Your business can do many vital things well. High customer satisfaction ratings. High quality at a competitive price point. Great customer experience. But if you become irrelevant to the tastes, interests, and requirements of customers, all that “right stuff” won’t matter. Therefore you must understand where markets are headed, not just what’s relevant today.
Let’s think about some current trends and imagine their impact by flashing forward 30 years when the last year of the baby boomer cohort (those born in 1964) turns 96. Will gas-powered cars be relevant? Family farms (sadly)? Long-haul truck drivers? Landline phones? Printed newspapers? Going to a doctor’s office for a simple exam? Single-use plastics outside medical markets?
Leaders managing brands do the work of future forecasting because they want to evolve their offering to remain relevant. When leaders fail to do so, their brand (and often company) falls into trouble.
Most famously, Blockbuster missed out on the switch to streaming movies, and Kodak missed scaling digital cameras (it had the technology). Both are relevancy issues.
Other examples abound. Pier One is closing. The once-popular source of low-cost home décor lost its cache as online retailer Wayfair offered more choice at a lower price point. Pier One also lost out to companies like Pottery Barn and Crate & Barrel that offered a higher-end more contemporary look. Macy’s looks to be following Pier One’s path forced to close many stores.
Hallmark’s core business – printed greeting cards – is also becoming less relevant. The 110 -year-old company is slashing operating costs and shifting funds to its online card business. Its competitor for high-end cards, Papyrus, is closing stores. Why? Today’s youth send on-line cards or post messages on Facebook or Instagram. Hallmark wisely acquired an on-line card offering, but why pay $5/month to Hallmark when you can send greetings for free?
Victoria’s Secret is also suffering from relevancy. As women increasingly celebrate genuinely looking bodies and comfort, new bra lines are replacing the iconic brand’s archaic image of sexiness. Dove understood the beauty trend correctly, and its business boomed. Not so, Victoria’s Secret.
What is a team to do?
First, don’t define your business by what you offer today. Instead, describe it by the problem you are solving or the opportunity you are providing. Film cameras were one way to capture memories. Kodak’s real business was capturing images and memories. Paper cards are one way to send greetings, but the digital world has dramatically expanded the possibilities. A more strategic Hallmark would have invented emoji sets tailored to your personality and age. Free e-cards, with a charge for video cards, might have better protected Hallmark as well.
Second, follow the youth who will replace their elders in the market. Young people want walkable cities; they are more likely to spend money on experiences than on living space. There is a reason the Wall Sreet Journal’s “mansion of the year” homes sell for a vastly lower price nowadays than what was cited when they won the award years ago; parents’ furniture and large square-footage homes are no longer as popular. And in B2B markets, younger purchasing managers use the internet, not meals with sales reps, to decide which vendors to consider. Nordstrom wisely introduced a “used clothing” offering to meet the needs of youth who, unlike earlier generations, love to recycle clothing.
Third, disrupt yourself before you are disrupted. Diagnose what’s wrong with your solution today and what issues may emerge with your offering as tastes and technologies change. For sure, future competitors will be looking to close those gaps. If new technology can do a better job or a cheaper job, it will win at least part of your market. In medicine, minimally invasive surgery replaced many traditional surgeries, stents replaced most open-heart surgery, and patient site diagnostic tests are increasingly replacing central labs.
Fourth, remember the economics of industries. When one part of the industry value chain consolidates, all other parts of the chain will consolidate in a bid for power. As healthcare insurers consolidated, health care providers joined together across type (hospital and doctor) and location (cross-state systems). Medical device companies and distributors are also merging in response.
Finally, relevant brands stay active in customers’ minds by the brand’s actions. If little has changed in your brand — your offerings, features, emphasis, selling points, marketing — take it for granted it is becoming less relevant to customers. The consultancy Prophet argues, “Relentlessly relevant brands engage, surprise and connect. They are genuinely modern, finding new ways to delight and deliver. They push themselves to earn and re-earn customers’ loyalty—and they continually redefine what’s possible.” Lego is probably the best example of a brand that has met this standard. I’d add Apple and Microsoft (newly relevant) to the list.
What are you doing to keep your brand relevant?