You need to visit Bend, Ore.
Momentous shifts in history are often memorialized in museums, on battlefields, or inscribed on historical markers along the road. For every epic triumph or success, there is usually a corresponding tragic defeat or humbled also-ran. Often, for astute students of history, more can be learned from the tragedies than from the triumphs.
Bend is famously the location of the last remaining Blockbuster video rental store. In its heyday, Blockbuster had more than 9,000 locations around the world. It was, without a doubt, the behemoth of at-home entertainment and pundits predicted that Blockbuster would put movie theaters out of business.
However, the Blockbuster of old is the posterchild for what happens when your industry is disrupted and you don't adapt accordingly. Blockbuster's dominant position was initially assaulted by Netflix providing DVDs through the mail (remember those?) and then by online companies such as cable providers, Hulu and Netflix (again) offering movies on demand.
No longer did you have to wait for your favorite movie to be shown at a set time on a TV channel or rummage through the leftover video tapes and DVDs at your local rental store — not to mention having the joy of rushing to return them to avoid late charges.
The stories of Blockbuster, Kodak (camera film), Nokia and Blackberry (flip phones and communication devices), and MapQuest (personalized maps) are the punchline of often-told case studies. Looking back, we can see where these companies missed their opportunities or made the wrong strategic decision. But hindsight is 20/20. It is much more difficult to recognize these changes in real time.
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But what if there was something even more insidious than these examples? All of the companies mentioned above were left behind because of a change in technology that was either counter to their established business models or they felt it was just a "flash in the pan" that would never last. We can mark the day that Netflix opened for business and when the first smartphone was introduced. What about the disruption that is never announced?
Let's consider the furniture industry — I know, this is a bit off tangent, but stay with me. The manufacturers and sellers of old-style furniture, the kind you hand down from generation to generation (or at least give to your kids for their first apartment or house) are having a hard time.
As reported in The Hustle, Hooker Furnishing, a manufacturer that sells furniture to Wayfair, Macy's and others, reported that its second-quarter 2023 revenues fell by 36 percent. Luxury furniture brand Restoration Hardware saw a 19 percent sales drop in Q2. And Noble House Home Furnishings, which supplies furniture to Amazon and Target, recently filed for bankruptcy.
These changes are not the result of a change in technology. They happened because customer demand and spending habits changed. Several things are in play here. Inflation has had an impact. As fine furniture becomes more expensive, first-home buyers are feeling the pinch between interest rate increases and the reactivated burden of student loan debt. Rising house prices and rents also mean that people are living longer with their parents. All of these things make sense and are the obvious impacts of the current economic condition.
But it is not all about the money. According to a survey done by Architectural Digest in June 2023, 39 percent of Generation Z and millennials are planning on moving in 2023 and most only expect to be in a place for two years. Because of the frequency of their moves, these people travel light. Whereas buying a bedroom set was once considered an investment in heirloom furniture, this group either rents their furniture or buys inexpensive pieces from retailers such as Ikea and disposes of them when they leave. The demand for cheap, disposable furniture puts pressure on manufacturers to lower costs, which leads to less durable furniture, which leads to it being left on the curb when the moving van leaves.
I don't know if this is going to be a long-term trend or not, but if you are the maker of fine solid pine furniture, you would not have seen the "aha" moment when things started to change. You would have noticed a gradual decline in sales, which might ultimately lead to financial straits — and becoming the Idanäs (a model of table available at Ikea) on the side of the road.
So, how does this relate to your convenience store? Both of these examples apply to your business. You are going to see when the Blockbuster-style technology shift happens. In fact, you are already seeing it. Electric vehicles (EVs) are here, and their use will continue to grow and have an impact on your business, especially if you sell fuel. It won't happen overnight. Netflix started in 1997 and Blockbuster didn't declare bankruptcy until 2010.
The good news is that you have time to change and adapt your business. The Vision Group Network has put out three Vision Reports talking about the business case around EV charging. To be successful, you need to have a charging program that is fair to you, an equipment provider that will reliably maintain the chargers, and a store offer that will attract customers so that they will spend time and money in your store while they charge their vehicle.
But beware, the furniture example is much more difficult to detect. In order to stay ahead of changes, you need to observe your customers, your community and your competitors very closely and react to changes in human behavior, not technology changes.
Let's start with your customers: What are they buying? How often are they buying it? What do they ask for? And what products complement those items?
For example, if your customers are buying prepackaged sandwiches on a regular basis, should you be offering prepackaged salads or pasta dishes, or even start an in-house made-to-order sandwich program? The same with coffee purchases. Are you offering flavors? Should you put in a cappuccino machine or a bean-to-cup program that makes a fresh cup each time? Or should you go out on a limb and put in a Boba Tea offer before one pops up across the road?
Watch closely how your community is evolving. Are your regular customers having kids or becoming empty nesters? Are more people moving into the neighborhood and do they have different ethnic or cultural tastes? Are there more people in your area that have special needs or are housebound who would benefit from a home delivery service? Your customer base is always changing and you need to be aware of it.
Targeted ads and social media influencers can change your customers' buying habits without you being aware of it. We are no longer influenced by the same TV shows, radio stations or magazines. You have to be aware of what your customers want.
Finally, watch what other businesses in your area are doing. Keep in mind that your competition is not just the convenience store across the street, but your local grocery store, drugstore, coffee shop and bakery, as well as online platforms such as Uber Eats, DoorDash and Instacart.
Visit your physical competitors at least once a month to see what they are selling and promoting — they may be seeing things that you've missed. Check the online platforms once a week to see what specials they are promoting, what type of food or product they are spotlighting, and follow your competitors' Instagram accounts. A good idea not copied is a good idea wasted.
Change happens, but don't be left behind. You don't have to be that lonely Idanäs*. Skål!
*Idanäs is a model of table available at Ikea.