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Is Your Company Adaptable? Is Your Messaging Relevant?
Capitalism and Darwinism arose about the same time in human history. Prior to the industrialization of the 1800’s, the world had a subsistence-based agrarian culture. Barter was the principle means of exchange. The chicken farmer paid the blacksmith in eggs for his horse’s new shoes. No one had any need to compete with anyone else. What would be the point of competing? There was nothing to win.
Industrialization brought huge production capability and the possibility of oversupply. The most efficient producer had the potential to win the greatest share of business by producing the most product at the lowest cost. Survival of the fittest in industry began. The largest, most efficient companies survived and others fell by the wayside.
Today the developed world enjoys a proliferation of products produced and sold by large numbers of companies – from original source factories selling direct to branded goods offering value added. Competition for consumer dollars is fierce and exists in part because of the multitude of distribution avenues bringing goods to those consumers. Different channels and different stores within those channels bring consumers with them and they partition those consumers through positioning, pricing, convenience, status, etc.
But what happens if some or many of those channels fail? What if some of them go away? Prestige products formerly sold through upstairs department stores don’t fare well when sold in the context of economy distribution. There isn’t enough space for specialty products in general retail. Online stores carry everything , but how many products fit on that first page?
It is likely that the next year or two will see some key distribution partners fail. Sears, JC Penney, Macy’s, Neiman-Marcus and Bed, Bath & Beyond are all struggling and some may not survive. If they represent a significant portion of your distribution, you may not survive. What to do? We have two recommendations:
First, examine your vulnerability by examining your sales by channel and key retailer. Don’t look just at total unit or dollar sales but look at which products you sell where and why and then ask what portion of your at-risk product sales can be funneled into channels and stores you are confident will survive.
Second, focus on making your products sell themselves. There is no question that the thinning of retail opportunities will bring a thinning of product opportunities. Products will need to position and sell themselves. Everything about the product from the look and feel of it to the colors, features, pricing, packaging, etc. must be right. The new perspective shouldn’t be how do I sell it into Macy’s, it should be how do I sell it to the consumer.
Based on our research looking at products, packaging and social media, your products have to speak for themselves. You need to know what the most important features and benefits are and your products need to feature them prominently – if not through images of the product then through messages on the packaging and through social media.
This sounds obvious but it’s not. Most competitive products have the same features, but the mere presence of a feature doesn’t guarantee that it is important. A few months ago we completed a study on credit card selection for a major bank. Credit cards don’t have many features and our client was confident that they knew which features mattered most. Our research showed that one specific feature that the bank took for granted was the single most important factor in the selection of a card. Our client adapted an ad campaign around that feature. Our research was supported when a major competitor of our client launched a new ad campaign at the SuperBowl with that same feature presented first and foremost in the commercial. We got it right for our client on something that didn’t seem important.
Messaging matters. Getting it right matters now more than ever when products need to stand for themselves. Let us help you to make sure your messaging is relevant and compelling.