Knowledge Bank Blog, Category Strategy, Channel Execution

Avoiding The Brexit Traffic

How many of you have been to Vietnam?

There are lots of things to see in Vietnam.  But, there is probably one thing you remember – particularly if you spent time in one of the cities…motorbikes.

In Vietnam there is a serious amount of motorbikes.  It is estimated that there are about 45 million of them.  Over half the adult population rides around on one.

All these motorbikes present one big challenge.  Crossing the road.  There are few traffic lights and a constant stream of motorbikes.  There is rarely a break in the traffic.  So, how do you cross?

There is a simple method that any local will tell you.  You step onto the road.  You look straight ahead.  You walk in a straight line.  You safely reach the other side.  All the motorbikes avoid you.

Sounds simple, right?  Until you try it yourself.  Try stepping onto a road with a hundred motorbikes coming towards you without looking left or right.  Then try walking across the road, looking straight ahead, whilst motorbikes bob and weave around you.  It’s really hard.  But you have to.  If you don’t, you won’t get to the other side.

Look straight ahead and keep walking.

Why are we talking about this?  Well, in our industry there are a lot of potential distractions at the moment.  There are changes in the retail landscape.  Discounters continue to grow.  Tesco have launched their first Jack’s stores.  Sainsbury’s and Asda plan to merge.  Amazon is circling.

Then there is Brexit.  Will there be a deal?  What kind of deal will it be?  How will it impact input costs?  How will it impact margin and selling prices?  There is a lot you can think about.

We find that one of two things happens in this type of situation.  You get paralysed.  There are so many things that you could be doing that you end up not doing anything.  You don’t step on the road.  Or you get over active.  You do too many things.  You step on the road, but you keep looking left and right, trying to avoid all the traffic.  Neither option gets you safely across the road.

When there are so many distractions, the most important thing is … to not get distracted.  Know where you are going.  Look straight ahead.  Keep walking.

So, how can you do this?

Have a clear category strategy.  There are 3 simple questions to ask.  Firstly, what is the category landscape in which you are operating?  This is about getting to the simplest definition of the category and key sub categories.  It sounds obvious but it often isn’t.  For instance, what is in male grooming and what is out?  What are the key categories and sub categories?  Ask ten people and you will probably get ten different answers.  Secondly, where are you playing (or where do you want to play)?  If you are in the coffee category are you playing in instant, ground, pods, on the go?  Thirdly, what does it take to win?  For instance, the rules for winning in premium ready meals will be different to winning in healthy ready meals, which will be different to winning in takeaways bags.

Why are the answers to these questions important?  Because they tell you which road you are on. Where you need to cross.  How you get to the other side.  Without these answers you are reactive – to the latest change in the market, to the latest competitor activity, to the loudest voice in the room.  Having a clear category strategy is more important than ever.

Have a clear channel strategy.  We suggest asking the same 3 questions.  What is the channel landscape in which you are operating?  This is about identifying the key channels in which your category is, or could be, sold.  It is about identifying the key sub channels – e.g. there are different types of online retailer (grocery, specialist, generalist).

Where are you playing (or want to play)?  This means deciding if you want to play in value stores.  Deciding if you want to play in Amazon.  What does it take to win?  So if you do decide to play in Amazon, what do you need to do to make it commercially viable?  What products do you deploy?  How do you deploy them?  Having a clear channel strategy is more important than ever.

Have a clear brand strategy.  Guess what…we’ve got 3 questions.  What is the brand landscape in which you are operating?  Again, it sounds an obvious question.  But often who you think are your main competitors, are not.  And who you think aren’t your competitors are.  For instance, it’s a long time since the battle between Coke and Pepsi mattered – the competitive set is much broader now.

Where are you playing (or do you want to play)?  This is about brand positioning.  Are you premium or mainstream or value?  What does the brand stand for?  We still see a lot of brands that are not clear on this.  What does it take to win?  So if you are a premium brand that is all about taste and authenticity, what do you need to do to bring this to life and consistently reinforce it?  Having a clear brand strategy is more important than ever.

It will be so easy to get distracted over the coming months.  To spend all your time looking left and right.  To win you need to have clarity.  You need to step on the road.  Look straight ahead.  Keep walking.

Don’t worry.  The bikes won’t hit you.

Feel free to forward.  Have a great weekend and speak to you next week.