Knowledge Bank Blog, Range & Portfolio, Shopper Communication

Too Much of a Good Thing

Are you reaching ‘peak’ activities?

In 2017, 487 TV shows with original scripts were aired across US broadcast, cable and streaming platforms. This was up from 455 in 2016. Netflix, who have been leading the charge in this area, are estimated to be spending $8bn on new content in 2018.

How does this sound? In theory, great – more TV shows leads to more choice, which leads to more entertainment. But, in practice, this is even more content that makes it even harder to make a choice about to watch. Assuming you have time to watch any of it in the first place.

John Landgraf, CEO of FX Networks said at a conference “There is simply too much television. The audience is overwhelmed by the sheer volume of TV shows”. We are said to have reached ‘Peak TV’.

In fact we are said to have reached ‘Peak’ on a lot of things. Last week there was a report saying that we had reached “Peak Cars”. Apparently, the UK and other western nations are nearing the maximum level of private vehicles on the road. Although, those of you who have spent any time in Asia, might say there is a way to go. Last Sunday there was a report saying we had reached “Peak Facebook” as users spend less time on the platform.

‘Peak’ refers to something reaching its highest point. It can be a really good thing. “I made it to the peak of Everest” is a big achievement. However, ‘peak’ is increasingly being used to describe too much of something. Which is not such a good thing.

Why are we talking about this? Well, we think our industry has faced a number of ‘peaks’. Take large out of town superstores. This was where the action was. These stores delivered for a long time. Until we hit ‘peak superstore’ and they didn’t deliver so well. Now, there is a rush to get land off the books and redeploy square footage.

Take promotions. Promotional intensity increased significantly as retailers and brands competed for share. To such an extent, that many brands were selling 80%+ of their volume on deal. Even brand leaders. This worked for brands and retailers for a time. Until we hit ‘peak promotions’ and they didn’t work so well. Now, the slow descent from the peak of the promotional mountain has begun. But, it’s a long way down.

So, where else might we be heading toward ‘peaks’?

‘Peak Range’. Until recently, most categories have seen a proliferation of range. Some of this has been driven by genuine innovation. However, a lot of it has come through more variants, flavours and pack sizes. On every category strategy that we work on there seems to be a need to simplify and clarify the category for shoppers. Whilst the category team is working on this, often the brand and innovation teams are working on another 10 SKU’s to add to the mix. It is no coincidence, that the two most successful grocery retailers over the last few years (Aldi & Lidl), have the narrowest range.

‘Peak Benefits’. As range has proliferated, so too has the number of benefits products offer. This can apply across a category – for instance, look at the proliferation of benefits across juices and smoothies. It also applies to individual products. We have always seen this in personal care – the skincare product with 10 different benefits. We are now seeing this in food and drink. Even pet food. We often hear the argument that having all these benefits gives shoppers the impression that the product is good even if they don’t read them. We would argue that having all these benefits shows an inability to prioritise. If you can’t prioritise, how can you expect shoppers to?

‘Peak Data’. Big data is all the rage. Companies talk about their “Big Data Strategy” as if it is an end in itself. Data and information is only a means to an end. It should help you understand more about shopper behavior, needs and attitudes. It should. However, often we think that it doesn’t. Lots of companies have lots of data in excel spreadsheets, powerpoint presentations and software packages. The problem is that it stays there. The focus is on trying to get more data not trying to properly understand existing data. The answers are nearly always right there.

‘Peak Process’. A huge amount of time in larger companies is spent on process. Take brand planning. By the time you finish going through it this year, it will be about time to start it again for next year. Take innovation. More time seems to be spent on the innovation process itself – managing different stages, getting the project through each stage gate. It often seems that more focus is on convincing people internally that the product will be good than convincing shoppers to buy it when it launches. It’s no wonder that many small brands launch things quickly and effectively. There is not a template in sight.

A lot of the things we are talking about started off as a good thing. More range gave shoppers more and better choice. More data helped companies understand shoppers better. More process brought order and consistency to how things got done.

More is better until it becomes too much.

Once you’ve reached the peak of the mountain, you have to climb down again.

On a separate note, our monthly article in The Grocer goes out in tomorrow’s edition .  There is a link to it on our website…

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