Resistance To Change At Furniture Retail
Volume 143 NO.1 January/February
Furniture World Magazine
Seldom is there just one reason that the sword of Damacles hangs heavy over the head of a furniture business owner. Frequently though, “profit parasites” that literally suck the “life blood” out of retailers are to blame.
By Ray Morefield
Frequently, the underlying reason for the existence of profit parasites is resistance to change. Industrial psychologists have suggested that resistance to change may be the biggest problem in business.
“Furniture retailers facing changes in technology, in their supply chain or in consumer behavior can make the choice to fiercely protect an existing business model.”
Today there is concern at all levels regarding the worldwide economic impact of Chinese commerce and third world imports. This concern is similar to that expressed in the early 1980s involving Japanese products. During that decade, to analyze the impact on American enterprises, Tom Peters conducted a comprehensive analysis and authored a study titled “In Search for Excellence.” 43 corporations that were leaders in their industries were identified. A year later 1/3 of these leaders were no longer in the “top spot”. As competition and the market evolved, these industry leaders, in many instances, continued to employ the same policies and practices that placed them in positions of prominence. They were reluctant to deviate from the norm. Conservative and static leadership became the order of the day.
Resistance To Change
A classic example of being resistant to change is considered by many to be IBM’s studied decision to not pursue the market potential of personal computers.
After World War II ended, this well managed, well-intentioned enterprise determined there was a market for only about 12 computers worldwide. Management, therefore, focused on mainframe computers. Not until the 1980s did they introduce their personal computer. This lost opportunity signaled the decline of many of the OEM portions of IBM’s business including the typewriter and mainframe business, and was the beginning of a long and difficult transition for this iconic company.
Let’s consider a second example. Kodak invented the digital camera in 1975, but continued to place emphasis on their film sales and processing revenues.
Polaroid held a dominant position with “instant pictures”. Today Kodak and Polaroid Corporations have dealt with financial challenges due to the broad acceptance of digital photography. Even though they were both pioneers in developing digital technology, they saw it as a threat to their core business. Today both have lost positions of leadership.
Like Kodak, IBM and Polaroid, furniture retailers facing changes in technology, in their supply chain or in consumer behavior can make the choice to fiercely protect an existing business model. Alternatively, they can hedge their bets by testing out new technologies, ideas, and models. In our industry we’ve seen the tide of imported goods and internet sales wash over many traditional independent retailers that put all their energy into resisting change. Many who have joined buying/marketing groups, become early e-commerce adapters, tested new retailing models or purchased franchises have fared better.
Marketing & Positioning
An example of the merit of being responsive rather than resistant to change occurred in the time keeping industry. Following the introduction by Japanese and American watchmakers of affordable quartz wristwatches, many traditional higher-end Swiss clockmakers continued to produce mechanical watches. While they have lost market share, they have made changes “to remain in the hunt” by focusing on fashion. In essence, they resisted technological change, but didn’t ignore it. They adapted their marketing by targeting a narrower consumer base. Mechanical timepieces are now worn more for their aesthetic attributes, as jewelry and a statement of one’s personal style, rather than for their accuracy and timekeeping ability.
Likewise, many home furnishings retailers have been wise to consider adapting to change by becoming product specialists, advertising creatively and aggressively pursuing niche market strategies.
In the 1800s, J.D. Rockefeller became the richest man in America. His personal worth was $900 million even though he gave over $530 million to charity.
Rather than initiating changes in Standard Oil products or modifying quality and price, he reduced cost and overhead by focusing on logistics to capture leadership in an industry in transition. This is another path for retailers who see opportunities to cut costs with fierce attention to continuous improvement.
The highway to leadership through change offers opportunity via many paths. Not every path is the right one.
We are all familiar with cases of enthusiastic independent furniture stores that responded to large low priced competitors with copycat policies. They saw new ideas emerge and then followed the leader with imitations or similar products and marketing strategies. Unique features or selling propositions were replicated in detail.
Because those that are first in the market normally gain and retain market share, copycat marketers are often resigned to buy market share with discounts or reduction in margin.
How we handle change internally significantly effects how it is accomplished externally with our vendors and customers.
Change is inevitable. It wears many different hats. Just as some suggest humans recycle most cells every 7 years, organizations require a regular renewal of ideas, products and policies to keep pace with the changing market, including consumer needs and wants.
Consistent change in the manufacturing and marketing of the furniture industry is the new normal. Everything from bedding to motion, including color and finishes, is subject to intense scrutiny.
Neuroscientists confirm that studies show it is normal to be reluctant to take risks and risk change. We become creatures of habit, and habits make us comfortable. We tend to, therefore, frequently resist change, even when old habits become destructive.
Only when we recognize this tendency can the issue be confronted and so change the way we view and respond to the inevitable... change.
Ray Morefield has been affiliated with leading corporations in the housewares, hardware and coatings industries. He has also served other industries in an advisory capacity through Common Goals, Inc. Questions or comments can be sent to him by emailing email@example.com.
Read other articles by Ray Morefield