Don't Forget to Check the Rearview Mirror
By David Dorf on Jul 20, 2011
Over at AppsLab, Jake is reminiscing about retailers gone by the wayside and it got me thinking a bit. Arguably Tower Records was killed by Apple, Blockbuster was killed by Netflix, Borders was killed by Amazon, and Circuit City was killed by Best Buy. (I guess its never that simple, but at least we can say there was a clear winner and loser in each of these battles.)
But here's another way to look at it: Tower Records was killed by MP3s. Blockbuster was killed by streaming video. Borders was killed by e-readers. (Okay, Circuit City doesn't really fit this motif. They went down due to a whole host of issues, none of which were really technology based.) These companies saw the writing on the wall and tried to save themselves, but they just didn't move fast enough. Blockbuster knew it needed to offer DVDs by mail, kiosks, and streaming but it was too slow to market. Toward the end its offerings were at least as good as Netflix, but the customers had already left. Borders offered the Kobo (anagram for "book") e-reader via a partnership, but it was long after the Kindle and Nook had established themselves.
So I think there are a few lessons to take away from the Borders liquidation.
- No business model is sacred. What works today is no guarantee for the future.
- Timing is everything. Established businesses are best at being fast-followers (with emphasis on fast).
- What sounds impossible today may not be in a couple years, so don't dismiss it offhand.
Retailers need to be looking in their rear-view mirrors not only at their competitors, but also at alternative technologies that might sneak up on them. (Yes Gamestop you're on top today, but platforms like Steam and Microsoft Live are sneaking up on you!) I'm sorry to see Borders close its doors, but I'm excited by the e-reader technology and the pace at which other innovations are coming to market.