We recently sat down with a couple of battle-tested leaders at The Garage Group — Ann Thompson (Co-Founder and Chief Engagement Officer) and Erin Faulk (VP of Lean Growth) — to probe their thoughts on what it takes in today’s uncertain, ever-changing environment to keep brand portfolios relevant and growing.
Given the uncertainty in the market, what should brand leaders be considering as they’re re-evaluating and attempting to move forward?
Erin – Brands naturally go through the process of SKU rationalization and portfolio optimization. But, COVID-19 has forced companies to focus on their core. As a result, the smaller, more niche SKUs have fallen to the wayside, some of which are part of big bet innovation. The challenge is that when innovation exists on the fringe, brand priorities are being called into question. What does innovation look like now? How do you continue to deliver relevant solutions for consumers while being mindful of their increasing constraints and evolving contexts? As a brand leader, I would be re-evaluating both my current focus and pipeline, as old innovation plans may no longer be relevant, while others need to be accelerated much faster than expected.
Ann – From a portfolio standpoint, brand and category teams need to be deliberate and ask, “Are my SKUs profitable in the business model that consumers are buying them in?” Portfolios have most likely shrunk due to COVID-19. Now, there are fewer SKUs, which have to work harder for brands, so it’s important to think about, “How do I optimize what’s left so I’m saving my overarching business?” In many industries, general simplification of the portfolio is valuable. Consumers are overwhelmed. They’re shopping in new ways and want fewer, clearer choices. You can see this at QSR’s drive-thrus. How much of the menu can you really fit on a screen? It has to be clear and consolidated. That’s what’s important — really optimizing the portfolio to make it the most hard-hitting, profitable, and consumer appealing.
How can Build, Test, Learn principles help brands tap into changing consumer behavior? Reebok announced a program called First Pitch where consumers decide whether a shoe is made or not. Good idea?
Ann – Build, Test, Learn is a simple concept: build something new, test it, learn about it, and iterate it. It can be done easier and broader today with more people being willing to shop online, which is great news from a smart, low-cost, iterative, and fast development point of view. Reebok’s First Pitch is an excellent example of leveraging testing and direct consumer input to decide what they build or not. Adding a transactional component to that is great because it enables consumers to have skin in the game. They’re taking a startup-inspired Kickstarter approach. It would be interesting to see retailers start to ask consumers what they want to see in store.
Erin – Build, Test, Learn is about learning as you go, adding value despite heightened uncertainty. Consumer behavior is changing so fast that you can no longer rely on the data you got last week. Instead, it’s time to ask new questions, listen to real-time responses and pivot as needed, making smart decisions based on context. This type of iterative, comprehensive learning builds a mounting body of evidence over time.
What should brand leaders be considering to drive growth moving forward?
Erin – Fundamentally, it’s important to have clear responses to “What problem are you trying to solve?” and “Are you clear on your brand purpose or the business you’re in?” Thinking about growth may feel overwhelming, but putting one foot in front of the other allows you to ask strategic questions and evaluate the actions you are taking, immediately.
Ann – It’s also important to ask yourself and your team, “Have the Jobs changed?” They probably have. Jobs and consumer needs have shifted in most – if not all – categories. Consumers are hiring/firing products and using them in different ways, and brands need to adapt.
Get in touch with Ann and/or Erin if you’re up against these challenges and need a partner in crime to think through them with you. These two leaders are experts at helping BigCos apply startup-inspired approaches against their toughest innovation and growth challenges. They’d love to have a conversation about your current goals and priorities, and share more about how The Garage Group can help.