Companies are dying faster than ever before. Covid-19 as a Black Swan event is only accelerating it. To survive, they must define their business by a lasting benefit they bring to the world. This series — part of our Do or Die project — explores Indian companies we think might be next. We examine how a business is doing against the most common causes of company death, and how redefining their business could help. Read more about Do or Die here.
Why we’re watching them
Covid-19 is a Darwinian moment for the retail industry. According to a McKinsey report on the State of Fashion, 80% of publicly listed firms will be in financial distress if stores are shut for 2 months.
For Raymond, which has been helping men suit up since 1925, sales in its core textiles and apparels business were slowing even before the pandemic hit.
Athleisure and ethnic wear have steadily been expanding its share of the 'modern gentleman's’ wardrobe. And Raymond, known for its work and formal wear has struggled to keep pace.
Its iconic brand ethos of ‘The Complete Man’ has become dated over time. As former CEO, Sanjay Behl once said, “Somewhere as a brand, we were getting older in a country that was getting younger and missed an entire generation of customers.” Neither does it support the brand’s extension into women’s wear and home textiles.
Like most retail brands, the digital experience was an after-thought. The focus instead was on expanding and upgrading its physical presence across 20,000 POS touchpoints in 650 cities including 1,500 stores across formats.
With Covid forcing a reset, Raymond needs a cohesive business definition and clear point of view on which customers it wants to serve to focus action and innovation going forward.
The business they’re in, in their own words: “a unique and compelling lifestyle brand.”
Death factor analysis:
We identify organizations to watch based on how well they’re preparing against internal and external death factors.
Here’s how Raymond did against each death factor in our analysis:
Failure to adapt to shifts in technology: Is the company incorporating or evolving based on key technological changes affecting its industry? Somewhat. There will be a place for stores, but they will need to be personal and exceptional. MyRaymond.com will be need to be more than just another sales channel. It will need to offer recommendations that are tailored to preferences and smart online sizing to ensure its digital experience complements its physical one.
Failure to adapt to shifts in customer needs: Has the company evolved to meet changes in customer needs or cultural shifts? No. As Covid transforms work and life, the company is caught between its legacy and cultural relevance. Between suiting up and dressing down. Raymond will need to redefine itself for the ‘modern gentleman’ who identifies more with comfort than formality to offer a complete wardrobe solution.
Failure to anticipate competitive threats: Is the company prepared to adapt to new disruptors in the market? No. Disruptors like Bombay Shirt Company are leading the way on online customisation with a no-inventory, no-waste model. While Beardo and Bhaane have identified niche sub-cultures and built a community of loyal followers for their products.
Failure to act on a vision: Has the company identified a clear, authentic and generous purpose and has taken steps in service of that purpose? No. Being “a unique and compelling lifestyle brand” isn’t specific enough to truly drive differentiation and long term loyalty, or to be galvanizing in providing a north star for product or experience innovation.
Failure to focus: Does the company offer a cohesive portfolio of offerings that ladder to its vision? Somewhat. It will take more than 'style' to justify a purchase in an era of cautious consumption. Those at the top end of the spectrum are likely to, at least for the time being, adopt the “fewer, but better things” mantra that feels more responsible given the state of the world today.
Failure to let go of legacy assets: Has the company optimized its assets based on its vision and on external market changes? Somewhat. Raymond has repurposed its factories to create PPE for health workers. However, it’s unclear whether Raymond is planning ahead to be a frontrunner on responsible fashion, digital experience and innovation across the value chain.
How redefining the business they’re in can help
Reorienting the business around a clear benefit they bring to the world can help Raymond reinvent their model, experience, portfolio and brand to not just survive but thrive.
Covid has wreaked havoc on many brands and businesses. And it might feel like a challenge to figure out what to do next. Do or Die is our modern survival-skills platform for leadership teams seeking to drive growth and ensure longevity in this unprecedented time of disruption. We guide leaders through a structured framework that takes a holistic view of the business to align on a Northstar that drives decisions and action. For more information, write to us at hello@studiojigsaw.com
