In our modern age, progress is made at an alarming pace with new technology and new possibilities opening up every day. That progress in turn delivers change and change can be a wondrous thing. It can also be aggressive, ruthless and unforgiving.
Very few places see the cut-throat nature of change quite so much as the business world. Traditional tried and tested business models get thrown to the winds on a regular basis in our modern era where giant corporate behemoths can quickly succumb to nimble start ups with lower overheads and greater profit margins.
HMV marks the latest casualty of the high street as it prepares to enter administration. For many years the mega-chain has been losing market share to online retailers, unable to compete with the lower prices and wider stock selection of the likes of Amazon. It follows the fall of high street camera chain Jessops and electrical retailer Comet and slightly further back, Zavvi, the rebranded Virgin Megastore chain, also disappeared for similar reasons.
The reasons for these giants toppling are listed by commentators as a little bit of mismanagement and an awful lot of struggling against online retailers. Whilst the high street plugs away at an increasingly outmoded business model, online retailers are free to experiment with other aspects of the retail experience, with the introduction of customer provided product reviews, algorithms that can recommend related items to customers, discounts only possible due to the minimal overheads they have and pure digital-only products.
The tremendously consumer focused Amazon has even gone as far to further optimise their stock and distribution arrangements with an investment to man its warehouse by more efficient automated robotic systems, further shaving money from their costs and speeding up the time between order and delivery.
All of this points to the fact that technology will not stop and is unlikely to slow down, and with every advance comes a change in consumer behaviour. High street stores still get people through their doors for the express purposes of look at the physical products before they buy, but how long will it be before this stream of customers dries up too? How long will it be before we start getting semi-tangible holographic examples of products projected into our homes? It might seem far fetched, but with tremendous leaps forward in 3D printing technology, we might be closer to that than you expect to having physical products delivered digitally.
There is always an emergent technology on the horizon that threatens to upset everything and invalidate entire industries. The internet was pretty much the death knell of the high street travel agent, relegating these once plentiful stores to a rarity. Not every new technology takes hold and not everything transforms consumer behaviour, but as progress marches on, businesses must be on the look out for things that can stump them and shake them to their foundations.
Look upon the fall of HMV as a warning. If an enormous, much loved, well established chain of stores with very little remaining direct competition on the high street itself can falter due to progress and change, then anything can.
Keep up, or fall behind.
About the Author: Written by David Hing blog editor at YOUR Insurance, a broker specialising in public liability insurance for small businesses.