Innovation. Wired has termed it the most important and overused word in America. They’re right on both counts; you can’t read an article about business growth without seeing at least one mention. But there’s a reason it’s ubiquitous.
Like most buzzwords, “innovation” has become such a trendy term that, at times, its meaning is a little fuzzy. Allow me to break it down to one elemental concept: To be innovative is to be more effective than your competitors. The how is where it gets hard, mostly because it means something different for every company. Regardless of the ambiguity or uncertainty innovation represents, it is essential that you understand what it means for your business. You’ve heard of the phrase “adapt or die” in the context of evolution – in business, it’s innovate or die.
Case in point: After more than 65 years of business – and after rising to the top of its vertical – Toys “R” Us is filing for bankruptcy with $5 billion in debt. According to an article on Money, the toy giant announced its plans to close all 735 of its U.S. stores (and 1,758 locations worldwide, according to Wikipedia).
CEO of Bratz Dolls Isaac Larian and other investors have pledged $200 million in a crowdfunding campaign as a desperate last-ditch effort to keep half of the U.S. stores open, and #SaveToysRUs is trending on social media. But, despite this movement, it’s unlikely the campaign will reach its $1 billion goal. Even if it does, it seems a lot like delaying the inevitable.
But why? What went wrong? Quite a few things, most of which fall under the category of lack of innovation. While Toys “R” Us certainly faced disruption from online retailers, saying Amazon put them out of business is at best a gross oversimplification of the story. The idea that online is phasing out retail is simply not true. In fact, even Amazon made a big move toward a physical presence with its recent multibillion-dollar Whole Foods purchase. Consumers are telling business leaders that they want brick-and-mortar stores for the experience and interaction, and Amazon listened.
If Toys “R” Us had created a store experience that captivated children and connected that to a consumer-centric online platform that let parents and kids decide how and when to engage, the toy giant certainly could have remained successful. Another idea might have been leveraging or partnering with YouTube. In recent years, it’s become popular for kids to post videos of themselves playing with their toys, and Toys “R” Us could have used the platform to spot trends and inform their marketing strategy. But they refused to change, to innovate. They relied too heavily on their past success and failed to realize the world around them was evolving.
Innovation is difficult and uncomfortable, but we’re seeing traditional retailers evolve with help from smaller, nimbler partners. It’s much like the story of David and Goliath. David was small but inventive while Goliath, though much stronger, relied too heavily on his size. The traditional retailers who are successful are realizing what they can accomplish by partnering with disruptors rather than competing with or ignoring them. They’re combining their strength of reputation with new ideas and ingenuity for overall effectiveness.
The key is to choose that partner wisely. You need an ally who understands your industry and can offer innovation that allows your business to thrive. LegacyShield understands your needs and the industry, and we have the capability to bring the innovation the market is demanding. The world is changing. We at LegacyShield want to help you be a part of that change.
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