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Did Netflix kill Blockbuster?

Did Netflix kill Blockbuster?

or did Blockbuster forget about customers?

Did Amazon kill Sears?

or did Sears forget about customers?

One of my early business mentors told me “you have to be half the price or triple the value for someone to switch from their current provider”.  People don’t switch from Sears to Amazon for a couple of pennies… the new had to be much better than the old.

If you were competing with yourself, or competing with your business – how would you attack?  Where is that weakness?  Fix that.  Don’t wait for the customers to discover that someone else does it for half the price or triple the value…  because it will be very hard to get them back.

If you liked this post you will also like 12 Questions for Any Business and 6 Keys to Leading Positive Change in Organisations.

3 responses to “Did Netflix kill Blockbuster?”

  1. SEARS…THAN EVENTUALLY LATER ON AMAZON

    SEARS LOST IT CUSTOMER BASE BEFORE AMAZON EXISTED. WHEN AMAZON STARTED TO FORM AND DEVELOP EVENTUALLY THEY PICKED THEM UP.

    SEARS DEVALUED ITS WORKFORCE AND STOPPED THE CUSTOMER VALUE PROPOSITION

    TOP MANAGEMENT MISSED ALL OF THE MEGATRENDS SINCE THE LATE EIGHTIES
    Prior to that, losing proper vision regarding megatrends never happened. During the last century Sears forged forward monumentally because it acted in accordance with the changing business environment and capitalized on all of the major changes resulting from changing culture and increases in technology .
    Sears started as a company before the turn of the twentieth century and by the beginning of the century rose to the level of the number one retailer in the country. During the first twenty years all of its business was done through their catalogs and their primary customer base was rural America. Their typical customer was a farmer, and their merchandise was a product mix of farm equipment, home products and even livestock. They developed supply chains quickly using the rapidly developing railroad which spidered out from their base in the center of the country, Chicago. It was a new choice for rural America to the general store which could be found in every small town. Sears capitalized on the rapid development of the Railroad.

    Next the auto came along, and our new mobilized citizens moved to the cities. Sears then started building retail stores, but not next to the downtown stores, but on the outskirts of the cities. It was during this time that you could order a new house from the Sears catalog and have it delivered by boxcar to your local train station. All of the components including the bath and heating system could be included.

    Electricity was now being established and washing machines plus all other home and other electric appliances used in the farm and auto shops, along with tools
    used to repair these new innovations were sold by Sears. The first full line store was built in 1925 and soon carried all items sold anywhere. The Sears motto soon became “Sears has everything, satisfaction guaranteed or your money back”
    In addition many items such as tools were guaranteed for life. By the midcentury Sears was opening at its peak one store per week supporting every mall in America capitalizing on the massive megatrend of people moving to the suburbs and in need of shopping malls. In need of credit cards Sears had the Sears charge card which peaked at a 70 percent market share. You could also have the in-store experience of buying auto insurance, investment banking, eye care, lunch or dinner, a new home or an existing home, any installed home improvement, a new engine for your car, a new car or new tires and an oil change or diamonds for your wife. If something needed repair the largest appliance service department in the world. All of the megatrends were actually helped along by Sears, as they moved ahead, initiating the best training programs for their employees along with a full retirement package including health and profit sharing which was the best in any industry. In addition all of their sources were in the USA, and many were Sears owned. For example, Desoto chemical was the number one paint manufacture of house paint in the world and served the Sears 60 % market share. This was a Sears’ owned company, and their employees were also in the Sears Profit Sharing program. After 20 years an employee could buy one share of Sears’ stock and Sears would give you three more. By one and have four.

    During the eighty’s Sears partnered with IBM and sold ‘Prodigy’ which was the first internet type platform based on the phone adaption to E mail.
    This all started to change during the nineties when new management changed the culture of Sears. They lowered costs by discontinuing the catalog on its hundred-year birthday in 1993. The cost cutting was because of the expenses of producing and mailing the catalog. Sears had built the largest consumer base in the history of commerce along with many innovations in operations. During this time they had a relationship with IBM, and a joint venture with them could have cut all catalog costs as it went to a web site powered by IBM and sears. At that time distribution could have used some existing Sears’ channels augmented by the USPS, which would have facilitated Sears, its number one customer during the last century. Sears at this time was its own google and had all of its upper
    management staff connected to its own internet in 1988 with at home terminals and a sears version of AT.

    All changed when a Hedge Fund took control in 2005 and began to dismantle the very soul of Sears. The attempted catalog shift to a digital format was now impossible since it was gone at this time. Capital investments for a continuing high level customer experience was nonexistent. Last, was the merger with K MART which was on its last legs and during the good years was at its best only a c-student, now a worn-out shoe in need of cash!

    During this time Amazon filled the need of current megatrends along with others. The soul of Sears is gone and slowly being forgotten. However the principles which drove the people of Sears to excellence are deeply imbedded in its history and lie just under the surface of megatrend waves to be adopted.

  2. (I meant Jeff…:-)

  3. Hi Conor!: I was reading about retention and loyalty these days and it is said it’s much cheaper to invest in customer retention than acquisition, but many companies, even knowing it, still find it very hard to do so.
    The exercise of meeting the customer’s needs while adopting cutting edge technology and practices to deliver top services require tons of adaptability and daring.
    And there is also this time of transition between technologies that make companies think there will be market for everybody, -I’m thinking about Kodak- although often new customers, the interesting ones, do not need the “old way of doing”, and, at the same time, by doing
    the old way, companies do not meet the needs of even the more classic customers either because something smells old…
    This post brought to my mind your video on John Bezzos’ amount of time that leaders must spend in the present versus designing the future. Challenging!.

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