is that I can listen to pretty much anything I want. Every kind of music is available for free. Many people don’t realise the range of podcasts that are available and think they have to buy music if they want to use iTunes, but the reality is that if you have an eclectic taste, or just feel like listening to a particular genre right now, that you can do it. In the past I would have the radio on all day when I was at home. Today I rarely even listen to my CD’s, even though I keep buying them:).

We have lots of great artists coming to New Zealand for concerts this summer and I am trying to work out which ones I will stretch my budget to see. In the past I would listen to their promotions on the radio. Now I can go to YouTube and listen to dozens of tracks from all of these artists, including lots of live show clips so I can see if they actually put on a show which is worth spending hundreds of dollars on.

Even if I don’t watch the video clips I can effectively listen to anything I like and I have struggled to come up with any songs or artists I can’t find on Youtube, including myself. If I want to explore a theme, like Christmas, or pretty much anything, or listen to artists similar to a band I like, I can go to Ilike and have my very own personalised radio show, where I can rate the songs I listen to and it becomes more and more the station that plays ecactly what I want to listen to. If you want to hear other artists that sound like me you can go to Ilike and key in Luigi Cappel and you will hear at least one of my songs and then other artists of a similar ilk.

So if you are program director for a radio station, what are you going to do to compete with the Internet? How are you going to get me back to listening to the radio, so that you can sell advertising and put bread on the table? I have to tell you, you are doing a pretty poor job right now, The way you do things right now might do ok for breakfast radio, maybe drivetime (with real time traffic) and talkback, but beyond that, you are competing with products that are far better targetted and if you don’tdo something about it, you may have to look for a new job. If we do get Satellite Radio sorted (and the shelves of retailers in the USA are littered with receivers) consumers are going to have an international choice. They can find the stations that they relate to and I suspect that the percentage of people listening to local radio will rapidly diminish unless you wake up now. Don’t be like the record companies, hide your head in the sand and wake up one day wondering what happened!

While this blog is starting to get a good following, I would love to get more readers and encouraging me to keep writing. If you feel that my blog is interesting I would be very grateful if you would vote for me in the category of best blog at the NetGuide Web Awards. Note that the form starts each site with www whereas my blog doesn’t and is of course https://luigicappel.wordpress.com.

Thanks so much for your support:)