How do brands die

I have often mentioned that being born in the 80’s and living through the years after has offer me and my generation an un-paralleled advantage- We have seen the world change in bits and pieces, day-by-day. Technology from my childhood is obsolete in most cases today; the one still around only have classical value. What the changes have also resulted in has been the fall of dominant empires and rise of new ones which replaced them. Some like Sony who changed with times still hold their stature. I don’t think people rate the technology of a Bravia, Vaio or Xperia lower to the Walkman at some point in the 80s. Sadly, the ones which got lost in their own glory to forget the art of adaptation went on to immortalize Darwin.

One of the most appealing and fascinating gadget my father had was an SLR camera from Minolta as well as a point-n-shoot Nikon. But what had to be treated with immense respect irrespective of the make was the camera film. So it didn’t matter if Sakura was now Konica, Fuji was cheap or Kodak was expensive- if by chance the film from any one got exposed accidentally opening the reel cover, down the drain went the memories. The films also demanded respect as you could click only 36 shots per reel (yes, there were some shady ways to do more on the same reel), so taking a picture was like a responsibility.

I took some time to read up on Kodak for making a case study and realised that Eastman Kodak was the oldest and the biggest player in the camera film plate arena for close to 100 years when I might have held a camera. It was a legend that had over 90% market share at one point thanks to its smart selling strategy of cheap camera units and milking the film and photo paper cows. Along with Gillette and its shaving blades, this was another great example of making the big profits on the consumables- something still followed by a lot in the market.

After the patent for the film plate was taken, a folding Kodak pocket camera in 1890, which was pegged at a very affordable price of $25. The main stay was the $10 to process and print the pictures which in combination with the camera paved the road to greatness. I’m not sure when BTL marketing was officially recognised, but in 1897, Kodak sponsored an amateur photographer contest and saw 25,000 participants. In 1904, Kodak held a Grand Kodak Exhibition featuring 41 photographs to attract an audience for the art. This connect is so natural that I cannot imagine if this marketing proposition might change for such events today.

The ads were so powerful to take the photography to people other than professionals - “You press the button- we do the rest”. Not to mention, signage’s along the roads reading, ‘Picture ahead’ with the well-recognised Kodak name under the sign is fabulous use of ambient media. The term "Kodak moment" might be used for eternity for every memorable picture. This was the strong brand connect that Kodak has in the memory of every individual. Sadly, I feel it won’t be wrong to say that no one uses Kodak in taking pictures any more.

The demise of the brand to the levels of bankruptcy in 2012 has been a classic case of treating it as a product offering and forgetting that the brand was a living being with a personality. Much like a human being, it has to adapt to changes and transform its role in the life of people to maintain its relevance. Yes, handling competition was important- so was transition into technology that could change the business dynamics. Kodak had developed a digital camera in 1975, the first of its kind. But the product was dropped for fear it would threaten Kodak's photographic film business, which was already facing threat from Fuji by means of its competitive pricing.

Marketing Myopia, as my marketing professor preached was like being so much in love with your products that you become completely ignorant of what damage this obsession leads to your own self.  The outlook from the management always remained that profit for Kodak was in making money on the consumables side as the optics was just a one-time buy. Digital imaging transformed this myth and when Camera phones came out, Kodak went into the business of vendor driven memory chip business.

Kodak had a fabulous connect with people and their memories. They had done everything right from the very beginning to reach a stature no one else can possibly manage. All they needed to do was possibly maintain that connect irrespective of selling films to feed their camera. If the phone got a decent camera, the logical move was to bring out a super camera that could also be a phone. Photograph= Kodak; that was the least or most they has to ensure. Sadly, they missed the bus and ran out of business.

What all this only signifies is that brands are like living beings interacting with their users. People wish to be associated with a brand for a part of its persona that builds these bonds. If the threads of this bond are not recognised and the relation turns into a transaction; you might just be the next Kodak. 

‘Mall’ed no longer

I’m not sure if I can pin point- but somewhere in 1999-2000 was when Crossroads came up at Tardeo in Mumbai as a product of the ‘Retail Revolution’ India was about to embark on. The earliest I recall is a cartoon in the papers with a motorist stating “Now I know why they chose this name, it has made it easier to cross roads here”- a statement marking the ocean of people who turned up to witness the mall.

It was a novelty. Where would you get the best brands, entertainment options and food under one roof? Soon there were malls and retail chains mushrooming across the city with each one bringing in its own speciality. For people like me, it was a quantum leap to look beyond Heera-Panna or other shopping centres. Indeed, a place to shop, watch a movie, have great food and not to forget plenty of parking space to give up worrying about the car- they were like a dream come true for all.

With floor spaces sprawling 1000s of sqft, these spaces offered the perfect platform for the brand invasion in India. Malls even got specialized to attract every section of the society- from the super rich to the one’s who saw the mid week low prices to their liking. A family weekend now was all the members in the family going out together to a mall which could keep them busy the whole day with fun filled activities, shopping for novelties to groceries, food courts with everything under the sun to offer along with a multiplex to make every weekend big.

Old mills in central Mumbai turned high streets and almost every realty developer in Mumbai who has the space at his disposal made sure a mall was a part of their project. One after the other, every mall was trying to outbid each other in terms of space and facilities. Retailers like Future group were in the media for opening up across the country, even in tier II markets.

But what all this development was doing was creating the classic imbalance between demand and supply with supply out running demand by miles. Adding to it was the economic slowdown in 2008-09 and the real estate market going bust adding in to the problems. Warning signs started showing up when shops in malls started to close down. I guess the first amongst them was the Citi Mall at Andheri which never came anywhere close to the high street shopping of Lokhandwala or the brands of Infinity Mall a few hundred meters ahead.

Today the retail revolution has gone from boom to doom in a matter of 15 years. No longer is Future group expanding with 10 stores in a month, as a matter of fact I see them consolidate the existing assets by redesigning their offering. Citi mall and Milan mall have closed down and K- Star and Kohinoor mall have unoccupied spaces outnumber the ones with business.

Which brings me to the question- how do some malls survive while some run out of steam even at times when consumerism is at its peak and fuelled strongly by our population force?

The answer lies in what we call the ‘Bubble’ in economics. In the early days of the retail revolution, the novelty of the concept attracted an avalanche of people interest to be a part of the wave paying premium for land and location. Retail survives on the two pillars of margins earned through bulk buying complimented by footfalls to turn the margins to profit. Footfalls come in depending on the kind of offerings and what differentiates one mall from the other. Also, malls attract a lot of window shoppers who do add to the footfalls but not always contribute to revenue. Besides as the number of options increases, the repeat customers go down.

Porter’s 5 forces model also comes into the play. While malls competed amongst themselves, they did not overthrow the traditional business methods of standalone shops in market areas. External threat also came in from online shopping portals. I read recently that an online shopping portal has revenues greater than Shopper’s Stop. Prime reason- bulk buying and the fact that shipping costs never come close to the establishment cost for a store in a mall.

Bottom line- much like Darwin’s theory, the survival of any mall will lie completely on how well it can manage their profitability through high rental costs, running costs, margins and the competition from online space.