Success is determined within the context of competition. There is no sustained growth without fierce protection of market share. Growing and protecting marketshare has traditionally been a rear-view mirror exercise in revenue measurement rather than an exercise of measuring how products meet the consumer’s needs. Any brand can tell you their revenue performance, but far fewer can tell you how many new customers were gained or how many additional purchases of existing customers were made in the brand’s product line. The battle to grow and protect marketshare is waged through understanding and meeting consumer preferences and needs.
Growing and Protecting Market Share is one of the core elements in any Retail Digital Transformation that also includes, Brand Building and Brand Preservation, Customer Engagement, Customer Interaction Technology and Product and Customer Data Management.
In simpler times department and specialty stores provided an acceptable level of service in explaining the features and functions of products. With this, brands were forced to let much of the responsibility for product knowledge, and establishing the customer’s connection to their brand, default to stores. Through this, a connection to the brand is consummated. This connection, however, is ultimately dependent upon the experience of using the product and the consumers perception of the corporation. This experience is fundamental to building a persistent connection which determines the likelihood of making future purchases of that brand. Each interaction must support ongoing engagement before loyalty can be established. These engagements form and inform a discipline for retaining marketshare.
As a discipline, successfully growing and protecting market share is dependent upon two fundamentals:
1. Corporate integrity
- Corporate Social Responsibility
- Environmental impact
- Connecting to the consumer through brand identity
- Connecting to the consumer through product design
Today, consumers expect corporate social responsibility and environmental stewardship. They have a greater understanding of globalization and its implications for how a brand’s products are sourced and manufactured. The expectation now is that a brand’s products and services will satisfy not only a functional requirement but reflect the social values important to the consumer. Social responsibility has proven to be more than a fleeting issue.
Videos of appalling working conditions, child labor, and publicizing of woefully inadequate wages paid in some factories struck consumers like a thunderbolt. The distress consumers experience when using products or wearing apparel produced in these conditions unleased a backlash tarnishing the perception of some of most well-known brands. Consumer anger ignited multiple grassroots actions. The resulting pressure on sales from these actions and the resulting poor public relations forced change. Brands revised their business practices and oversight of their suppliers in an ongoing effort to correct the offenses that ignited consumer anger.
Similarly, as the impacts of climate change become more apparent environmental issues have become of great interest to consumers. With this, consumers now expect that products they purchase are manufactured consistent with positive environmental stewardship. This is true not just within tier one suppliers but across the supply chain from raw material to finished product.
Once hailed as the new model in ready-to-wear, “Fast Fashion” apparel became celebrated for its ability to offer more frequent deliveries of new styles creating excitement and a reason to go to the store more frequently. However, when the environmental impact of manufacturing fast fashion became understood by consumers it dramatically dampened the enthusiasm with which these brands were embraced as reflected in markedly lower sales.
Today, both Fast Fashion retailers and established brands share the challenge of balancing speed to market and environmental stewardship. Brands are now responding to these challenges under the watchful eyes multiple NGO’s and consumer groups. Though progress on this challenge has been achieved, it has been uneven. Not succumbing to fierce competitive pressures, political cross currents and the vast webs of third-party suppliers requires a level of sustained discipline and stewardship disappointingly few companies have made a strategic imperative. This failure extinguishes any chance preserving loyalty of existing customers and erodes the opportunity to grow marketshare with new customers.
Satisfying the Customer:
Connecting to the consumer through brand identity:
It’s a given that any product must consistently satisfy the needs of the consumer. A lack of consistency in the products/services of the brand creates uncertainty within the consumer. Brands must continue to meet the consumer’s expectation of the brand. Companies that have been successful in driving market share are the companies that proactively manage the relationship between the consumer’s expectation and the consumer’s experience with the brand. This creates the certainty consumer’s desire and builds confidence in the brand.
A great example of a company that has managed to create this certainty with phenomenal success is FedEx. They entered the priority delivery service market with a compelling slogan that defined their unique service offering: “When it absolutely, positively, has to be there overnight.” This set the expectations for customers of the service, and FedEx delivered. “I sent it FedEx,” became the reassuring explanation of certainty for business and individuals and set the performance standard for all its competitors to meet.
