Think back 10 or 15 years ago to a time when, more often than not, you went into a physical store to buy that thing you wanted. A time when Blockbusters were on every street corner, and Barnes & Noble stores were as ubiquitous as Uber drivers within a 5-mile radius are today.
Unsurprisingly, companies that for so long relied on in-store purchases haven’t been able to keep up with technological giants like Amazon that blazed into the marketplace and showed customers in no uncertain terms that online shopping was the way of the future.
But Amazon can’t really be to blame for putting big-box bookstores like Barnes & Noble or Borders out of business. Neither is Netflix on the hook for the demise of Blockbuster. The reality is, any disruptor could have come along and done the same thing. Names we know like Amazon and Netflix just did it first.
The real reason that these brands went out of business?
They were on a burning platform.
What is a Burning Platform?
In short, a burning platform is a product, service, or even industry that, in light of technological advancement or changing consumer trends, is for all intents and purposes destined to become obsolete.
Take the gym industry, for example. The proverbial fire has yet to burn your local Gold’s Gym or Snap Fitness down, but I think the spark is there.
The big trend in fitness right now is mass customization, but more specifically, mass customization married with convenience. If you can meet with a personal trainer on your phone who gives you a killer workout from the comfort of your living room, why would you ever invest the time, money, or energy to join and go to a gym?
This is the kind of consumer attitude that causes a platform to burn — the impending fire is inevitable.
If you’re a retail brand, you know that relevancy is vital to your success in the marketplace. So the question is: How do you know if your brand is on a burning platform?
My best advice is to pay attention. If your brand has yet to be threatened by technology or innovative disruption, it’s only a matter of time before that happens. No industry is immune.
I heard a statistic recently that blew me out of the water: We have evolved more as a society in the last 20 years because of technology than we did in the previous 500 years. That’s astounding. In a world where technology is evolving faster than we ever thought possible, you either have to keep up or get left behind.
How to Survive a Burning Platform
Any brand can be on a burning platform, but that doesn’t mean it has to go down in flames. Brands can survive a burning platform — they just have to take the right steps.
Over the last few decades, brands have realized that to survive they have to compete on either price or prestige. This dichotomy is something we like to call the Wal-Mart/Tiffany Effect.
“Tiffany” brands are built on luxury and specialization. The devotees to these brands are, in essence, the brand loyalists, the ones who shop by brand name because that brand is part of who they are, their identity. “Wal-Mart” brands, on the other hand, focus on commoditized products or services, banking on customers who want to save money and couldn’t care less about a name on a label.
Brands on either end of this spectrum are the ones that have the best chance of surviving a burning platform.
Being in the middle is where it gets tricky. But that’s also where the opportunity is.
Disruptors & the Rise of Starbucks
One of the most widely recognized disruptors of the last 50 years is Starbucks. The franchise saw huge growth beginning in the late 80s, threatening coffee shops big and small across Seattle, Washington, and beyond. The coffee shop brands that stayed afloat despite the Starbucks heyday were the ones that found a way to carve a unique niche in the marketplace.
Brands like Dunkin’ Donuts survived in the face of Starbucks dominance primarily because of cost and convenience; in other words, the Wal-Mart Effect. If you’re even a casual coffee drinker, you know that Dunkin’ Donuts doesn’t cater to coffee snobs. Their customers are the ones just looking for the path of least resistance to their end goal — a cup of joe to get them through their morning.
Conversely, a brand like Zoka Coffee Roasters can continue to charge $18 for a bag of coffee that would only cost $13 at Starbucks. How? Because loyalists to this brand are paying for a premium. With only three locations, all in Seattle, Zoka creates coffee — and an experience — their customers can’t get anywhere else.
Existing in the in Between
So how do brands like Stumptown Coffee Roasters, which don’t really live on the Tiffany or the Wal-Mart end of the spectrum, survive and even flourish?
Stumptown in particular has lasted for as long as they have because they exist for a very specific audience — the “hipster” coffee drinker. Stumptown chose their tribe, and as a brand they’ve dedicated themselves to that tribe through their product branding, shop design, and location. (They’re primarily in Portland, with additional shops across a curated list of neighborhoods in cities like New York and Los Angeles.)
Or take The Elliott Bay Book Company in Seattle, which has done remarkably well not because of how many franchise locations they have (none, to be exact,) but because they plugged into their employees and into their community. Their book selection is curated almost to the point of obsession, with picks you won’t find in most traditional bookstores or ever stumble upon online. As a company, they thrive on culture and passion; that’s ultimately why they have such loyal customers.
Most brands live in this same space, this in between. If this is your brand, do what a brand like Amazon can’t do. Be hyper-local. Go deep. Get good at one thing. Offer customization, personalization, specialization.
If you can find your niche, you don’t have to be a Starbucks or a Whole Foods. Your customers will stick around because you speak to who they are and what they want or need in a way that other brands simply can’t.