On Monday, longtime Midwest retailer, American TV announced that it would be closing its doors for good ending nearly 1000 jobs over multiple locations.  Doug Reuhl, President and CEO, declared an “unforgiving economy” as one of the issues for its (American’s) demise.  The interweb lit up with comments ranging from reflection of a longtime Wisconsin icon closing, to past sales experience and finally blame.  Most appeared to be shocked at the closure.  Some blamed the political climate while others cited the internet as the culprit.

Here’s the reality: American TV was a “dead man walking” for over the past decade.  The economy or the internet may have sped up the process, but the appliance and furniture retailer actually checked out in the late 90’s and early 2000’s.  In the end it was either their inability or unwillingness to compete in a rapidly changing retail world that did them in.  No amount of nostalgia or wishful thinking could save them.

There was a time when American was groundbreaking.  Crazy TV Lenny launched outrageous ad campaigns that gained attention of the masses when four channels of television was the only game in town.  I know countless friends and family who’s first bike came with a VCR from American (or the other way around).  In the 80’s and early 90’s American developed the price check technology which allowed people to compare product costs in store.  The customer could see right there they were getting the best deal.  American competed on price and it competed hard.  They were one of the first big box retailers in the area and gave many mom and pop electronics shops fits.

The Times They are ‘a Changin’

American was built on price not service.  When the marketplace began getting crowded with the likes of Best Buy and Circuit City the chinks in the armor began showing through.  This was the pre-internet heyday when you still had to go to the store to get what you want.  Best Buy and Circuit City offered comparable choices for a good value.  In some cases the service was even better.  While it was affected by increased competition, American was still able to hold its own.  Then came the internet.  It wasn’t until the late-2000’s that eCommerce started to gain traction but by 2009 all other big box retailers had better online sites that allowed the customer to purchase and have it shipped.  Other sites like Amazon began pounding the final nail in the coffin as more consumers used the bricks and mortar for viewing then raced home to save an additional $100 and get free shipping direct to the house.

What Can Be Learned

American like many other companies before it failed to embrace the change that was taking place.  Maybe they stuck their head in the sand and hoped it was just a bad dream, or maybe they realize that by competing on price for so long they had created an impossible hole to dig themselves out from.  Either way, the spark that made American TV what it was during its successful years was gone.  That is a failure of leadership, not the economy.

For businesses to thrive in today’s world they need to always strive to be the best.  Yet many are happy being complacent until the climate changes then hope they can turn things around before it is to late.  American’s fate also highlights the dangers of competing on price.  There will always be someone to find a way to do it cheaper.  When you gain the reputation as the low cost leader, there is no place to go but down.

• Always be innovative
• Take calculated risks
• Never settle
• Create an experience model
• Reward excellence

Virtually every company has the potential to continue for generations.  American’s opportunity passed it by and its leaders failed to take the risks necessary to save a once great brand.  So if you are going to blame anything for American’s end, blame comfort and complacency.