One of my favorite comedians on the subject of love and marriage is Rita Rudner, who once said, “I think men who have their ears pierced are better prepared for marriage. They experienced pain and bought jewelry.
Another of her gags is: “I love being married. It’s so great to find that special someone you want to annoy for the rest of your life. And, slightly ironically, she’s been married to the same person for over 30 years, although she once said that in Hollywood a marriage is considered successful if it lasts longer than milk.
I’ve been thinking about love and retailers recently, because I’m struggling to understand why people fall in love with their shopping destinations.
Two sets of stores in South Africa were once very popular, but are no longer: Edgars and Massmart. In either case, it is very difficult to know exactly where the direction went wrong and why the next direction was unable to fix it.
Learn more in Daily Maverick: “Something Just Clicked: Lessons in Giving People What They Want”
Massmart has just released its interim results, which show the store improving very slightly in absolute terms, but showing very little of the rebound of other retailers following the Covid decline.
It’s not as if Edgars or Massmart had bad management, on the contrary. As far as you can tell from the outside, the management in both cases was decisive, creative and determined to solve the problems.
Perhaps the easiest way to figure it out is to understand why people fall in love with brands in the first place.
Now, you have to be a little careful here, because there’s more nonsense in the world about brands than about the concept of love.
American branding author Seth Godin once said, “Marketing is no longer about the things you do, it’s about the stories you tell.” Well, you know, everyone loves a good story, but surely we should want the product too. You do not think ? Maybe?
On the internet I found what I think is a good explanation of why people fall in love and stay in love with brands, written a few years ago by advertising agency manager Kendra Lively working for a American agency called Phase 3.
She said, like the four chambers of the heart, there are four reasons why people fall in love with brands: brands make us more who we are; brands say what we don’t have the words for; the brands are reliable partners; and brands give us a reason to stay engaged.
If you think of Apple, for example, there’s a lot of identity in the products, which you can’t quite describe, and the products are reliable and just keep getting better. Simple. The result is that people are willing to pay huge markups for Apple products – well above the competition.
Now apply that backwards to Massmart, and I suspect you might begin to understand why the stores are struggling.
Learn more in Daily Maverick: “Massmart shows bravery in the face of 2021 financial misfortune”
Massmart mainly consists of three sets of stores: Makro, Game and Builders Warehouse. When they were popular – and not too long ago – you had an overwhelming idea of two things: big stores and cheap goods. In other words, the service was good value and there was a great variety because the stores were large enough to hold a huge range of products.
My feeling is that during its heyday management started to lose focus. I know that’s a terrible thing to say in retrospect. But the company has begun to expand both vertically and horizontally into new geographies across the continent, new store types including Cambridge Food and Rhino, and new product lines like in-store groceries. Game.
Yet it has been attacked from all sides: from above with many specialized white goods sellers; from the sides with existing retailers in South Africa simply offering better product ranges, and from below with availability sprouting all over the internet.
Massmart has its own thriving internet division but, of course, for an existing retailer, that’s a double-edged sword. Anything you sell on the internet effectively makes all the rent you pay on those huge stores a little less attractive.
It’s also worth noting that the things that have hurt retail in recent years have hurt Massmart more. Many supermarkets were looted, but they were able to recover faster because inventory turnover in a supermarket is naturally faster than inventory turnover in a white goods store.
Covid also helped big internet players just when physical shopping was starting to fade.
The approach of Mitch Slape, the brand new CEO of the group imported from the American parent company WalMart, is truly irreproachable: stabilize, concentrate, invest, he preaches to the investment community. And the company is clearly moving in this direction. But you have to say they are looking at a long road.
WalMart invested R17 billion for 51% of the company in 2010; the company’s total value is now around 7.4 billion rand and it is sitting on a debt of 16 billion rand.
Amazon CEO Jeff Bezos once said that “your brand is what other people say about you when you’re not in the room.” I suspect what people say when Massmart executives aren’t in the room is that it’s the last-ditch saloon. BM/DM