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When times are tough, take big risks…!
May 12th, 2009
This may sound counterintuitive, but it’s what great brands do.
For them, a recession is the best time to launch something new. Look at the last three downturns.
In 1984, Apple launched the Mac, and Virgin launched Virgin Atlantic.
In 1992, Nokia launched its first GSM mobile, the Nokia 1011.
And in 2001, Toyota launched the Prius globally, and Apple launched its iPod.
All went on to create new demand, generate big revenues, and in some way change the world.
Each responded to, and helped shape, the spirit of the age.
At the beginning of the era of deregulation, the Apple Mac and Virgin Atlantic both aimed to free people from the tired old establishment.
At the start of the liberating age of the mobile and the internet, Nokia was a completely fresh brand from social-democratic Scandinavia.
And as blatant consumerism started to wane, the Prius and the iPod were both understated, highly designed ways of showing off.
What does all this tell us? Recessions are a time when entry costs are often lower. But they’re also times when people rethink things, when they’re open to something new – in fact, when they most need something new.
Right now, the best brands should be lining up new things that build their brands, and that shape a new world – things that give individuals new powers, that cross public-private ownership, that are ethically unimpeachable, that aren’t too western, that demand collaboration rather than consumption, that in some way fix the world.
As Ryanair’s Michael O’Leary said in the London Sunday Times (29 March), ‘There’s never been more opportunity… Now we can start again and do things properly’.
Is ecommerce the way out of recession?
April 1st, 2009
In the UK, we are digital addicts.
Whilst we have ony 20% of the US’s population – our ecommerce market is 60% of the size of theirs. It’s the largest online market in Europe. 70% of Brits are now online – a very high percentage internationally – and online sales account for 17p in every Pound spent in the UK.
‘Ecommerce is the Noah’s Ark of retail in the recession. People naturally turn online when they want value, and those etailers that provide it will secure a place on the Ark to better times. Those that don’t will not be able to get on’, commented Jamie Muray, founder and CEO of Glassesdirect.com.
This wave of success is being driven by some smart individuals, mainly London based, and often women (able to excel outside of corporate stereotypes) who are focussing almost exclusively on innovation and creativity. From these, significant profits are now being made, and there is little or no discussion about recession. In fact the attitude amongst these entrepreneurs is to find new market opportunties in the chaos.
Take for example moo.com, which at first glance would look like a small London based printing business. They have skillfully expoited the web to sell abroad to increase profits and economies of scale. They now export to over 30 markets globally and the website is translated into 6 languages.
Or what would be seen as a traditional online ‘off-licence’, Laithwaites.co.uk is now shipping wine across the globe and is doing strong business in viticultural markets such as France, Australia, the US and Germany.
Peter Fitzgerald, from Google UK recently commented ‘Ecommerce will not be the only road out of recession for the UK but it will be one of the main ones’
Napoleon said we were a nation of shop-keepers. Well now we are now fast becoming a nation of e-tailers.
We’ve got to use the ‘C’ word ….
March 23rd, 2009
Confidence. That’s what we all need.
OK – we all know that it’s tough out there, but without the ‘confidence’ factor we are going to stay in this mess for longer than we thought.
David Tang, entrepreneur, CEO and founder of Shaghai Tang and owner of my favourite Hong Kong restaurant, China Club, has summed it up perfectly in a recent interview with the BBC. ‘There is an ocean of people who are now feeling so depressed that they have become resigned to the fact that they are in deep trouble … and they have told eveyone else they are in deep trouble’.
Pessimism has an uncanny knack of being self-fullfilling. Tang adds ‘what we need to do now is to sit down and calm down and go back to basics. And most important of all, shed our sense of pessimism’
So confidence needs to be the order of the day. Here are just a few examples of how confidence is winning through:
Agent Provocateur in having confidence in what they are doing and sticking to their business model – producing a 26% increase in sales to the year up to mid March.
Justin King CEO of Sainsburys in sticking to the company’s 125 year old values.
Sarah Weller, MD of Argos in having the confidence to keep on opening stores in a digital age, in the knowledge that online sales increase 9-fold if there is a store in the area, and post unedited customer reviews on their website (which, even when negative, increase conversion).
David Tang ends up with a nugget of advice to governments the world over, which seems to be what we are all now saying;
‘In particular governments must immediately instigate infrastructure projects to increase employment, and they must force banks, particularly those to whom they have rescued, to lend again to small business’….
Branson says the time is right….
March 10th, 2009
OK – hands up! Richard Branson was at my first school. Albeit I was only 5 years old and he had left by the time I arrived, he was still at the same school as me, so I have always felt I had a personal link to him. Of course he doesn’t know me from Adam.
But let’s face it, he’s probably one of the most popular business leaders around, and in this time of economic woe, good old Richard is coming out fighting – ‘don’t be gloomy – now the time is just right to be like me’ he says, in a recent Times article.
The Virgin founder believes that the depth of the recession and it’s impact on once ingregnable industries has presented entrepreneurs with their greatest opportunity for generations. ‘Fortunes are made out of recessions. A lot of entrepreneurs get going in the economic depths because the barriers for entry are lower’, says Branson.
Although he believes the recession will be long, he is optimistic for the 4.7million small and medium sized businesses. ‘If you are best in your field, don’t cut back on quality because the best always survive’, he claims. However, he adds that the ambitions of the next generation could be scuppered by a lack of financing by the banks.
Branson’s advice; ’We cannot allow perfectly good companies to go to the wall just because of liquidity. If your bank is behaving badly, then shout’.
Philip Green in shopping centre acquisition
March 10th, 2009
Are these early signs of green shoots? Excuse the pun, but Philip Green is involved, so that may well be the case.
Apparently Green is a secret backer to buy the O2 shpping centre in London’s Finchley Road for 92m pounds. If he’s involved, he may well have seen now as being an ideal time to buy and that the collapse in commercial real estate is nearing an ebb.
It seems that Green is closely monitoring the property market for opportunistic raids. Once suggestion is that he may be looking for departement store-style shops to showcase his brands.
Only this month Green decided to integrate BHS and the Arcadia brands, including Top Shop, Burton and Miss Selfridge, in addition to announcing a roll our of Top Shop in the US.
A real entrepreneur