Retail Innovate or Die

I remember the first time we rented a movie to watch at home. Going to the video store, picking a tape putting it in to the video recorder and pressing play. It was exciting, movies I wanted to watch (or more accurately back then my parents let me watch) when I wanted to. It disrupted things.

Suddenly instead of having to go the cinema to see the latest blockbuster or wait several years for it to come to broadcast TV it could be watched at home. The established distribution model was shattered and cinemas and TV had to rethink their offerings in the video age.

Films were expensive to buy on tape and later DVD, so rental shops sprang up. Initially small independents but later one name came to dominate in the UK, Blockbuster.

Fast forwards.

It has just been announced that the last of the UK’s Blockbuster stores are to close. Effectively the end of the High Street rental era. In the age of Video on Demand and services like Netflix and iPlayer the once disruptive video rental model has itself been usurped and surpassed.

Blockbuster didn’t innovate and paid the price.

In many respects the problems of Blockbuster are the problems of all bricks and mortar retail in the digital age. UK retail over much of the last half of the 20th century was focused on low cost rather than value. Blockbuster allowed movies and games to be rented at a far lower price than the cinema could offer and disrupted the standard model. However, Blockbuster and bricks and mortar retail in general failed to recognise the potential disruption to their own business models and clung to them even when their irrelevancy was recognised.

We are now in an age of rolling, constant innovation and business must adopt and adapt to this. The UK High St is not a sacred cow and must prove its value to consumers if it is to survive and thrive in the Digital Age. To do this bricks and mortar retail must start mainstreaming digital solutions and learn how to constantly innovate. Otherwise it should keep the example of Blockbuster in mind and prepare to go the same way.

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