In business, the dichotomy between winners and losers is growing starker each year. Fortune 500 companies in the retail and consumer packaged goods industries—once the bedrock of the marketplace—are hemorrhaging customers and sales, unable to keep pace with the rapid changes in the way consumers shop and conduct their lives. Meanwhile, a cadre of "new" blue chips—Apple, Alphabet, Facebook, Alibaba, Amazon—and a host of smaller insurgents including Tesla, Uber, Lyft and Airbnb continue to grow like gangbusters. All of these companies have reimagined a business model that should remain relevant for years, thanks to their ability to consistently deliver a better customer experience.
So who will be tomorrow's winners and losers? If past is prologue, only companies that have the foresight and the fortitude to adapt to fundamental shifts in consumer behavior will survive and thrive.
For marketers, this means committing to leveraging all available assets (e.g., data sourcing and investment) in order to understand customers better and to speak to them in more meaningful ways. Today's customers demand not only personalized interaction but also impeccable timing from marketers; companies must reach individual customer in exactly the right moment with a genuine and resonant message. To perfect such an approach, marketers should adopt a measurement model that gets closer to the moment of truth by relying on metrics that are directly connected to sales.
Both of these shifts demand a higher tolerance for risk. Marketers—and the organization as a whole—must be willing to dispense with approaches that no longer work.
Don't Stand Still
In a climate rife with upheaval, clinging to an outdated business model is an unsustainable strategy. Indecision is our worst enemy. Think of the great outdoors as a metaphor for survival: Your chances of falling through the ice go up exponentially if you stand still.
The exact course of action will depend on which aspects of the current approach have become obsolete. Some changes will need to take at the corporate level, while others are more within the purview of marketing. To begin with, here are three tough questions that every company must ask itself:
1) What's more important—shareholder value or market domination? If Amazon had worried exclusively about the former, it wouldn't be where it is today. For years, the internet giant has largely ignored shareholder calls for profitability and remained focused on trailblazing new markets. Now it has succeeded on both fronts. By contrast, CPG companies have been largely focused on merger opportunities while retailers like
2) Have you taken bold steps to diversify your business? At times, a shrewd acquistion can do more than improve the bottom line: It can help overcome rivals or accelerate entry into a critical new segment. In 2016, established leaders in the men's shaving category were getting killed by Dollar Shave Club's disruptive, price-slashing service-based model. Unilever's swift though costly acquisition of the company (at a reported $1 billion) provided cachet in direct-to-consumer branding and instant entry into a booming new e-commerce category.
3) Are you fighting competitive threats on your own terms? What do media companies and telecommunications providers have in common with the food industry? In the former, the cable TV business is under assault by streaming services and cheaper subscription models from the likes of Netflix and Amazon Prime.
Similarly, traditional packaged goods companies are teaming up with online grocery distributors to make sure they are not getting left behind in the growing meal-kit services trend. Tyson, for example, has added its chicken to Amazon's Fresh meal service, while ConAgra is working with online grocer Peapod to include its products in meal solutions shipped directly to consumers' homes. Take that, Blue Apron.
In each of these examples, the companies saw the handwriting on the wall and took decisive action. Marketers can help move the ball forward by making sure the company is prepared to meet customers where they are—or anticipate where they are going—even when it means moving into uncharted territory. Fast food and casual dining restaurant chains, for example, have stepped up promotion of their online, mobile and to-go ordering inititiaves, recognizing that this is where the future growth lies. This is no time for incremental thinking.
It's the one clear choice in a brave new world.