Given that much of this issue focuses on brands, I thought it would be appropriate to look at some brands outside the flooring arena—only unlike the many monikers covered in this issue, these may soon go the way of the dinosaur. A brief look into their plights may serve as a reminder of what can lead to failure for both retailers and manufacturers.
1. Reader’s Digest was once the most widely read magazine in the world. Last August, its U.S. operations went into Chapter 11 to decrease debt. It emerged in February with cuts in frequency and circulation guarantees for advertisers. It would have been unthinkable just a few years ago that a magazine as old and famous as Reader’s Digest would be shuttered. Lesson learned: Longevity is not a free pass from extinction.
2. Blockbuster was the leader in the video rental business for nearly two decades. But its revenue continues to plummet as firms such as NetFlix siphon off its revenue. Blockbuster’s model of renting movies through physical locations has been destroyed by video on demand, DVDs via mail and dispensing machines. Lesson learned: Adapt to change and respond to consumers’ purchasing preferences (shopping online and at home), or you eventually become irrelevant.
3. Dollar Thrifty, the car rental company, is for sale. A decade ago, the rental industry was able to support six independent brands. A significant drop in business and leisure travel has resulted in consolidation. Lesson learned: You must convey your points of differentiation, particularly in challenging times. Many areas can no longer support the number of flooring retailers it once did.
4. T-Mobile is the No. 4 cellular company in the U.S. It not only competes with three larger companies, it has yet to begin to offer 4G service to compete with Verizon, Sprint and AT&T. The problem is there are no super-fast broadband networks likely to be finished before its three rivals offer the service. As it now stands, T-Mobile has no future in the U.S. Lesson learned: You can’t allow your competitors to get the jump on you in any facet of the business—technology, product, etc.
5. Moody’s Corp. may have the name with the largest negative brand equity in the U.S. Scandals about its rating of mortgage-backed securities and allegations the firm compromised the ratings process to get business have ruined the company’s image. Moody’s is more than 100 years old, but everything it built over those years is irretrievably lost. Lesson learned: Your reputation is your most important asset.
The point of all this? Your brand is your most important asset. You must nourish and protect it so that it will stand out and make your business flourish at all times.