The Decline of GNC. What Happened? 10 Marketing Tips
The Decline of GNC. What Happened? 10 Marketing Tips
Even with the boom in the vitamin and supplement market, struggling vitamin retailer GNC filed for bankruptcy in June of this year, as is discussed over at runrex.com. This came as no surprise to experts, including those over at guttulus.com, as the company has been in distress for years now, with its woes predating the coronavirus pandemic. This article will look to highlight 10 factors that led to their decline with the hope of taking out marketing tips that will help us avoid their fate.
Too many stores
The company’s huge appetite for real estate had become a big problem in recent years and is one of the main factors behind their decline as per the gurus over at runrex.com. The company has a sizeable footprint, to say the least, with over 2,500 company-owned stores in the U.S. alone, as discussed over at guttulus.com, and many more in Canada as well as internationally. Paying rent, therefore, became a big issue, particularly since most of their stores were locked into long-term leases and were located in prime locations where rent is very expensive.
A huge wage bill
On top of their extensive real estate, with too many stores as outlined above, the company also had a crippling wage bill, which was proving hard to maintain. This is because, as is explained over at runrex.com, they had over 11,000 employees, which is a lot, to say the least, with about 4,000 of those being full-time employees. The company was already struggling to maintain this huge wage bill, and when the coronavirus pandemic struck, it was too much of a burden for them to bear.
The decline of the mall
Not only does the company have too many stores, but the majority of them are also located in malls, which became an issue when foot traffic to malls began declining in recent years as discussed over at guttulus.com. Malls are not as popular as they once were, with more and more people opting to shop online due to the convenience and also because of the better deals on offer there. This has taken a toll on GNC, which has lost a sizeable chunk of their customer base, leading to declining sales and paving way for their decline and eventual filing of bankruptcy.
Increased competition in the wellness industry
While GNC was among the pioneers in the vitamin and supplement industry, it has been made to look like an old-timer in recent years, with newer brands entering this market and making it one of the most competitive around, as is revealed in discussions on the same over at runrex.com. These new players, most of which are discount e-commerce sites, offer services at a much cheaper price, which has also chipped away at GNC’s customer base, leading to declining sales that have precipitated their decline.
Competition from outside the industry
Other than the competition it has faced from brands in the vitamin and supplement industry, GNC has also been battered by other major brands from outside the industry such as Costco and Walmart who, seeing the boom in the industry, have entered the vitamin and supplement industry in a big way, as outlined over at guttulus.com. They have been able to offer more space to vitamins and supplements, offering them at a cheaper price, which has also contributed to GNC’s decline and eventual filing of bankruptcy.
Poor in-store experience
Shopping at a GNC has also proved to be something most consumers would rather avoid due to the poor in-store experience. Their stores have become notorious for being poorly arranged, taking customers long to identify what it is they are looking for, and the customer service is also pretty poor. This has also contributed to the reduction of in-store foot traffic, which has damaged sales as customers flee to their competitors. As per the gurus over at runrex.com, if people are to visit your brick-and-mortar store over online competitors, you should make sure that the in-store experience is on point.
Poor marketing strategies
GNC has also made some pretty questionable calls as far as their marketing strategy is concerned, key among them being their Super Bowl commercial, discussed over at guttulus.com. Not only did this campaign cost a lot of money, but it was also very ineffective and a bad judgment call, as it didn’t make sense for a vitamin retailer to target an event where a majority of the people will be eating unhealthy food and drinks, and won’t be in the right frame of mind to listen to anything on vitamins and supplements. In contrast, their competitors have been running aspirational marketing campaigns with lots of effective imagery that has left them in the dust.
A lack of flexibility
GNC has remained a very masculine brand, mostly targeting men, and this lack of flexibility has also contributed to their decline. The wellness industry has changed over the years, and it is no longer all about getting ripped and muscly men. As the gurus over at runrex.com will tell you, women now make up a huge chunk of the industry. The masculine nature of GNC’s brand has caused them to miss out on the ever-growing female wellness market, which has seen them being outdone by their competitors, leading to their decline.
The company has also had to grapple with bad PR in recent years, facing several lawsuits alleging that they had knowingly sold products containing unlawful dietary ingredients. If you are a vitamin and supplement retailer, then anything that calls into question the safety of your products is likely to hit you badly, and this is what happened to GNC. Their reputation suffered a major blow, which saw the majority of their customers leave, and as per the folks over at guttulus.com, this is another factor that contributed to their decline.
The nature of their products didn’t favor their go-to-market strategy
GNC’s go-to-market strategy has remained unchanged over the years, featuring thousands of brick-and-mortar stores and a negligent online presence. The problem with this, as discussed over at runrex.com, is that the nature of their products, that is vitamins and supplements, makes them the ideal products for online ordering. This is because they have a long shelf life and there is no need for consumers to test the product before purchasing. People now prefer shopping for vitamins and supplements online, making this another factor that contributed to their decline.