GrabOne’s recent slide into receivership is the latest in a series of shutdowns of Kiwi brands facing stiff competition from online rivals and better resourced overseas businesses.
The deal website’s demise follows big names which have disappeared from our high streets, including Smiths City, Smith and Caughey’s and, earlier, kids’ clothing chain Pumpkin Patch.
Looking back at Kiwi businesses that have died – watch on TVNZ+
There have also been brands merged or renamed – ANZ and National Bank came together in 2012, and supermarket Foodtown rebranded as Countdown in the late 2000s, later to rebrand again as Woolworths.
So are there common reasons why some companies have struggled or needed to reinvent themselves?
Bodo Lang, Massey University’s Professor of Marketing Analytics, said there are several drivers, with the novelty factor and a lack of innovation often at the forefront. Though he said Kiwi companies can also be at a disadvantage from the outset against international firms with more funding and better access to market information.
Lang said novelty was a big driver in GrabOne’s initial success: “The service was on everyone’s mind, discussed around the dinner table. It was an exciting new thing offering exciting new services and experiences.”
It provided a new found accessibility to a vast number of products, categories and brands which appealed to the consumer. But Lang cautioned against a business model reliant on novelty, saying: “It wears off soon enough. Without innovation you don’t retain or grow your customer base.”
Lang addeed: “If you have a customer base of 100,000 people and lose 10-20% of that yearly, without strategic advertising incentives how will you get new customers?
“I don’t recall seeing any GrabOne advertising at all in the last few years. The site’s strategy was outdated, they relied on a ‘down to earth’ email based strategy.
“This might have worked well 20-years-ago but these days with the reach of social media, consumers receive thousands of messages daily.”
Creativity, innovation, forward-thinking
GrabOne is not the only company that faced adversity through lack of innovation, according to Lang.
Department stores Smith and Caughey’s in Auckland, Kirkaldie and Stains in Wellington and H&J Smith in the South Island were all NZ institutions which emphasised pride in heritage and tradition. And they have all recently hit the buffers as times have moved on.
Tony Caughey said there were about “half-a-dozen” reasons for the proposal. (Source: Breakfast)
“With the rise of online retailing and ultra-cheap creations coming from the near-East countries, it is hard to maintain a premium-price department store,” Lang said.
Another recent casualty is appliance store chain Smiths City, which closed its doors this year.
Christchurch-founded entity closes doors while administrators assess the books. (Source: 1News)
Consumers are moving more and more to shopping entirely online, Lang said. And the technology changes won’t stop, with AI set to increasingly play a part as a “super-technology that has the potential to disrupt whole economies”.
However, keeping an emphasis on human creativity, innovation and co-operation with emerging technologies offers hope for the future for Kiwi businesses hoping to survive more turbulent economic times, Lang said.
Looking back at Kiwi businesses that have died – watch on TVNZ+
