X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

Love was once a Game store

Business Maverick

AFTER THE BELL

Love was once a Game store

When Makro, Game and Builders Warehouse were popular you got an overwhelming sense of two things: big stores, and cheap. (Photo: Nadine Hutton / Bloomberg via Getty Images)
By Tim Cohen
03 Aug 2022 1

Being in love: Isn’t it the best thing? There is only one thing better – staying in love. Love is blind, so they say. But being married is a real eye-opener.

One of my favourite stand-up comics on the subject of love and marriage is Rita Rudner, who once said: “I think men who have a pierced ear are better prepared for marriage. They’ve experienced pain and bought jewellery.” 

Another one of her gags is: “I love being married. It’s so great to find one special person you want to annoy for the rest of your life.” And, slightly ironically, she has been married to the same person for more than 30 years, despite commenting once that, in Hollywood, a marriage is judged a success if it outlasts the milk.

I’ve been thinking about love and retailers recently, because I struggle to understand why people fall out of love with their shopping destinations. 

Two sets of stores in South Africa were once dearly loved, but now are not: Edgars and Massmart. In both cases, it’s very hard to track where exactly management went wrong, and why subsequent management haven’t been able to fix it. 

Read more in Daily Maverick: “Something just Clicked: Lessons to be learnt from giving the people what they want

Massmart has just released its interim results, which indicate that the store is getting very slightly better in absolute terms, but is showing very little of the bounce-back of other retailers following the Covid decline.

It’s not as though either Edgars or Massmart have had terrible management – on the contrary. To the extent that you can judge from the outside, management in both cases has been decisive, creative and determined to fix the problems.

Perhaps the easiest way to understand it is to understand why people fall in love with brands in the first place. 

Now you have to be a bit careful here, because there is more rubbish spouted in the world about brands than there is about the concept of love.  

American branding author Seth Godin once said: “Marketing is no longer about the stuff you make, but about the stories you tell.” Well, you know, everybody loves a good story, but surely we should also want the product. Don’t you think? Maybe?

On the internet I found what I think is a good explanation for why people fall in love and stay in love with brands, written a couple of years ago by ad agency exec Kendra Lively working for a US agency called Phase 3.  

She said, like the four chambers of the heart, there are four reasons people fall in love with brands: brands make us more of who we are; brands say what we don’t have the words for; brands are reliable partners; and brands give us a reason to stay committed.

If you think of Apple, for example, there is lots of identity in the products, which you can’t quite describe, and the products are reliable and keep getting better. Simple. The result is that people are prepared to pay enormous margins for Apple products – way above the competition.

Now apply that in reverse to Massmart, and I suspect you might start to get a sense of why the stores are struggling.

Read more in Daily Maverick: “Massmart puts on a brave front in the face of 2021 financial misfortune 

Massmart consists mainly of three sets of stores: Makro, Game and Builders Warehouse. When they were popular – and that really wasn’t long ago – you got an overwhelming sense of two things: big stores, and cheap. In other words, the service was good value and they had a broad variety because the stores were big enough to hold a huge range of products.

My sense is that during its halcyon days, management started to lose focus. I know that’s a terrible thing to say in retrospect. But the company started expanding both vertically and horizontally into new geographies around the continent, new types of stores, including Cambridge Food and Rhino, and new product lines like groceries in Game stores.

Yet it came under attack from all directions: from above with lots of specialist sellers of white goods; from the sides with South Africa’s existing retailers just offering better product lines, and from below with availability sprouting everywhere on the internet. 

Massmart has its own flourishing internet division but, of course, for an existing retailer this is a double-edged sword. Everything you sell on the internet effectively makes all of the rent you pay on those huge stores slightly less worthwhile.


Visit Daily Maverick’s home page for more news, analysis and investigations


It’s worth noting, too, that the things which have hurt retail over the past few years have hurt Massmart more. Lots of supermarkets were looted, but they were able to recover faster because stock turnover in a supermarket is just naturally faster than stock turnover in a white-goods store. 

Covid also helped the big internet players just at the moment when physical shopping was beginning to fade.

The approach of Mitch Slape, the fairly new group CEO imported from the US parent WalMart, is really unimpeachable: stabilise, focus, invest, he preaches to the investment community. And the company is palpably moving down this track. But you have to say, they’re looking down a long road. 

WalMart invested R17-billion for 51% of the company in 2010; the total value of the company is now about R7.4-billion, and it is sitting on a debt of R16-billion.

Amazon CEO Jeff Bezos once said that “your brand is what other people say about you when you’re not in the room”. I suspect what people are saying when Massmart execs are not in the room is that this is the last-chance saloon. BM/DM

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

All Comments 1

  • Major international, or even national traders, like Massmart, or even locally based operations, like Tiger Brands all seem to make the same mistake when they make major investments or acquisitions of once very successful smaller businesses. They see the success, they invest, and then they restructure according to their own supposedly successful business plan. They enforce their systems, their norms, and in doing so kill the soul of the businesses they buy, they just become profit centres governed by financial returns. This really applies to the case of Game. The original concept when Game was launched involved it’s people, it had a back story that appealed to the public, it backed up it’s promises and it delivered a fun shopping experience. Now, there are numerous Game Stores, many very badly managed and understaffed, sales people lack motivation, in locations where no Game store should ever have been envisaged in the first place. Many of these underperforming ill conceived stores have now been closed, but the damage they have done to the Game brand is huge.
    Massmart and other major corporations must understand that buying out a local successfully trading business, with loyal customer support, and then cloning it to fall into line with their “profit before people” system is the real reason they fail. Revisit the original Game ethos, re-intoduce the fun shopping experience, stop imposing, start renewing the fun experience of shopping the original Game stores provided.

Please peer review 3 community comments before your comment can be posted