Sears and Kmart seem to be among the losers, with the announcement that they will be shuttering stores across the country. Will we lose these venerable names to the dustbin of business history? Possibly, and they would join a decidedly non-illustrious group.
While attention is paid on the failure rate of small and start-up businesses, as noted in this recent blog post, there is also a continuing churn at the top of the corporate heap:
Comparing the Fortune 500 companies in 1955 and 2011, there are only 67 companies that appear in both lists. In other words, only 13.4% of the Fortune 500 companies in 1955 were still on the list 56 years later in 2011, and almost 87% of the companies have either gone bankrupt, merged, gone private, or still exist but have fallen from the top Fortune 500 companies (ranked by gross revenue). Most of the companies on the list in 1955 are unrecognizable, forgotten companies today. That's a lot of churning and creative destruction, and it's probably safe to say that many of today's Fortune 500 companies will be replaced by new companies in new industries over the next 56 years.
Along with Sears and Kmart, Best Buy seems to be jumping the shark as well. This Forbes story tells a tale that is all too familiar to customers, but seems to continually escape notice of those leading these sinking ships. In nearly all cases, the operators lose touch with the customers...and start selling what they want, rather than what the customer wants or needs.
Smaller business owners have a natural advantage over these behemoths, in that they are closer to their customers, but, alas, often suffer the same "buy what I have" rather than "sell what you want" mentality.
It's the customer who decides your businesses fate. Engaging yours in an active dialog about their wants and needs is the single best thing you can do to grow your business.