The Disruptive Power of Innovation: The End of HMV, Woolworths and Jessops is only the beginning.

hIn November 1942 Winston Churchill warned “This is not the end, it is not even the beginning of the end, but it is perhaps the end of the beginning.”

The bankruptcy of Woolworths, Jessops and the likely fate of HMV are also early milestones of a disruptive journey that the internet – and its innovative progeny such as Amazon – will have on the high street.

Whilst the recession certainly helped accelerate the demise of these high street names, it wasn’t the cause or the reason. The disruptive power of on-line companies like Amazon will continue to decimate the high street and force a complete rethink of our town centres.

First it’s important to look at innovation not from a product perspective, but from a market perspective; real innovation is about creating a new market, redefining a market or disrupting an existing one.

For example, the apple iPod redefined the market for mp3 players, the iPad created a new market for tablets and iTunes disrupted the existing market for purchasing music.

Amazon and others are creating their own wave of disruption. The power of Amazon isn’t simply about a web front end on a retail operation, but through redefining and enhancing the shopping experience.  The net effect of this kind of market disruption will be felt on the high street for many years to come. Indeed it won’t just be shops that face an uncertain future but any transactional or referral based organisation.

Whilst banks try and redefine themselves, they just store your money. Given on-line banking and cash machines, it’s really hard to justify a physical presence and their decline will continue. Many years ago you would visit the bank manager and they would make a judgement about a loan or overdraft based on their knowledge of you, your history and character. Today the Bank Computer makes the decision and the bank manager simply provides the smile or sympathy depending on what decision the computer makes.

Here I also humbly disagree with Richard Branson’s post describing why he wants to make his bank more personal with sofa’s and wifi. Book shops took a similar approach by installing sofa’s and café’s and whilst it may slow the decline, it won’t prevent it.

Other high street transactional businesses such as Estate Agents and Recruitment Agencies will also move to the internet or be destroyed by it. In a sense this is neither good nor bad, but simply the result of consumers voting with their mouse and not their feet.

The challenge will be for town councils to re-invent the town centre away from transactional sites and into social areas that provide interactions and activities that can’t be achieved virtually.

One thing is for sure, this wave of disruption is only just beginning. 

UPDATES

17/01/2013:  BLOCKBUSTER goes into administration. 

Advertisements
This entry was posted in Change, Growth, Innovation, Marketing, strategy and tagged , , , , , . Bookmark the permalink.

One Response to The Disruptive Power of Innovation: The End of HMV, Woolworths and Jessops is only the beginning.

  1. Analysis from PwC and the Local Data Company revealed that chains shut an average of 20 shops a day last year – http://www.bbc.co.uk/news/business-21611772

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s