As I write this, I am contemplating Brexit, the ongoing US election, and the news that Marks and Spencer is closing 60% of their stores as a result of profits plummeting by 88%.
It is a real pity (but perhaps natural) that large companies, companies that have been successful for some time, and governments which have been in power for a long time, become complacent. So used to being leaders that they no longer pay attention to their voters, their customers, the changing market or other companies. They lose touch with the man on the street, can no longer read the public mood, and become arrogant, telling the people what they want instead of listening to what the people want.
The peril of long incumbency is also that these bodies are usually behemoths, so they cannot adapt quickly even when they realise there is a problem. They are like huge ships which take forever to stop and even longer to turn round. If they even admit they have a problem in the first place.
In June of this year, David Cameron and his advisers totally misread the mood of the people, were arrogant, and Cameron ended up with a Brexit vote and the loss of his political career. He did not even seem to consider that there could be a Brexit vote, he was that out of touch.
I often think of Marks and Spencer as epitomising this syndrome. They were so used to being the shop everyone in Britain went to that they did not notice or care about the changing high street or the upstart companies coming up behind them. They began by giving the people what they wanted and ended up so arrogant that they started telling people what they wanted instead of paying attention to them, and asking them what they wanted.
Once they noticed this (too late some would say), they were like an enormous oil tanker which needs huge amounts of both time and space to stop and even more time and space to turn. No matter how many experts or new top executives they brought in (and it has been a revolving door of chief executives lately), they could not get their customers back. These customers were going to Topshop, H & M, Oasis, Primark, Reiss, you name it. When M & S stayed staid, they lost young customers and were never trendy enough. When they went trendy they lost their traditional customers. Their celebrity campaigns always fell flat because they never featured anyone that resonated with their customers. They have experimented with price points too, without much luck. People who want expensive undies are probably still going to go to La Perla rather than Marks and Sparks.
Other examples of this have been Tony Blair’s government, which spent so much time trying to attract middle-class voters that they alienated their long-term working class base by ignoring them and taking their loyalty for granted. Or Sweden’s Social Democrats who were so used to being in power that they ignored both their voters and up and coming parties who were profiling themselves as the ‘new’ workers’ party. Years later, they still have not regained lost ground, despite having several new party leaders. And into the bargain, their arrogance in ignoring issues about which their voters were extremely worried (the staggering influx of refugees for example) has allowed the far right to grow into the third biggest parliament party, which now cannot be ignored. Some other parties have now – finally and reluctantly – taken up the immigrant issue, but way way too late.
Another example of this could perhaps be Filofax which responded to the increasingly digitalised planning world by ignoring its loyal core of die-hand planner users and going high fashion, with hugely overpriced designer collaborations. They abandoned quality inserts in favour of churning out fashionable binders. As hard as they now seem to be trying to reverse plummeting sales and listening to their customers by producing binders more appropriate to their heritage, is it too late? Gillio and Van Der Spek are small brands, but many Filofax users who are willing to pay more for quality, custom design, and individual service have transferrred some – if not all – of their affections to these and other brands (Kate Spade, Kikki K, Mulberry, Louis Vuitton), willing to pay more for a good product, a product that appeals to them. They are not likely to make a dent in Filofax profits but Filofax should keep an eye on them.
One example of a company which seems to have been in this position and successfully rebranded itself is Fujifilm. When the digital age took the whole market out from under them, they branched into the unlikely field of skincare – using photo development technology to make revolutionary skincare. Their Astalift range is now the number one bestselling beauty product in Japan. They managed to respond to change quickly and successfully.
Another interesting company is H&M. They started out copying fashion trends but then employed all in-house designers who actually create fashion. They have branched out into home furnishings (H&M home), higher priced fashion (COS), denim (Cheap Monday, Weekday and Monki), and & other stories, which does not really fit any particular category. They started the whole trend of designer collaborations with a collection by Karl Lagerfeldt. Its huge success led to further collaborations with Matthew Williamson, Stella McCartney, Versace, Jimmy Choo, Isabel Marant, Kenzo, Balmain, and Victor and Rolf among others. They even did very off the wall collaborations with Maison Martin Margiela and Comme des Garçons. They move so quickly that it is hard to imagine them falling into the M & S syndrome, but who knows? Other stores that are running rings around M & S are Zara, Massimo Dutti, Mango, River Island.
I am really interested to see if Apple will keep their dominance in the phone market, given that Samsung seems to have come out of nowhere to challenge the crown. Apple has not shown anything really groundbreaking since the iPad (I exclude the Apple Watch as it does not seem to have achieved major saturation of the market like the other Apple devices have).
And when it comes to Brexit, the US election, the rise of the far right in Sweden, it can all be seen as a sign that people are tired of career politicians from the big established parties telling them what to think. They are tired of being ignored and talked down to by people who do not face the same daily grind, the same worries and problems they do. They are tired of the lies and the scandals. People distrust politicians and it has led to the rise of candidates such as Donald Trump. I refuse to believe there are so many fascists or racists in our countries. There are some, surely, but not that many! I believe that some of those people just need someone ‘from the real world’ who seems to listen to their concerns and tell it like it is. Non-politician politicians if you like. Who will say ‘Tell me what you want’ rather than ‘Let me tell you what you want’