From fear to friendship—the need to embrace change and make it work for you

Noted business author and consultant Tom Peters is credited with stating, “If you don’t like change, you’ll dislike irrelevance even more.”

After visiting more than 275 Christian retail channel stores the last two years, I couldn’t agree more. Countless stores I have visited exhibit all the telltale signs of doing the same things and expecting different results. It doesn’t happen. To get different results, you have to deploy a different strategy.

The retail landscape is littered with closed stores that failed to change. The recent liquidations of Linens ‘n Things, Goody’s and Circuit City are just a taste of what 2009 will likely hold.

Many respected retail consultants are saying that up to 14,000 stores will close during the year. The reasons are many: Failure to differentiate from a competitor, poor cash flow, poor merchandise selection or presentation and changing consumer habits top the list. During an economic downturn, execution is even more important because consumers are spending less.

I care deeply about Christian retailing. In 1975, when I created the concept of music demos and listening stations, it began a 34-year history of passionately seeking to help retailers succeed. Now, at the risk of perhaps alienating some of my very own retailer customers, I feel compelled to speak straightforward about Christian stores.

Change is usually not easy. Doing the same things, following the same routines, is what most people prefer. And, let’s be honest, most small businesspeople would prefer not to have to face competition. But doing the same thing over and over again rarely challenges us. Lack of competition leads to complacency and rarely leads to advances.

Meanwhile, innovation and technology have led to a plethora of choices in just about every facet of life, including multiple choices of how and where to purchase many of the products available in Christian retail stores.

Let’s be clear: There’s no point spending one additional minute bemoaning that publishers sell direct, that Wal-Mart carries many of your best-selling books, that Internet retailers undercut your prices and that some people illegally swap music files. None of this is going to change. Debating whether it is right or wrong will not reverse it. The only thing it results in is a negative attitude.

Where is it written that retailers are entitled to have customers shop in their stores? Or that retailers are entitled to sales increases year after year? We are not entitled to anything. We must earn our customers and then continue earning them to keep them coming back. There is no “top of the hill” resting point. We must always be climbing.

Success in anything starts with a positive mental attitude. Years ago I had the privilege of coaching several high school cross country teams to state championships and nation rankings. The key point that I emphasized every day to my athletes was that the real competition wasn’t in the foot race but in the mind. If they didn’t believe they could win, they were already defeated.

So, let me encourage you to begin each day by thinking about how to differentiate yourself to effectively compete in the marketplace. If you’re focusing on your competitor, you’re not focusing on where you should be going. You’ll never be charting your course. You’ll always be reacting to your competitor’s agenda.

How does this play out in the real world of your store? Let’s use the examples of music and technology.

Music sales peaked in 2000 and have declined every year thereafter. The blame has been put upon everything from illegal downloading to a lack of new mega-artists. Certainly piracy has affected sales, but a strong case can be made for the impact of the rise of other entertainment choices, too.

Consider that just nine years ago, video game sales were almost insignificant and movie DVDs were nonexistent. The iPod had not yet been introduced. Broadband Internet service was not widely available and too costly for many consumers.

Fast-forward to today: The video game industry is bigger than the music industry. DVD sales, while having peaked in 2007, are still significant. The iTunes store has sold more than 5 billion songs. Cheap broadband service has allowed e-commerce sites to offer an ever-increasing selection of goods and services.

Technology has certainly made it more challenging for brick-and-mortar retailers of media products to compete. Online retailers of books, music and movies, according to Internet Retailer, now account for more than 15% of all sales of media titles.

Brick-and-mortar retailers can compete, but not if they continue to sell music the same way they’ve always done. This will only result in a continuing sales decline. Forrester Research is forecasting a 9% annual decline in physical music sales and a 14% annual increase of digital music sales through 2013. As a brick-and-mortar retailer, you simply must change your strategy or you will be irrelevant.

One of the benefits of e-commerce is that it can offer a virtual inventory of practically every music CD and movie DVD currently available. No physical store can stock even a fraction of what is available through what is often referred to as “the long tail.” So, how do you, as a brick-and-mortar retailer, compete? By also using technology.

Media-on-demand systems such as Just in Time Digital’s isMOD and my company’s myMEDIA BurnBar kiosk are enabling retailers to “virtually” stock thousands of titles with no associated inventory cost.

Customers using the myMEDIA BurnBar kiosk can choose from more than 18,000 accompaniment track, artist CD, audiobook, video game and software titles. Additionally, they can select more than 60,000 song titles and mix their own custom CDs.

All this can be burned to CD or DVD in just a few minutes. Very soon customers will also be able to purchase songs as MP3s and load them to their portable players.

With these types of kiosks, technology has put physical location retailers back in the game and

given them a competitive advantage. When we analyzed the 2008 sales data of myMEDIA BurnBar, we found that more than 86% of all accompaniment track titles—nearly 9,000—had sold at least once. In January this year, 68% of all the artist CD titles sold only one copy, while an additional 17% sold only two copies.

This tells us that customers want a very wide selection. Retailers using media-on-demand technology are giving customers what they want—and winning their loyalty in return.

Of course, there is much more to fully executing this or any other viable strategy. But it all begins by embracing change and making it an ally. If you don’t, outside forces will change you by hastening the closing of your doors.

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