11,000 Reasons why being OK is not OK

We wake up today to the news that 11,000 jobs are going to be lost with the imminent closure of BHS, the 88 year old British retail dinosaur. If you had to think of one word to describe British Home Stores then nondescript would be the word. Not boring; not shoddy; not overpriced; not even irrelevant. Just nondescript.

There are many so called ‘retail experts’ popping up all over the media today giving reasons why BHS has finally gone under. Some of them have come close to the real reason, but many of them (including the omnipotent and slightly annoying Mary Portas) have missed the point. BHS has not collapsed because of any issues relating to value for money or the quality of their products. Indeed, on the few occasions that I have visited a BHS over the last few years, I have felt they offer OK quality products and reasonable value for money.

The real problem is one of marketing, and in particular, how you position your business within the marketplace. Professor Michael Porter of Harvard University famously said that in order for a business to succeed it needs to avoid getting ‘caught in the middle’ of his so called ‘generic strategies’. To succeed you either have to offer the best quality, the best price, or focus on something a bit different (such as the way the co-op emphasises it's ethical credentials). Alternatively, you must serve a niche market. But either way, you must choose a definite positioning strategy and then stick to it.

In mass-market clothes retailing, places like Primark and Matalan clearly win on price. And people go to Marks and Spencer, John Lewis, Selfridges, etc, if they want to spend more money on what they perceive to be a higher quality product. So that only leaves the option of providing niche products, or a really special shopping experience. And there are already numerous High Street retailers out there that can do that far better than BHS ever could.

So British Home Stores were left ‘caught in the middle’, offering merely OK quality products, OK customer service, OK prices, and an OK shopping experience. 

Moral of this story: In today’s retail battlefield, being just “OK” is simply not good enough.