As we celebrate Halloween and somehow take domestic-level ‘scares’ in our stride, real ‘scares’ in our business can be a distraction in terms of optimising day-job productivity…
This applies especially as we embark on the certainty of an unprecedented Winter of Discontent, merely the latest in a succession of ‘scares’ that included the Pandemic variants, Lockdowns, Storms, Food shortages, Power-cuts, Droughts, Floods, and Threats of Ukraine-based Nuclear War. As a result, it can be easy to be diverted to exploring cause and effect, when our key focus should be on optimising business opportunities. In adapting to a succession of destabilising shocks to the business, with the parameters changing so rapidly and erratically, it can be tempting to resort to firefighting. This would be a mistake. These unprecedented ‘scares’ require more sophisticated handling…
Whilst being scared can be unproductive, simply forgetting/even parking the probable cause (or even The Real Agenda?) is not the answer. But focusing on identifying the effect and seeking solutions can provide a way out. In practice, going behind the tabloid headlines and using critical thinking skills to determine the implications of every latest ‘revelation’ has to be more productive…
In practice, how we in business react to these shocks can depend on the type of person we are. As you know, essentially there are three types of people in the business world: The first type of person looks at the world and asks “Why?”. The second type of person looks at the world and asks “Why Not?”. The third type of person doesn’t even bother to ask why or why not, in that they believe that they cannot change the world and that if anything, the world changes them (They’ve figured out the whole crux of the matter through years of struggle and have become indifferent through adaptation!).
Although the people that ask Why? or Why not? tend to be featured in most Management Fixit Books, it is perhaps the third type of person that has the right approach in unprecedented times. However, those of us in the Why?/Why not? categories may prefer to build on the critical thinking skills that got us to this point…
Given that any half-adequate exploration of an issue/‘scare’ begins with the questions: Who? Why? What? When? Where, How? that not only demonstrate the enormity of the task ahead of anyone attempting to establish the root cause, but also cause one to be easily diverted down a compelling rabbit hole at the expense of productive work on optimising a day-job business idea. That questioning is best left to others while we establish the impact of each of these ‘scares’ on our business and category and find ways forward…
In doing so, it is worth keeping in mind that in this land of chaos, uncertainty, and non-conformity, underneath all the Lockdown and associated pressures lie individual and unique consumers that hopefully need what we can provide, and are still capable of thinking critically and deciding for themselves. They may be scared and distracted by domestic pressures, but deep down, Lockdown has produced a nation of potentially savvy consumers that demand demonstrable value for money, every time. They trust no one, and their trust must be won and retained by delivering more than it says on the tin, every time…
The Battle of the Middle Ground
Whilst managing the ‘scares’ outlined above will represent a challenge for most NAMs, establishing the impact and finding solutions will be vital for suppliers operating in the middle ground of medium-sized brands.
Given that global brands enjoy (!) the benefits of scale, muscle and consumer demand to reflect soaring inflation in their CPI negotiations, the battle for survival for most branded NAMs will fought in the middle ground, in growing brand share at the expense of branded rivals, and avoiding any surrender of category share to own label.
This requires the application of the most basic of all basics. Think back to what made you good at launch and got you to this point. You succeeded because you represented a point of difference, some aspect of relative competitive appeal vs available alternatives in terms of Product, Price, Presentation, and Place. It meant moving in step with changes in consumer need, shedding any accumulated baggage in the process. Above all, it meant always resisting any temptation to disguise price-rises via shrinkflation. In other words, you have remained true to the consumer and customer in truly unprecedented times…
A cliché, but scary to think what would have happened otherwise. In essence, you must be prepared to deliver more than it says on the tin to both consumer and customer, every time, at all costs…
Incidentally, small brands still surviving Lockdown are alive because of their unique (non-copyable) or niche appeal. They simply have to do more of what has worked before without ever succumbing to the temptation of short-changing the consumer or retailer, ever…
The Retail Media ‘Scare’
Having come to terms with effective management of the ‘scares’ outlined above, it would be unfair not to mention what could be regarded as the biggest potential challenge to traditional Retailer-NAM-Marketing relations in the coming winter – the Retail Media ‘Scare’.
For global brands, the major challenge will be optimising Retail Media this Winter. Essentially, for major retailers attempting to resist share loss to discounters everywhere by financing price cuts via the bottom line, newly emerging Retail Media represents a potential way to restore lost profitability.
As you know, Retail Media can provide access to a ready-to-buy consumer-shopper in the aisle, complete with all that retailer’s insight based upon years of buying behaviour history… Think how this unprecedented degree of timeliness and pinpoint accuracy compares to the blunt targeting and delivery of print and broadcast media. In other words, we are heading into a winter where Retail Media will battle with Traditional Media for a slice of suppliers’ diminishing media budgets.
In practice, this battle will be fought in part by an unusual mix of a supplier’s advertising agency attempting to maintain traditional media budget allocations in terms of Press and TV, and a combination of the supplier’s sales and marketing teams. A further complication will be the fact that powerful Mults, already struggling to fund shelf-price cuts will see Retail Media revenue as incremental direct contributions to their bottom line.
NAMs will see Retail Media as a way of getting some relief from Mults’ demands for increased trade investment and will therefore support buyer demands for a slice of the traditional media cake. This will place sales in potential conflict with marketing as marketing wrestles with the attractions of precision via Retail Marketing compared with ‘old fashioned ‘ Traditional Media…
Meanwhile, Amazon, which for many suppliers represents an alternative route to market, is the biggest user of Retail Media in that they generated $21bn in incremental profits from supplier Retail Media spend last year – a pointer for any retailer sitting on a mountain of under-optimised consumer-shopper insight…
However, despite their spectacular success, following in Amazon’s footsteps can itself be scarey in that Amazon last week expressed some concerns about this Christmas being tough. As a result, they experienced an equally spectacular overnight fall in share price. For perspective, the initial 17% fall wiped $190bn off Amazon’s market capitalisation, continuing later to a 20% fall. Yes $190bn! The key now will be whether Amazon uses Retail Media income to bolster the bottom line, or support price cuts to drive volume. For many, this adds a whole new meaning to ‘scary’…
Add to this the fact that the tech companies like Google are experiencing a slowdown in media investment because Retail Media Networks are capturing the reallocated traditional media budgets.
The coming winter represents an unprecedented challenge for all. In order to stay the same, everything has to change, but change can be scary. However, by focusing on the impact and effect of the above market ‘scares’ and embracing radical change like Retail Media, it is possible to optimise personal and company strengths.
All else is detail…
