I watched with great fascination the HBO Documentary Schmatta – Rags To Riches To Rags the other night, a telling film about the rise and fall of the garment industry in the US and specifically New York.
There were a number of interesting facts, but chief among them, the fact that during the Kennedy years, 95% of all garments in the US were US made. Today, only 5%. And the industry has all but collapsed. Not only does one struggle to find the union label but the union employee as well.
A cautionary tale, to be sure.
But it’s not just the garment industry that has run the risk of commoditization taking industries with it. For a couple of years, it seemed every day a spam email would come in offering offshore SEO services because they were ultimately cheaper. And by ultimately, what I mean is exponentially.
In the recent AdAge article How EBay Is Winning With Bid to Enhance the Customer Experience author Natalie Zmuda essentially points out that in only a few short years the market has changed so much as to turn the machine that commoditized retail into a commodity itself, one that struggles to compete with the likes of Amazon, Zappos and others who have more capably succeeded chasing the lowest price every day.
A focus on price and price alone is fraught with risk that extends, far, far beyond retail. And in the descent from 95% to 5% share, management teams change and CEOs come and go.
New managers seek to make their mark within their first 100 days. Even US presidents are measured by their first 100 days. In creating impact, we most often seek to create efficiencies but the net result may, in the long-term, prove little more than a commodity.
Just ask ebay. Or the schmatta industry.
In the end, the cost may prove significantly more than the lowest price every day.
As marketers, we need to be aware of that. Not simply for our clients. But for ourselves as well.
Have a good one.
~ S
