For legacy companies facing disruption, corporate innovation won’t be enough

Today corporate innovation is all the rage. Large companies host accelerators, launch internal startups, and court potential startup partners in a quest to harness young companies’ innovativeness and energy for themselves.

But large legacy companies shouldn’t throw the baby out with the bathwater by neglecting their core business and assuming it has minimal room to grow.

In this article, I will detail how our company, Randa Accessories, grew from 25 to 50 percent market share in several categories and channels by focusing on its core business and adjacent “bridge” categories, and offer some takeaways for other businesses based on that experience. (I will also describe how Randa launched its own successful internal startups — I’m not saying corporate innovation isn’t useful, just that it needs to be one part of a broader strategy to excel.)

First, a little about Randa. You many not know our name, but you know our products. Our products are available under 50 brands, and are sold at over 20,000 points of sale, and millions of digital touch points.

We’re the world’s largest men’s accessories company. We sell ties, and belts, wallets, bags, hats, slippers and luggage.

Randa is completely vertical, business-to-business and direct-to-consumer, with 4,000 employees working from 23 global offices.

Our culture emphasized growth and efficiency and led us to success in revenue, margin, penetration, and market share.

For example, we’re the leading supplier of belts to Nordstrom… and to Walmart, to Kohl’s and to Amazon, and The Hudson’s Bay, Liverpool, Printemps, El Cortes Ingles, David Jones, John Lewis and to Costco.

We spent over $50 million to assure that when a consumer walks into a retail store for pants, they immediately see our belts nearby. Dress shirts? There are our ties…

And then, we hit a wall. 

Continue reading “For legacy companies facing disruption, corporate innovation won’t be enough”

The End of Mass Marketing: Go Small, or Go Home

Once upon a time… business success was based on providing a narrow segment of consumers with a narrow segment of products, uniquely suited to their needs, sourced and advertised locally, and sold at a local store.

Over time, the spread of mass media — TV, national newspapers and magazines — along with the expansion of national retail stores, and the growth of a global and highly efficient supply chain, led to a world of mass marketing, mass production, and massive retailers. The retail world moved from personalized products for localized, niche markets to mass-produced products for mass markets.

Mass marketers thrive on “must-have” items — huge volumes of single styles, sold across many market segments to an audience of consumers eager to have the item they saw advertised in mass media, and which, in turn are produced in great scale and efficiency.

This strategy worked. Until it didn’t.

Continue reading “The End of Mass Marketing: Go Small, or Go Home”

“Leadership is Not a Destination” – FutureCommerce Podcast

“No company can afford to stand still” – we sat down with David J. Katz – a LinkedIn Top Voice in Retail – to discuss how technology is changing consumer demands and pushing companies into creating better experiences.

Topics include: Robotics, Retail, Ecommerce, Technology, Fashion, and Jeff Goldblum.

Grab some popcorn, and a notebook.

Continue reading ““Leadership is Not a Destination” – FutureCommerce Podcast”

Disruption is Inevitable, Essential & Painful

America has too many stores, too much inventory, and too few shoppers.

Macy’s, JC Penney, Sears, J. Crew and other major retailers have already announced that they will be closing stores because in the new retail landscape they cannot justify the return on these expensive fixed assets – and because customers no longer choose to spend their money in old-model retail stores.

The market capitalization of American department stores dropped nearly $80 Billion since 1999, according to Census data.

The cost of disruption is more than store closings and diminished market caps, it’s people and jobs. Macy’s and JC Penney, alone, will be closing over 200 stores and eliminating over 12,000 jobs.

You can not shrink your way to success. However, you can buy yourself more runway. Continue reading “Disruption is Inevitable, Essential & Painful”

Man Killed By Robot: Get Used To It

Recently, a robot on an automotive assembly line killed a worker at a factory in Germany.

The man was installing the robot at a Volkswagen assembly line when the robot gripped and pressed him up against a metal plate, crushing his chest.

It’s not the first time a human has been killed by a robot. That distinction occurred 36 years ago, in 1979, when a Ford Motor Company employee was killed in a Flat Rock, Michigan, plant.

And, it will not be the last time a human is killed by a robot. Continue reading “Man Killed By Robot: Get Used To It”

Amazon & Australia: The Thunder Down Under

Geographically separated from most of the world, Australia has long retained a sense of independence and individuality. However, the rapid spread technology and ubiquity of readily-available information has made the world a much smaller place. On the Internet, Australia is one small click away from Seattle.

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At 250,000 square feet, Amazon’s first Australian distribution center is located just one hour south of Melbourne. Continue reading “Amazon & Australia: The Thunder Down Under”