Blockbuster didn’t adapt fast enough for an industry in flux. Credit unions can learn from the retailer's mistakes.
A stagnant business won’t last long. New products, delivery channels, and marketing initiatives are born every quarter, and businesses that fail to evolve (or evolve fast enough) fall.
An article in the Oct. 11 issue of Time details the demise of Blockbuster Video, a stalwart of strip malls everywhere. The company filed for bankruptcy on Sept. 23.
The financial services industry is constantly redefining itself. Changes in areas such as mobile banking and compliance require credit unions to spot emerging trends rather than wait for them to mature. Highlights from the Time story illustrate the importance of being ahead of the curve (or at least recognizing when a new way of doing things makes sense).
- “Heck, Netflix was operating for six years before Blockbuster launched its own movie-by-mail service.”
Here’s a perfect example. Blockbuster waited to see the viability of the model before getting involved. It should have kept better watch on its competitors. By the time Blockbuster realized it, Netflix’s foothold was too strong.
- “Blockbuster introduced a flat monthly rental fee, but unlike Netflix, it continued to charge late fees.”
Even when Blockbuster did adapt, it held to a tired practice, which is attributable to overconfidence. Even when Blockbuster explored the new model, it clung to something that not only reflected an old model but also alienated customers.
Credit unions have to look ahead and around to see what matters to members. Developments in the field that generate results demand study and, if appropriate, adoption. Go back to mobile banking. Every credit union should have this service or a plan to integrate it soon. With the prevalence of smartphones, the percentage of people who use phones for banking will only grow.
Obvioulsy, coming up with a great idea in-house is the best-case scenario, but it’s not always possible. A keen eye on the market and its thought leaders will ensure a credit union's long-term viability.