How many of us have seen the Alberto Brea quote:
Netflix did not kill Blockbuster. Ridiculous late fees did.
Uber did not kill the taxi business. Limited number of taxis and fare control did.
Apple did not kill the music industry. Being forced to buy full-length albums did.
Amazon did not kill the other retailers. Bad customer service and experience did.
Airbnb did not kill the hotel industry. Limited availability and price options did.
Technology by itself is not the real disrupter. Not being customer-centric is the biggest threat to any business.
Can the same be said of Thomas Cook and their dramatic collapse over the weekend of 21st September? The company is an iconic travel brand that has been operating for 178 years and its collapse left 21,000 jobs at risk, 9,000 of which are in the UK, and 150,000 UK passengers stranded abroad. The knock on effects in the company’s supply chain are also starting to be felt with 350,000 non-UK passengers also abroad on holidays offered by the tour operator. Thomas Cook was one of the world’s best-known names in travel, thanks to the inspiration and dedication of its founder. The firm was a pioneer in organised travel but struggled to maintain relevance in a changed marketplace.
The airline part of Thomas Cook’s business has been profitable, however the tour operator business has been in heavy debt for some time. So what could Thomas Cook have done differently? Their holiday business has been based in high street stores selling lower priced packaged holidays, and just looking at the examples Mr Brea quotes, you can see the analogies. Today’s travelers want more choice and flexibility, and don’t want the limited options of off-the-shelf holidays. If Thomas Cook had offered a wider range of options to more than just the budget traveller, no doubt the story would have been different. Focusing on an outdated model which is popular with one section of the public only left the company in an at risk position.
What can businesses learn from this? In the retail and leisure sector businesses need to have a good hard look at what they are selling. This is a fast paced sector which is constantly changing to match customer’s demands. Does your business do this? Are you selling the same things you always have in the same way? Are you able to move with the times and adapt new technology to change your business model and offer your customers what modern technological life has led them to come to expect?
Thursfields Commercial team is experienced in advising businesses in the Retail and Leisure sector on ensuring their businesses are consumer compliant and providing risk management advice for your business and its contracts.