How does a retailer stand the test of time?
There are a variety of reasons why a retailer may last for decades, even centuries
In 1911, Leon Leonwood ("L.L.") Bean came home from a hunting trip frustrated by how cold and wet his feet had got trudging in the woods. He asked his local cobbler to stitch leather uppers to rubber working boots, innovating outdoor footwear that launched a retail business still thriving today.
In fact, one of L.L. Bean’s frustrations in recent years has been keeping up with orders of that very boot, thanks to a resurgence in popularity among not just outdoorsy types, but also fashion mavens and college kids.
What makes a company like L.L. Bean endure while others falter? There’s no one answer to that because so much depends on many variables and the idiosyncrasies of any one company. Still, there are lessons to be found in the success of enduring retailers like L.L. Bean, and others.
“It’s very complicated,” says Nick A. Egelanian of retail real estate services company SiteWorks. “There are not many I’ve come across over the years that are good at adjusting. The one thing about retailers–if you’re not changing you’re probably regressing.”
The essentials of a brand: Staying the same
One thing that experts pointed to is that, aside from keeping up with the innovations that might disrupt their businesses along the way, one of the ways retailers can survive the long term, at least for some, is to remain true to some essential brand promise.
“There are brands that know exactly who they are and they never ever try to be anything more than they are,” Steve Barr, PwC's U.S. retail and consumer leader, told Retail Dive.
Many retail experts point to the likes of L.L. Bean, founded in 1912, and Nordstrom, founded in 1901, which at their core have protected their reputations for excellent customer service with continued dedication to customer service. Both retailers, for example, have long maintained liberal return policies and also are among omni-channel retailers that have long offered free shipping and free returns on online orders.
Arguably, L.L. Bean falls into that category that Barr speaks of—a retailer that knows what it is, understands who its customers are, and delivers on the expectations that follows.
“Good for them that they haven’t wandered away from that core competency,” Columbia University retail studies business school professor Mark Cohen told Retail Dive last year. “They’re going very slowly, waiting for the cues their customers are going to give them. They have the luxury of doing things carefully, methodically, and thoughtfully because they don’t have to please investors. They have probably made some mistakes and have probably discovered some price points that just don’t work. I give them tremendous credit for saying—‘we’re going to do what the customer permits us to do.’”
Another essential: Change
But even at stalwart brands like L.L. Bean, Nike, or Burberry, there’s a willingness to make changes that ensure continued success, despite their seemingly classic style or even old-fashioned ways of doing business, our experts say. One word that kept coming up from our experts is "relevant. And while there are many ways to change and keep up with consumers, (and to stay relevant), one of the most important and most far-reaching is to embrace and leverage new technologies.
"Technology is definitely what helps retailers stay relevant over time, as advancements occur on both the business side and the consumer side to streamline the browsing and buying experience for customers," says Anthony Rodio, executive chairman at Storefront, which works with retailers and property owners on pop-up and other short-term leases.
"For instance, consumers now have an 'endless aisle experience' from the likes of Amazon, who essentially catalogs the world of retail and empowers the consumer to make choice," Rodio told Retail Dive in an email. "In order for other retailers to compete [these days], they need to harness today's technology to better marry their online and offline experiences into a strong omnichannel presence that allows them to fulfill the endless aisle experience in-store."
Technology comes into play, not just on the consumer side and the business side, but also the product side. Consider that, while L.L. Bean’s hunting boot at first glance appears to be a classic, it’s hardly the same shoe invented by Bean himself and his cobbler. The boot now comes in a variety of styles, with performance materials that keep feet warm and dry in ways Bean couldn't have dreamed of.
“I think, from my perspective, it’s less about history and more about relevancy, and even the best of brands, if they don’t maintain their relevancy, will lose their way with the consumer,” Barr says. “The great thing about the classic brands is there really is a tremendous amount of trust. So when those brands do change, even as they’re constantly reinventing themselves, they’re always staying true to their purpose.”
Weathering the storms
In addition to ensuring that they have merchandise that continues to appeal to shoppers, retailers must find a way out of those times when they do find themselves outpaced by changes in the industry.
The thing about a 125-plus-year-old company is that it’s been around long enough to have had to change quite a few times over. Andrea Ovans, writing in the Harvard Business Review, chronicles the many ways and the many times that Sears, for one, has come back from the brink.
That includes the early, highly disruptive catalog days, its opening of brick-and-mortar stores, and its pioneering use of census data and demographics in the early 20th century, among other ground-breaking moves. Plus, over the years Sears has had to adjust to the advent of the automobile, the U.S. population shifting from farms to cities to suburbs, wartime, peacetime, and wild swings in consumer tastes and behaviors and its own brand reputation.
“The Sears transformation was more than a change in marketing strategy. It was also a change in the logic and culture of the business. In fact, the process of altering the logic is what changed the culture.” That’s from a 1998 Harvard Business Review paper, “The Employee-Customer-Profit Chain at Sears,” describing the radical turnaround at Sears then.
The next paper on Sears has yet to be written, and the once iconic retailer—which Yahoo Finance’s Jeff Macke called "a company that was once the best of Amazon and Walmart rolled into one”—is struggling mightily, but perhaps the retailer has a better chance than most people think.
“What we see is those brands that are not consistently looking forward and reinventing themselves slowly but surely lose their relevancy to the consumer,” Barr notes, speaking generally and not about Sears in particular.
The pressures of ownership
Another factor that can work for or against a retailer is whether it is privately or publicly held. A privately held company, like L.L. Bean, often has strong ties to its founders or their families, and may have a greater chance at staying true to its values and essential “brand promise.”
And because boards of directors and shareholders can be impatient, it can be difficult for a publicly traded company to take steps necessary to reform.
“Why do some do it and do some not do it?” Barr asks of which retailers survive over the long term. “Everything as it relates to the consumer is very dynamic. The leading companies are constantly looking forward to not only their own products but to global mega-trends.”
And that means understanding shifting demographics and tastes as well as technology—including, sometimes, the best materials to use in a hunting boot that's sometimes worn by fashion-forward urban college kids who never go hunting.