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Surviving the Consolidation Era
Gus Downing, CEO Downing & Downing, Inc.
Loss Prevention Magazine, September – October 2005
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Over the last ten years, we’ve seen a rate of change in the retail landscape that is unprecedented in history. This rapid evolutionary process will likely continue well into the future. Economic pressures brought on by a host of issues, including the rise of Wal-Mart, increased competition,the Internet, educated consumers, gas prices, stock market expectations, and many others, have created a retail environment where consolidation of companies and positions is happening as fast as a DSL line delivers the Internet.
The Speed of Change
We are truly living in an age now where speed is not only something we strive for, but something that drives us each and every day. This almost dysfunctional state of being has created a wake of job eliminations, bankrupt companies, merged adversaries, overworked and overstressed upper-middle management teams, increased expectations, and eliminated for many what appeared to be excellent career pathing opportunities within their own organizations.
In the last year or two alone we’ve seen the following changes:
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Adidas and Reebok merge,
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Kmart and Sears merge,
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May Company and Federated merge,
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Best Buy eliminate the regional management teams,
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Saks Inc. broken up and sold,
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Toys “R” Us sold,
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OfficeMax and Boise Cascade merge,
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Burlington Coat up for sale,
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Neiman Marcus sold,
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Winn-Dixie bankrupt and shedding stores,
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Foot Star wiped out,
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Foot Action gone,
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Payless Shoe closing close to 500 stores,
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Bi-Lo Foods sold, Ahold merging divisions,
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Home Depot eliminating the divisional offices and centralizing,
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Gadzooks gone,
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One-Price gone,
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Eckerd’s gone,
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Franks Nursery gone, and
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Cole Vision sold.
This rate of change is happening faster now than ever beforeand other than the obvious and most written about reasons, the Wal-Mart monolith and the dieing of the malls of America, what you see when you strip everything away is technology.
The Affect of Technology
Technology is allowing companies to merge faster and more seamlessly. It’s allowing companies to eliminate divisional offices and centralize quicker and more efficiently. It has given strength and speed to those who have the best and wiped out those trying to catch up. Technology has not only changed our personal lives at home with the issues and advantages of the Internet, but it is changing our professional lives even more so. It is reinventing life as we know it.
The impact all of this is having on us as individuals, as companies, and even as a nation is unknown at this point. The psychologists who study the final impact are as much involved in this evolution as we are. They have little to say as yet, other than the fact that technology has increased the ability to multitask, which has negatively impacted the individual’s ability to focus, thereby fragmenting the end result and decreasing quality work product. Extrapolated out, this means that technology is speeding up everything and in some cases it’s managing us.
It is this writer’s opinion that technology is the number one cause of this era of consolidation. Surviving it must and should be everyone’s concern.
Certainly technology is changing the face of the loss prevention industry as much as any other. And leveraging it to increase the quality of LP services delivered is not only important, but mandatory if you expect to survive long term. You must aggressively and constantly reevaluate your processes and ask the following six questions to increase he odds of your survival:
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How can technology help us do it quicker and better?
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How are my colleagues using technology?
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What new things are coming on the horizon?
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How can I help vendors develop more for us?
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Which staff members need training?
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How do I sell, prioritize, and obtain the funding?
On an individual level one merely needs to look at the disappointing fact that 80 percent of our industry does not have a college degree, yet with the upper-middle-level management jobs decreasing because of technology, the need for a college degree today is more important than ever before. So, for those of you who haven’t completed it or who are just procrastinating, the time for action is now...because tomorrow may be too late.
Relying on Luck
Surviving the consolidation era can be as easy as being in the right place at the right time with the right company. But to believe in that and rely on it is to be foolhardy. Your career is too serious to be left to luck. One must prepare, strategize, take risk, embrace change, and learn each and every day.
The big companies are getting bigger, technology is wiping out jobs, college degrees are becoming more important, and technology is changing our lives. What are you doing to stay in front?
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