Reinvention can help businesses escape death

By Kay Plantes

Companies die. Unlike people, however, a business facing a turbulent market situation has a chance to escape death through reinvention. Refusal to do so can only be called suicide.

Magic Mill's odds for dying escalated exponentially the day Whole Foods opened its doors one block away, on the opposite side of University Avenue.

Once the darling of Westside Madison's organic food seekers, Magic Mill's friendly service, fresh produce and aisles of packaged organic food and beauty-health products attracted shoppers turned off to the larger chains.

Whole Foods, a Lexus version of Magic Mill's Hyundai, changed the game. Other grocery stores in its geographic area listened to the market message.
Sentry (now branding itself as Metcalf's, a smart move) introduced online buying with home delivery.

Copps and Metcalf's added organic offerings and enlarged their fresh produce sections and wine and beer offerings. Metcalf's and then Copps revamped their appearance, from a 1960s pale-green-and-gold home decor to a modern, bright 2008 look.

Expanded takeout entrees and a new coffee bar make Metcalf's a tough competitor, especially since it appeals to the buy-local consumer.

Magic Mill, on the other hand, hardly changed. It added a salad bar and expanded the wine section, if memory serves well. Over the years, traffic slowed and, with slower inventory turns, there was less and less product on the shelves. Previously overflowing stacks of multiple apple varieties slowly disappeared, only to be replaced by a few apples, each placed far apart. How fresh could Magic Mill's produce be?

Might Magic Mill have survived Whole Foods' arrival? The independently-owned store had compelling assets Whole Foods and the conventional grocery stores once lacked.

Magic Mill's produce was fresher and its fresh produce was, for the most part, grown locally.

Competitors also left a large hole in the market: fresh takeout prepared food. Available offerings, even at Whole Foods, were bland.

Repositioning Magic Mill as "Madison Fresh" might have secured a winning niche. Imagine savory and unique takeout prepared dishes, surrounded by fresh produce, wines, unique desserts, breads as good as Whole Foods' bread, award-winning Wisconsin cheeses, and anything else needed for memorable and easy lunches or dinners.

I presented the "Madison Fresh" idea -- I'd seen it work in Ann Arbor -- to Magic Mill's manager. He said store owners did not want to give up a concept they loved from the start. Owners have this prerogative. But, like suicide, more than owners suffer the consequences.

My current candidate for a slow suicide is Hilldale Mall's Macy's, a department store that relies heavily on nonstop discounting and advertising glitz to attract customers to mediocre offerings relative to Marshall Fields, the store Macy's acquired. Macy's combination is at odds with the upscale image of the repositioned Hilldale Mall. Luggage that wouldn't survive one car or airplane trip greeted customers entering the store recently, labeled "Only $10 with purchase of cologne."

Absent change, Nordstrom is likely to become Hilldale's anchor store when Macy's lease expires.

Openness to change, creativity and keen observation of marketplace changes are necessary to avoid death.

Objective evaluation of strategy effectiveness is also imperative.

How might your firm be committing a slow suicide? What should you do to become or stay healthy?

madison.com ©2009 Capital Newspapers. All rights reserved.