The Power of Tomorrow
The leading topic at conferences these past few years has been future trends and how we can anticipate the ways in which technology and changing consumer behavior and sustainability, mobility, affluence, gender equity (the dream of it anyway) and more will fundamentally change how we shop, what we buy, and how we buy it.
I'm reminded of an article from May 24, 2013 in WWD, which relayed Leonard A. Lauder's keynote speech at the annual Beauty Summit. His words were prescient and serve as an insightful analogy to what we're thinking about now. He exhorted the audience: How can you see change happening and recognize the future?
Parsing of the demise of the department store, he identified two seemingly unrelated events:
Midcentury America featured a family-run, high-end specialty store in every city. Department stores ruled as citadels of consumer culture, partly because they gave credit. But then the growth of the interstate highway system enabled urban migration to the suburbs and things began to unravel. "Specialty stores couldn't afford to go out to the suburbs, in many cases, and the downtown department stores slowly but surely began to fail. The changes affected not only the US specialty stores but also the global village of independent [suppliers] in Europe [read: change in one place now affects every other place – the results of globalization and offshoring].
The final nail in the coffin was the advent of credit cards that broke the department store's monopoly on credit and allowed consumers to just as easily shop at the Limited or Gap.
His observations align with more recent events (Blockbuster falling to Netflix and iTunes, taxi companies being hacked at the knees by Uber, IBM losing cloud computing contracts to Amazon) as well as classic historical examples (blacksmiths becoming unnecessary thanks to Ford, ice harvesters losing to GE and the refrigerator). The heads-up here is that if we're single-mindedly focusing on the companies running the race with us, we might not look up and see what's happening around us. The risks to Gimbel's wasn't ultimately Macy's, it was highway systems and credit. Just like the risk to taxi companies isn't faster cars or lower fares, it's technology and branding. This is the very definition of disruption. What could save your company, or serve the fatal blow, is likely to come in a form you aren't expecting. As Lauder stated, "No one at the time realized what was happening and what they saw. The things that are happening today inform us for the future and where we are going."
I'll close with three terrific takeaway quotes:
"You have to have a vision of where you want to be. You can't get anywhere by saying, 'Oh, I'll see how it goes.' You have to have a passion to do what you think is right."
A lesson from his father, who founded Esteé Lauder: When a person with money meets a person with experience, pretty soon the person with the experience has the money and the person with the money has the experience.
"You're never too far ahead to lose or too far behind to win," quoting the late U.S. Senator Arlen Spector.