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5 iconic brands that couldn’t keep up with digital disruption

"you better start swimming or you'll sink like a stone..."

Digital disruption has affected organisations all over the world. For some, it's been the making of them (Uber, Facebook, Airbnb), for other's it's been their death knell. 

Here are five companies that once ruled the roost, but failed to adapt to the demands of rapidly advancing technology and the new world of work. 

 

1. Blockbuster

The film and video game rental company was founded in Texas back in 1985. The firm hit its peak in 2004 with more than 60,000 staff across 25 countries but collapsed quickly – mainly thanks to the rapid rise of Netflix and LoveFilm. A chunk of their profits also came from late fees – something that would evaporate when it finally attempted to go digital. It filed for bankruptcy just six years on from its dizzy heights. By Christmas 2013, there wasn't a Blockbuster store left in the UK. 

At their peak: Blockbuster boasted a $5bn market value in 2004.

Who replaced them? Netflix reached revenues of over $6bn in 2015. It's probably also worth noting that Blockbuster were offered Netflix as a fledgeling DVD subscription service back in 2000, but baulked at the $50m price tag. 

 

2. HMV

The iconic UK entertainment retailer opened its first store on Oxford Street all the way back in 1921. It fended off competition from Our Price and Virgin Megastores to become the UK's leading specialist music retailer, enjoying growth for three straight decades until the 2000s. But by 2012, Amazon had stolen its crown, while online streaming services like Spotify continued to mercilessly drain the record industry's profits as a whole. In 2013, they entered administration. 

At their peak: HMV floated on the stock market in 2002 for a £1bn valuation. When it went into administration, it was valued at just £15m. 

Who replaced them? Amazon is now the UK’s biggest entertainment retailer, recording sales of more than $5bn in 2014. 

 

3. Clinton’s

Clinton Cards was founded in 1968 by the late Don Lewin. Greeting cards were once rumoured to be the most profitable product on the high street (retail insiders suggested a £3 card could cost Clinton’s as little as 30p to buy from a manufacturer), but by 2012 it had ignored the threat of email and e-cards. Their mantra “birthdays and anniversaries never go out fashion” was still right, but the way people once celebrated them definitely had. What’s more, their business model of dominating high streets with multiple stores and buying out its competition was outmoded by the late 2000s.  By the time it had launched its own e-card side of the business, it was too little too late. 

At their peak: owning more than 1,000 stores, Clinton’s once controlled 25 per cent of the greeting card market.

Who replaced them? Clinton’s is now run by American Greetings (the world’s biggest greetings card firm), but online retailers like Funky Pigeon and Moonpig dominate the UK personalised greetings card market.

 

4. Borders

The book and music retailer once boasted more than 1,000 stores and 36,000 employees worldwide. They were founded in the early 70s, and by 2003 had reached profits of around £64m. But by 2007, the company was already downsizing its operations abroad in an effort to consolidate business at home. In 2011, the now-bankrupt company was purchased by Barnes & Noble, having not made a profit since 2006. Like so many other companies, the ruthlessly fierce competition of Amazon was a big contributing factor in its decline. But more broadly, it’s said that Borders, like many other bookstores, was killed by the rise of the eBook. 

At their peak: the firm enjoyed £64m of profit in 2003, having expanded business to the UK five years previously. 

Who replaced them? Like with most of the companies on this list, Amazon continues to hoover up the profits of companies who couldn’t keep up with the digital explosion. 

 

5. Kodak

Photo film company Kodak was founded in New York back in 1880. A hundred years later it was the undisputed giant of the industry, boasting two-thirds of the global market share. In the mid-2000s, the company made some belated efforts to keep up with advancing technology – they stopped sales of traditional film cameras in 2004 (as well as cutting around a fifth of its workforce), and had already designed some of the first digital cameras. But by the beginning of this decade, the rising ubiquity of smartphones and Instagram proved too much for the firm to keep up with. By 2012, it was bankrupt. Kodak is still operating, but large portions of the company have been sold off. 

At their peak: once considered the Google of its day with pioneering technology and innovative marketing, profits peaked at $16bn in 1996.

Who replaced them? The advancing quality of smartphone cameras and photo editing apps have rendered the camera largely obsolete.

 

 

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Stuart Packham
Stuart Packham

On 27 October 2016 by Stuart Packham

Stuart Packham is a Regional Director of Recruitment for IT, Change and Digital Transformation in England

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