Bankrupt Debenhams, Arcadia and drowning Odeon all failed for the same reason

Ten years ago, there was a Debenhams in nearly every town centre in England. Each little department sold virtually identical items for varying prices. Certainly, those other bastions of the high street, Topshop, Dorothy Perkins, Oasis, Burton Menswear, Evans, Outfit and Wallis were an impervious wall of shop after shop selling identical products for identical prices.

This article first published December 2020; I wrote this for another website but thought you might find the analysis interesting.

Odeon, of course, is a cinema chain, and at their core, they are selling an experience.

All these businesses are either failing or in administration. And in each case, the same reason is at play.

Let me explain.

In 2006, when I walked down the high street, I largely didn’t need to go in every shop because they all sold the same stuff. Even now, every year, the high street picks a handful of “trends”, synchronizes them and puts out clothes, shoes and bags that follow the same trend as each other. The following year, they all switch to another one.

In the heady days before the Internet truly took hold, they used to do rather well out of this. We had to make time to go to the shops, and walk down the streets lined with store after store peddling the same stuff under different shop labels. We fooled ourselves into thinking Dorothy Perkins was better than Wallis or vice versa, depending on what brand message they were giving out, but largely, when you got through the doors of any given shop, they all sold the same stuff.

We didn’t really know there was an alternative.

Cinemas were the same. They all put on the same films, sold tickets for a bit more than an hour’s work (at minimum wage), sold popcorn for about the price of a ticket, and drinks for the same, and woe betide you if you wanted to drop serious dollahs on about a spoonful of ice cream, sold with a tiny toothpick to eat it with so you didn’t realize you’d just been ripped off. Except we knew. We always knew we were being fleeced at the cinema. It was part of the trade-off. You could see the latest movie in exchange for being robbed if you wanted to eat or drink inferior F&B for the next three hours.

There was no other way to see new films.

Now, however, the edict has come for us to all stay indoors. Most of this year has passed in a blur of shuffling around the house in casualwear and not getting much work done because, let’s face it, finding the baby’s favourite toy is far more interesting than finishing that Excel spreadsheet.

We are all barely getting by, and many of us are on a fraction of the money we earned last year. We are shopping more carefully. I took four months to decide whether to buy a lemon tree or not, despite knowing I wanted one.

For the longest time, the Arcadia group and Debenhams have got by on in-store sales. In fact, their websites are downright shoddy and not really fit for purpose. The Debenhams website is painfully slow, it hasn’t changed since about 2011, and the search function is hopeless. The photos are bad enough that they belong in an old 90s catalogue. And the prices of their stuff are laughable.

The Topshop website is so awful I’ve never actually successfully completed a purchase on there. Or even been able to find what I was looking for. Most of their range doesn’t seem to be buyable online. Are they trying to create mystique? All they’ve done is made me roll my eyes and leave their site while I was in a buying mindset. Which meant I went to ASOS.

Can you imagine the staggering arrogance of a company who drives customers away while they’re ready to buy something?

Arcadia and Debenhams are suffering from the same malady. They are targeting middle class spenders, people who pay full price for things, but they don’t actually sell what middle class spenders want to buy these days. And they haven’t bothered finding out. They are just following the same formula they always have, and hope that if they ignore that newfangled Internet it will go away soon. I imagine it must be very frustrating to work in their IT or marketing departments, because it’s where ideas go to die.

I imagine the gaslight companies felt the same when electricity arrived. They’re all defunct, now, too, except those who pivoted.

And Odeon… well they’re nothing like Blockbuster. We used to rent videos for movie night. It was actually a better model than what followed, which was ten years of people buying DVDs every time they wanted to watch something, but then the last five years or so, streaming has taken over and our shelves are mercifully bare again. Blockbuster had a damn good business model and got phased out by tech.

Odeon, and other cinemas? Their business model is laughable. They’re charging middle class prices to middle class people for an experience that best resembles the last thing most people want to do on a Friday or Saturday night. Let’s break it down. Unless you really want to see a particular film, why would you subject yourself to this misery:

  1. The car parks are insufficient for the number of people these days who drive, or their car sizes. Then they introduced a pathetic “Max stay 4 hours” on many car parks outside cinemas. There goes watching the Lord of the Rings Extended Edition. Or getting a meal after a regular film.
  2. The tickets are too expensive for the fact you’re then corralled into a dark room and squashed into a seat row, having to displace acres of people if you need the loo. Like, I could get a plane ticket for less and be about as comfortable. And on a plane, there’s at-seat service of drinks, the seat reclines, and you get a tray table to put your food on. Oh and you also end up somewhere more interesting than where you started. When you leave a cinema, you end up in a cinema car park which is not interesting at all.
  3. The food (if I can call it that) is a joke. Designed to be as easy to clean up and nutritionally devoid as possible, half the time it’s actually soggy these days. The drinks come in roughly four miserable options. It also costs roughly the price of a cinema ticket. For the price of a reasonably-sized packet of popcorn and a coke I could alternatively have a Domino’s pizza. Without a discount pizza coupon. Or an Indian takeaway. Or a main course at Nando’s. Or Bella Italia…
  4. The rules are too strict. Why would people pay this much money to put shoes on and be somewhere that they’re not allowed to talk or check their phone, and where they can’t bring in their own food and drinks, when they could just be at home instead, where there’s an abundance of their favourite food and they can put their feet up?
  5. The adverts go on forever and they’re really obnoxious. Usually we find turning up about 30 minutes after the allotted start time is best. When you’ve fleeced customers, telling them you also need to waste their time while you run adverts to a captive audience to keep your business afloat is just double-dipping.
  6. People can’t pause it when they need the toilet. Or watch it on their phone while they do something else. When your only selling point is “big screen” then you’ve filled a room with seats so the people at the back may as well be watching on their phones, you’re not thinking about the customer.

If Odeon’s business model was sound, they wouldn’t be threatened by streaming films, because they’d be confident they provided a better experience. But they don’t. They know their experience is crap and not even slightly customer-centric.

Overall, then, just like Arcadia and Debenhams signal the slide into obscurity of outdated and overpriced retail tat, the current issues with Odeon demonstrate that, in order to attract the people with money, instead of just a dwindling pool of superfans, you have to do better. You have to provide a good experience and update it regularly to move with the times.

Next to go will be the ultra-high-budget blockbusters that delude themselves into thinking they’re worth the cinema ticket price because people get about as much entertainment out of watching a twenty-year-old put on makeup in their bedroom.

If your business can be replaced by the Internet, you weren’t that good to start with. It’s harsh but true. Is this a business lesson you can take forward into your own business? Let me know in the comments.

One response to “Bankrupt Debenhams, Arcadia and drowning Odeon all failed for the same reason”

  1. […] Bankrupt Debenhams, Arcadia and drowning Odeon all failed for the same reason […]

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