Does Your Business Suffer From the Department Store Effect?

Note: The following article has nothing to do with department stores, but very much with the future of your business, regardless of the industry.

The other day, I stumbled across a nice statistic that clearly shows how the retail market has changed in recent years: fewer and fewer people go to department stores anymore.

This is nothing new. We have known about this trend for years. But here is my point: how many department stores have managed to profitably implement their mission (creating shopping experiences) in other ways? You know the answer: none or hardly any.

The astonishing thing is that every business school and dozens of manager books teach that we have to constantly question our business model in order to remain successful tomorrow. What drove big money into the company’s pockets yesterday may be irrelevant tomorrow. So why don’t the management teams of many companies put this simple insight into practice?

Here are three reasons for sticking with old models—and ideas about what you absolutely must do to prevent the risk of decline:

1. Old successes. Old successes are the biggest enemy of new successes. This logic takes place deep in our subconscious and has enabled us to survive for millions of years. Avoid it by checking off old successes. Every day, the quest for new successes begins.
2. Old Teams. I’m not referring to age but to mental immobility. Mentally old people have little willingness to tackle new things and leave the old behind. Everyone can change that for themselves. As a leader, you must constantly ensure that you get “fresh blood” into your team.
3. Old markets. It may sound surprising, but if you serve the same customers and market segments over and over again for years or decades, you will become rigid and immobile. Make it your duty to approach new segments every year with fresh offers and solutions.

Of course, we can only scratch the surface here. If you want to take a closer look at the strategies for future success, simply set up a short session here.