FedEx’s commitment to consistency of service lifted them beyond simple brand recognition and as a result been adopted into everyday language synonymous with the product itself much the same way we refer to Kleenex for tissues and Xerox for photocopying.
There are myriad examples of products that missed the mark but upon review it is now easy to see why these failures were a result of the incongruency between the product itself and consumer expectations. Take for example the 2013 release of Google Glass. This innovative product clearly had a “Cool Factor”. A sleek new device that could access the internet and take pictures from a light eyeglass frame. Though early sales were brisk from early adopters who wanted the latest gadget, sales never developed any momentum beyond this limited group. While Google understood clearly how the product fit with their brand’s perceptions as technology innovator, they utterly failed to consider consumer perception of value. While it was undeniably cool, the “Google Glass” was a prohibitively expensive way to search the web and take pictures when compared to the same function on consumers mobile devices they already owned. The failure of Google Glass serves as a lesson that the Brand’s perception of the product’s utility and the consumers perception of value must be in perfect alignment. Without this alignment products are doomed to failure.
Connecting to the consumer through product design:
Most executives miss the profound importance of product consistency as it relates to market share. Product design (born out in the product features and functionality) is the foundational connection to the customer. Ultimately design must create product that the consumer will find tempting enough to buy and will find pleasing enough to buy again.
Consistently meeting the “pleasing” of the customer has been an eternal challenge because product design in not a straightforward linear activity. The design process is complicated because it is the iterative exercise of balancing the tension between product quality, function, and price.
Designing products requires anticipating what consumers will want to buy several seasons into the future. This, by definition, creates a rhythm of business that differs from operational orientation of the rest of the corporation. The result it that the design process has been siloed from most ongoing corporate activity. The consequence of this isolation is that designers are making choices based on limited feedback from the customer that makes developing consistent offerings of “pleasing” items more elusive.
Consider the classic season-centric apparel design calendar. Trend research, traditionally consists of shopping trips, learning what silhouettes and color pallets are popular in Europe then bringing home samples for “inspiration.” Customer research on why one item was chosen over another, what need the consumer was trying to meet with the selection and how well the purchase succeeded is barely considered. Silhouette, color pallets, artwork and material choices are all made independent of consumer engagement. From this, through design, line planning, and multiple rounds of sampling information about actual consumer experiences, needs and preferences is scant even as production lines ramp-up and the items are brought to market.
Integrating design should not be mistaken for the new buzzword to discuss product esthetics but rather the informing of the design process in order to connect more directly to the customer It is the recognition that design choices launch an inexorable series of decisions that culminate in product offerings that, when placed before the consuming public, will determine revenue, profitability, brand perceptions and ultimately the longevity of the enterprise itself. Considering this impact, that so few companies have made the effort to integrate customer feedback into design strategy is mystifying. For those who have the journey has not been easy, but results have rewarded their perseverance.
Growing and protecting marketshare begins and ends with how the customer experiences the product and formulates an opinion about the brand. With this, gaining a better understanding of the customer should be the preeminent goal. The challenge for retailers and brands is twofold. First, they must make the investment to gather current and relevant information to establish the closest possible relationship with the customer to build loyalty. Second, they must make full use of this relationship to grow and protect marketshare.
Retailers and brands who sacrifice an investment in this effort for short term cost savings, will in the long term find they lose the customer connection essential for competitive survival.
To succeed in this changing landscape, store-native retailers will need to abandon their legacy habits and start acting like their digital-native competitors. We’ve created a guide for having crucial discussions about Digital Transformation with leadership, including a big picture perspective that outlines why these projects are about survival, not just technology. And a visual roadmap to help guide these conversations, better understand the current state of retail and tips on succeeding in this new environment. Click here to download this guide/whitepaper we call, “Retail Transformation Imperatives: 5 Imperatives for Retailers, Wholesalers and Brands.” A how to manual for navigating the ever-evolving retail world, and a blueprint for success in the new era of commerce.