I recently read an interesting article about book stores. The very first sentence of the article stated:
‘Independent bookshops need to make readers feel special in order to compete in the internet age, say book trade experts’
You would find it hard to disagree with the statement. The number of Bookstores physically present on UK high streets have fallen to less than 1000 in 2014 – down over a third in the last ten years. The number of printed books sold in the UK last year dropped almost 10%. During the same period, sales of ‘ebooks’ rose 134%. You can read the article in full here.
The online revolution has hit the book selling industry harder than many others. Large and small retailers alike have disappeared without a trace. In 2009 one of the most prominent collapses in the industry came with the demise of Borders. The chain of bookstores that was originally part of the US parent group had been struggling for a while. Recognising the impact of online competition, Borders had started to try and change their proposition from being one of just bookselling. By the time they announced their ‘administration’, typical Borders stores contained both a Paperchase stationery and Starbucks café concession. In addition, some branches also contained a RED5 gadget concession and GAME video games concession.
Borders were trying to offer their customers more than just the product. Borders were trying to offer a more varied customer experience. On this occasion it did not work – the question is why? The book selling business has always been a hugely competitive one, even before the existence of Amazon. Operating a bookstore is challenging because of the need to maintain and manage large stocks of physical inventory, tough suppliers and the seasonal nature of demand for books, which peaks during the year-end holidays. Additionally, Borders attempts to adapt to the online phenomenon were limited .
In other words, Borders reacted to the challenge of Amazon far too late. Their attempt to integrate other ‘services’ to adapt the experience for customers was very well intentioned, but not enough to overcome the financial challenges already besetting the group. There are similarities with HMV’s failure to respond to the challenge of Apple’s iTunes – again, by the time they did, it was too late.
In 2014, bookstores need to demonstrate that they offer something more than books. If you want a book to read, the easiest and often cheapest way to access one is via a Kindle. For bookstores to still have a place in the lives of consumers, they need to offer an experience – a compelling customer experience that goes beyond just offering a book to read. Jasper Sutcliffe, head of buying at Foyles, was recently quoted as saying that bookshops “just can’t be a book shop any more”. “They need to offer so much more – the bespoke service that booksellers give, the events, the signings, the added value – and we look to publishers to help.”
The book selling industry is not the only one that needs to adapt to the rapidly changing world we live in. Another is the complex market that is Pharmaceuticals. For the last fifty years and more, the Pharmaceutical industry has been remarkably successful. Whilst it has done a huge amount for mankind, it has also benefitted from producing lifesaving medicines that have generated billions and billions of dollars of revenue and profit. To a degree, it has been so easy for the industry to make money, it has almost simply ‘fallen from the sky’.
In 2014 the world for pharmaceutical companies looks very different. The exclusivity that many of their products have benefitted from is expiring. Competition has grown exponentially. Generic products are rife. Differentiation is now a real and genuine challenge. The pharmaceutical industry can no longer rely just on the product alone – one company’s product is now largely the same as another. To survive, Pharmaceutical companies are actually going to have to work to earn their money . They are going to have to evolve their proposition to encompass the customer experience – not just the product. To convince a physician to prescribe their drug, a pharmaceutical company is going to have to work harder to demonstrate value than they ever have done before.
In the world we now live in, few companies can survive on the strength of their product alone. Product centric organisations are becoming fewer in number. To survive in our increasingly customer/consumer driven world, it is vital that all organisations understand the importance and necessity of evolving to becoming customer centric. If a book store simply tries to sell books, it will fail. If a pharmaceutical company just tries to sell a drug, it will struggle. To find, win and keep customers in 2014, all organisations need to demonstrate that they offer and deliver a compelling, consistent and differentiated customer experience.
The article was first posted on https://ijgolding.com/ in August 2014.