The end of September was bad news for the likes of two well-known companies I’ve frequently been a customer of: Thomas Cook and Forever 21. As big players in the package holiday and retail industries, the news of these organisations falling into administration came as a surprise to many.
Thomas Cook, the UK’s oldest travel company, appeared to have a good model for success as it offered a wide range of holidays for a good price and operated its own airline. Forever 21 also seemed to be doing well, offering the latest fashion to teens at competitive prices.
Below the surface, somewhere within their business models the strategies of both companies have failed to keep pace with competitors, consumer buying trends, and in the case of Forever 21, its customers.
Many would argue that it’s the classic story we have sadly seen played out throughout the year. Both companies have failed to adapt their approach to fit the increasingly online world we live in, with both relying on sales coming from their physical high street stores and have neglected to take digital to the next level as many of their competitors have.
Shifting strategy to keep up with consumer demand
It’s more important than ever that companies take notice of changing consumer demands and consistently evolving themselves to meet them.
Thomas Cook surely suffered from a combination of a lack of differentiation compared with competitors, relying on a legacy brand appealing to an older demographic of customer and not marketing products that would appeal to the younger, ‘Airbnb’ generation.
Forever 21 had one competitor that has evolved through challenging periods and reacted in line with industry changes: Zara. As a leading fashion brand that acts on a ‘fast-fashion’ model Zara has noticed this is no longer ethically responsible and has launched a sustainable fashion line.
Beyond that, Zara has continued to update its story by refreshing its purpose, product selection, quality and overall brand relevance. It’s also focused on its stores, making them a strength by enticing customers and creating an enjoyable experience in-store with its well-trained staff, music with some stores offering in-store tech such as ‘self-service’ check outs. Zara also has a strong online presence and utilises social media channels to effectively engage with its target audience.
Crisis comms – saying farewell gracefully
With the fall out of both companies, those in charge of what remains owe it to their loyal customers and staff to maintain their brand identity during the final process.
Through their social channels and websites, it’s important that they provide updates, honest guidance and are proactive in offering advice to make their last dealings as pain-free as possible to leave a good lasting impression.
With this week’s news that Pizza Express is urgently searching for a restructuring solution, these three stories are lessons for operators in any industry to become or remain fiercely customer-centric and anticipate market trends, manage a clear, differentiated brand as well as retain and communicate value in their proposition.