Customer-Driven Disruption

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CUSTOMERS DRIVE DISRUPTION

FILENE’S BASEMENT WAS A Boston institution—tourists even came to watch customers digging through the messy bins of designer clothes. Famous for its markdowns that increased by 25% each week, Filene’s Basement was the first discount retailer in the country to focus on high-end clothes. At its Running of the Brides events, excited women searched for bargain-priced wedding gowns. But most of the customers were boomers and Generation Xers and, by 2011, the famous bargain basement closed forever, like many other department stores around the country. Though people blame Amazon and online retailing for the demise of these once popular stores, the real reason is that customers’ needs are changing and department stores don’t ...