“Change before you have to.”
Jack Welch (1935- ) Businessman
A wise friend of mine told me once that all good things last two years. It sounds a bit cynical, but I think what he meant was that there is a life cycle to all things including products, jobs, companies, and ideas. Implied in his message was to not rest on your laurels or revel in your past glories too long, since change may be just around the corner.
Tower Records, my favorite bricks and mortar music retailer, just fell victim to a shift in the marketplace. It was announced today that they have been acquired by the Great American Group, which intends to liquidate the giant music retailer. 2700 jobs will be eliminated and so will be a nearly 40-year legacy.
Founder Russ Solomon was quoted six years saying, “The Internet will never take the place of stores (like Tower)”. Meanwhile, Internet retailers like Amazon.com proliferated, while Walmart slashed prices with its massive purchasing power. Small record stores closed right and left. Tower hid behind bankruptcy protection in 2004, but emerged unchanged and did not embrace the digital music revolution.
This same phenomena applies to marketing in an entrepreneurial setting. Things can change quickly, which can dramatically change the needs of your target customer and thus challenge you to quickly change your product or solution. My experience is that these changes generally come with warning signs or cues (as is the case with Tower Records), which will allow you time to adjust. Your intimacy with your niche will provide you a competitive advantage, but it will be up to you to positively greet the changes rather than sticking to your existing methods or designs. And that can be hard to do.
And it is not just Tower Records that has resisted this major shift to digital music downloads with MP3 formats. For decades, the music industry has fought tooth and nail to protect their intellectual property on records, then on tapes, then on CDs, and now digitized on the iPod. Over the last five years, the music industry has been forced to change their entire business model to accommodate the changing needs of their customer.
In this case, technology was the driver of the change with the new affordable MP3 format which allowed digital music to be downloaded legally (or otherwise) to a low-cost portable MP3 player. The technology allowed customers to get exactly what they wanted, which was the ability to listen to the individual songs from their own customized, portable music players.
While the court battles raged between the giant music companies and the technology makers, the customers voted their preference for the MP3 format. Case closed. For some in the music business, this has allowed new packaging and marketing opportunities. iTunes was created out of nowhere and the customer got what they wanted.
The lesson is simple. Don’t fight battles which cannot be won. Instead, use the market shifts to your advantage and be a player in the new game.
Good-bye to Tower Records.
John Bradley Jackson
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