‘Sears, the store that changed America, declares bankruptcy.’ Just another headline. Just another day in retail.
Except it’s not just another headline. Sears not only represented America, it helped define it. As CNN wrote, “Sears changed how Americans shopped and lived.” And now it has plummeted into the mire and deep uncertainty of bankruptcy, awash in a tsunami of debt that washed over it on Monday when it could not meet a US$134 million debt payment.
The company, plaintively almost painfully, pledged that it will stay in business, keeping profitable stores open, as well as the Sears and Kmart websites.
Ah… websites. Welcome to the age of the omnipresent e-commerce giants, the Black Swan of 21st century retail that, like all Black Swans, no-one saw coming out of the darkness and into the bright, blinking daylight of a reimagined shopping age. The ferocity and fleetness of foot of that competition, led of course by Amazon, allied to some serious self-inflicted wounds, ultimately did for Sears.
As CNN pointed out, Sears was once the USA’s largest retailer and its largest employer. “In its heyday, it was both the Walmart and Amazon of its time.” Today the only link that can be drawn with those giants is that Sears is the victim of both. Walmart has smashed Sears for years on price and merchandise selection. Amazon plundered the ailing giant with a combination of price, range, fulfilment and convenience all tied to its brilliance embracing (and part-creation) of a new digital age which Sears had been far to slow in a) identifying and b) reacting to. A very large rabbit caught in very bright headlights.
Are there lessons for travel retail in all this? Well of course. But they’re hardly new ones. After all, the channel is (or was) another traditional bricks and mortar (yes, I know, an ugh phrase but necessary here) channel.
But while our sector is full of Chicken Little pundits and consultants who constantly proclaim that the sky is falling, it isn’t. It never has. Travel retail has numerous inherent advantages over the US domestic market over which Sears reigned so powerfully for so long, not least a POTENTIAL customer base that is virtually guaranteed to rise continuously long into the future.
My rather clumsy capitalisation of potential, though, underlines the perennial challenge of this sector. Traffic (or at least most of it) does not equate (certainly not automatically) to shoppers. To avoid the fate of Sears and countless other local market retailers, travel retail must of course embrace the digital age with a fervour but equally or even more importantly it must reinforce the very real, physical, human, exclusive advantages it has over the e-commerce barbarians at the gate. In a single word, travel retail must remain… relevant.
At its best, the channel offers a beguiling cocktail of taste and touch, human interaction, smiles, experience, convenience, exclusivity, personalisation, localisation, authenticity (critical – the sector makes abysmal mileage out of the fact that it ONLY sells genuine goods). At its best, travel retail brings digital engagement with travellers to a compelling level, offering a fusion of the digital and human with an extraordinary reach. At its best, travel retail can become an extraordinarily powerful omni-channel in its own right.
At its best, then, travel retail will surely avoid the fate of Sears. But it will need to be at its best. Black swans like nothing better than a diet of mediocrity.