NEW YORK CITY — Retailers struggling to navigate an increasingly challenging market must strive to seize new opportunities and offer an experience rivals can’t match, Virgin Group founder Sir Richard Branson said during a Monday morning keynote appearance at the NRF Big Show 2017.
“Retail is tough,” said Branson, who’s created more than 400 Virgin-branded companies worldwide in verticals from travel to financial services to entertainment, which employ about 60,000 people across over 50 countries. “I sympathize.”
Branson knows from personal experience just how tough the retail business can be. At its peak in the 1990s, his Virgin Megastores music chain spanned hundreds of locations across the globe. But the rise of digital music, spearheaded by Apple’s iconic iPod (and the resulting plunge in physical music revenues) ultimately forced Branson to shutter all but a handful of stores in the Middle East and North Africa.
But Branson leveraged the failure of Virgin Megastores to launch new businesses. “When we saw the writing was on the wall for music retailing, we looked at what was selling well in stores,” he said. “It was mobile phones, so we said ‘Let’s get out there and start a mobile phone company.’ Videogames were doing well, so we started a gaming company. Those products became much bigger than our retail stores ever could have been.”
Retail brands facing similar digital pressures should consider a similar approach, Branson said. “People who own retail stores should not think of themselves as retailers forever,” he said. “Be entrepreneurial, and spin off businesses to survive.”
Retailers should also focus on delivering a customer experience bettering the incumbents in the space, Branson added. “Virgin Atlantic [the airline he launched in 1984] started with one plane. We survived by being better than [the established airlines] — by offering a much better product.”