Woolworths online is a case study in waiting

So Woolworths is going to return as an online-only retailer, having been bought by Shop Direct (which owns Littlewoods and Choice) after going into administration.

Woolworths closes (Pic by osde8info on Flickr)

Woolworths closes (Pic by osde8info on Flickr)

It’s going to be very interesting for a number of reasons.

The first is trying to guess what it will actually sell. It had a music download shop, which closed with the High Street stores, but there’s logical reasoning to suggest digital downloads make a lot of sense. The PaidContent UK article has a quote which claims Woolworths will do entertainment and everything that made it famous on the High Street – but was it really famous for entertainment?

After all, it started by selling children’s clothing, toys and stationary. And Shop Direct might have seen success with Littlewoods, but that’s a name known for catalogue shopping.

And while there’s evidence that ‘bricks and mortar’ shops can do well online, the same evidence lists the top four retailers as Amazon, Argos, Play.com and Tesco.com.

An interesting post on the icrossing blog uses the example of Dixons to show that the move online is the right decision, but mentions how Dixons bought and integrated online photo service Pixmania and the search and affiliate expertise it had.

And that’s where I think Woolworths could very well fall down.

No-one has stated, or even managed to suggest, what the belief will be – and ‘The Bankruptcy of the Non-Descript‘ is what I believe caused the collapse of Woolworths, Zavvi and MFI. (Just realised I’ve restated Mark Earl’s ‘Purpose Idea’ from the other angle.)

Sadly the awesome Brand Tags doesn’t include Woolies. But I doubt entertainment would be first on the list. It’s Pic’n’Mix in both sweets and belief. A ‘five and dime‘ store with sweets, entertainment, furnishings, cookware, pens and paper and other random stuff.

That has a benefit offline, should you need a selection of random stuff, and not want to wander round a larger department store, or go for the clear low cost of Poundland. And if you’re of a certain age, you could meet with your friends and have a cup of coffee.

But online we already have Tesco and Argos. And anything is just a click away.

And in entertainment, Woolies is facing Amazon, iTunes and a music industry that is struggling to workout what it should do to survive.

And those loyal customers who used it as a meeting place are likely to have already found online alternatives – and if they’re not online yet, the prospect of Woolworths won’t make them buy a new PC and broadband.

But maybe there is a loyal niche group who could find a solution – there’s a small group on Facebook discussing it, even if the dreaded brand word crops up too much for my liking.

And I like the fact the Woolworths site is currently displaying a form for comments on the good and bad about the business. Even if the reassurance it’s returning is a bit naff. ‘I haven’t shopped since Woolworths closed’, a man sobbed.

But whether Woolworths becomes something really different and cool with a purpose that makes sense, or collapses for a second time in a supernova of pic’n’mix, it’s going to be fascinating to watch.

The Bankruptcy of the Non-Descript

So far we’ve lost Woolworths, MFI and  Zavvi, while Whittards has been bought by a private equity firm after going into administration.

At least MFI and Zavvi still have websites notifying people of their current status – Woolworths has: ‘Our site is currently undergoing essential maintenance. We apologise for any inconvenience caused.  Please check back later.’

What’s interesting is that there are various reasons for the first three disappearing – the problems with the music industry, the downturn in the housing market, a drop in consumer spending etc.  And despite the possibility of a buyer for Woolworths, there’s nothing happening fast. Meanwhile Whittards was snapped up quickly.

Which makes me think this could be the start of something I’m going to call:

The Bankruptcy of the Non-Descript:

In Case of Bankruptcy, Please Help Yourself - by Noaz. on Flickr

In Case of Bankruptcy, Please Help Yourself - by Noaz. on Flickr

Put simply, Woolies, Zavvi and MFI all had a problem, in that they didn’t have a clear belief and description. Woolies started as an American ‘five and dime‘ store – but mutated over the years, leaving Poundland as the modern equivalent. (I’m not linking to the Poundland site due to the annoying auto-playing explosion that just burst my eardrums!). In the end, Woolies was a strange amalgamation of Pic’n’mix sweets, entertainment, soft furnishings etc.

Zavvi came out of a management buy-out of former Virgin Megastores, and at the time left a lot of people asking friends what had happened. Apparently the aim was to be different from competitors by having ‘exclusive and limited edition products in the future’. An aim buried in a wikipedia entry, and an interview in industry publication MCV.

MFI had all sorts of problems, but most importantly, look at who it’s up against – Ikea. I’d guess most people already know what the Swedish success story stands for, but if not, try here, and here. Functional, well -designed furniture that everyone can afford, with Swedish names, Swedish food stores, and bargain hotdogs at the end of the trip.  My girlfriend has been known to forcibly demand Ikea trips to placate her homesickness for Sweden!

I may have had similar excitement at the sight of a Marks and Spencers are months without a sausage roll or pork pie in the U.S, but can you imagine curing your homesickness with a trip to Zavvi or MFI? Even Woolworths?

This isn’t about having a national identity – it’s about having a distinct belief and identity that everyone can clearly understand, and that people can align themselves with.

This isn’t an absolute rule:

I’m not going to say that having a belief will ensure success, or that you won’t make it through 2009 without one – there are far too many other factors involved, from changes in consumer spending to Government bailouts.

But I do think that within each industry and category, we’ll see a greater survival rate for the companies we can believe in.

So I’m going to start tracking what happens, and I’d appreciate your help. It may become a wiki page, but for the moment I’d just ask you to let me know in the comments if you see companies going under, and whether they had a clear belief or not.