What the heck is a “Blockbuster Syndrome”? Before you totally dismiss this article, please read on. You might be surprised how much the average ECP practice has in common with the once behemoth movie rental company, Blockbuster. We can learn a lot from their rise and fall.
Short history of the “rise and fall of Blockbuster” – Remember back 20 years ago when there was a mom-and-pop movie rental store in every town? Then, in the late 80′s and early 90′s, a company called Blockbuster began to take over the movie rental market, and put a lot of the mom-and-pop stores out of business (see Wikipedia for a detailed history of Blockbuster). It was sad to see the small rental stores go away, but wow, the selection and convenience that Blockbuster offered was just what the consumer wanted (at that time). Fast forward to 2009 when Blockbuster had 5,000 stores and 60,000 employees spread over 17 countries worldwide. How could anybody compete with this monster company?
Unless you have been on a deserted island the past year (not a bad idea), you probably know that Blockbuster filed for bankruptcy last September (2010) and a few weeks ago, Dish Network won the right to purchase Blockbuster’s assets at auction for around $230 million. This is the same company that was purchased by Viacom for $8.4 billion (that’s with a B) in the mid 90′s.
So what happened and what can we learn from this fall from grace? If you really look at the company’s sordid history, they were very arrogant and did not listen to their customers. Their CEO made statements in interviews to the effect that they were too big and had too much market share for anyone to compete. When startup companies like Netflix and Redbox came along, they dismissed them as no-threat. I have a friend that was pretty high up in management at Blockbuster around 2005, and he said that when top management talked about Redbox, they actually laughed at the notion that Redbox would take any market share away from them. Blockbuster management did not listen to the consumer. Keypoint – Redbox and Netflix did listen to the consumer and built their business model around what the consumer wanted; convenience and affordable entertainment. Blockbuster did not pay attention to the changing trends in how the consumer wanted their entertainment.
The other day, my teenage son and I pulled up to a 7-Eleven and saw a Blockbuster movie rental machine (like the Redbox ones that are everywhere). My teenage son said, “Wow, they are a day late and a dollar short”. Even my teenage son recognizes that Blockbuster was too slow to make the changes to meet the consumers’ demands.
Major lesson we can learn from the Blockbuster debacle. We must listen to the consumer (a.k.a. – your current and potential patients). There is a ton of data to support the fact that the consumer is changing the way they shop (and purchase) products. A few years ago, who would have thought that anybody would buy shoes on the internet. Don’t you have to try on the shoes first? But Zappos.com is a billion dollar company that sells shoes online. Consumers are changing the way they buy shoes, jewelry, rent movies and (can you see this coming) they are changing they way they shop for (and buy) eyeglasses! The consumer is looking for convenience, selection and increased value.
This is not to say that every patient will immediately stop coming into your practice to purchase eyeglasses. Less than 3% of glasses are purchased online currently (hard to get a real number since most online eyeglass retailers are private companies that don’t report sales). If the trend in online eyeglass sales parallels other consumer online shopping trends, our industry will probably give up about 10% to 15% to online sales. I’m sure there will be a lot of debate over how much the percentage will actually be, but in 2001 did you think online contact lens sales would eventually approach 20%?
What can the “average” ECP do? First, recognize that some of your patients’ needs and shopping habits are changing. They want (and need) convenience, selection and better value. Consumers are using the internet to help them make shopping (eyeglass purchasing) decisions. Every ECP needs to be developing an “online presence” strategy for their practice. That doesn’t mean that you must sell eyeglasses online. That is an individual decision. However, every ECP needs to have a creditable presence at the place where their current and future patients are hanging out – that is the internet. This includes Facebook, Foursquare, blogs and it is critical to have a quality (professionally developed) practice website. A good internet strategy is a wonderful opportunity to compete on a level playing field with the big box guys and other online eyeglass retailers, without spending a ton of money. For example, a good Facebook page will engage, entertain and inform your patients (and potential patients). That means providing quality content and paying daily attention to it. Be sure to inform current patients about your Facebook page and ask them to get connected to your practice by “Liking” your Facebook page (put signs in your practice, mention in newsletters and all printed material).
Let’s use the Blockbuster situation as a wakeup call. The next time you drive by a Blockbuster store or see a Redbox movie rental machine, think about how you are reshaping your practice to meet the changing needs of your patients. Hopefully, you are mirroring the success of Redbox and instead of falling prey to the “Blockbuster syndrome”.
Bob Main is an optical industry veteran, with over 25 years of retail optical experience and the last 5 years specifically engaged in internet marketing and social media. As an Internet Business Coach/Consultant, Bob’s blog (www.TomorrowsOptical.info) offers ECPs and optical retailers the information they need to learn how to grow their practice/business using the power of the internet.