2015, an eventful year for the retail sector. Numerous chains ran into trouble or actually went bankrupt. But has much changed in their approach? Many retail chains are choosing to cut costs drastically, but at the same time are continuing on the same path as they have for years.
The same was true at V&D. Round of cutbacks after round of cutbacks. The board's first reaction to new financial problems was to close the webshop.
Innovation still plays hardly any role. Just before the end of the year, the news we had been anticipating for years finally arrived: the bankruptcy of V&D. The jobs of 10.000 employees are at risk as a result.
The stores will remain open for the time being, but the company's future after this is not yet known. What can we learn from companies like V&D? How can we ensure that our companies have a better outlook?
Learning and the identity crisis
When we look at analyses of the department store, essentially the same points emerge everywhere. V&D has been struggling for years and is completely sluggish. Barely any profit has been made for nearly 30 years. It is therefore a miracle that things have only really gone wrong now.
One of the main reasons is the identity crisis that V&D has been struggling with for years. Competitors such as De Bijenkorf and Action have a clear positioning at the top or bottom of the market. V&D has been torn between two ideas for years and is therefore stuck somewhere in between.
One CEO focuses on private label brands, while another phases them out. V&D no longer stands for anything and is thereby losing its position in the market. This is a risk that every company faces.
Your company too! That is precisely why managers are expected to have a clear long-term vision. What does your company stand for?
Taking care of your employees
The Netherlands is a country with a strong care culture. For many years, we have been accustomed to employees being protected and to all bearing a large part of each other's burdens together. Very different from the American culture, for example.
The owners of V&D, not entirely coincidentally American investors, however, chose a different path regarding the financial problems. A very hard path by Dutch standards.
The financial problems were passed on to the employees, which put the company culture under even more pressure. Your staff is your most important weapon in the battle, especially in business services and sales.
The moment you alienate your employees or salespeople, your company is doomed to fail. Therefore, always ensure that, no matter how difficult it is, your employees remain protected and motivated.
Stagnation means decline
The lack of identity, the treatment of staff, the crisis, the mild winter. Undoubtedly, all of these had an influence on the downfall of V&D.
But this company, which has been in trouble for 30 years, succumbed primarily to one of the most dangerous business phenomena: stagnation! The rise of the internet is still cited by the board as a major reason for the problems.
This indirectly acknowledges that they have more or less ignored a phenomenon that has dominated all trends and innovations for years. Unbelievable. Even another struggling retailer, Blokker, is trying to seize its opportunities with a separate online marketing department (Nextail).
Perhaps too late, but they are trying. Or they are launching new concepts that fit current trends, such as Big Bazar, a competitor to Action. The problem, however, is that V&D has not continued to evolve for years.
Market trends are not sufficiently recognized or are not picked up. People continue working in the well-known, familiar rut. As soon as you, as an organization, become complacent about your current position, as soon as you are no longer motivated to truly innovate, you unconsciously give up your company's right to exist.
Besides V&D, there are numerous other retail chains that have suffered or will suffer the same fate. These companies, too, have simply ignored developments in the field of the internet for too long.
Or worse, they once started and have since largely phased out their online activities, such as Intratuin.
Professor Cor Molenaars indicated just this week that at least 14 other chains are in trouble or will become so. Which companies do you think will not survive 2016?