Whenever a previously healthy category goes into what looks like terminal decline it is often because consumer trends have mutated the drivers. It does not necessarily mean the category itself is actually dead. The issue that lies at the heart of this problem is that too few retailers really understand their competitive position – the context in which they are playing.
Our obsession with numbers means we have become overly obsessed with systems outputs in the form of internal key performance indicators (KPIs).
These numbers can make us look like we are doing incredibly well at maximising sales and profits, right up to the point where we reach the edge of the cliff and fall off it.
Without constant external validation of the competitive context, consumer context, category context, and an independent assessment of our own retail businesses, we cannot be clear about how we are truly performing and how sustainable that performance is under our existing strategies and tactics.
This is also the case with categories.
Categories need to be regularly examined within the consumer and competitive context of total consumption to see where they fit strategically in the choices available to all consumers.
More often than not, when examined this way the dark clouds often have a silver lining. As Bernard Arnault is fond of saying “A good product can last forever”.
The critical issues generally lie in the areas of marketing and packaging that keep products and businesses relevant – and relevance is determined by context.
In the disposable society that we live in today, too many people are too eager to write off products, businesses, and even categories without really understanding what is going on.
Department stores are a classic case in point.
While the saying “It’s always darkest before the dawn” is too glib for this argument, creative strategic thinking can give life to new opportunity. To quote Bernard Arnault again, “You have to build on heritage”. Your past success is an asset as long as you are prepared to adapt to survive and prosper.
The markets we face are turbulent and challenging. Unbridled pessimism is as constraining as unbridled optimism.
But before you do something that can’t be undone, take a moment to do the due diligence that could help you uncover your silver lining. You can out think and out manoeuvre your competitors and rebuild success often with less drastic surgery than you might believe.
Peter James Ryan is head of Red Communication. He can be contacted on (02) 9481 7215 or at www.redcommunication.com
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