Mack outlines six factors for success
BOSTON — Retail and supplier executives got their start before Meet the Market Saturday morning with Dan Mack, managing director of Mack Elevation Forum, who shared the six factors that make “dark horse” companies — small- to mid-tier companies that have carved out a successful business for themselves — great.
“Dark horse companies are really authentic,” he told attendees of the session titled “Strategies for Success — The Secrets of Winning Dark Horse Companies.” “That’s part of the magic, [and] most of us are dark horses. The best organizations embrace [their dark horse identity], and they embrace feedback — that’s a common theme across the whole dark horse field, they embrace honesty.”
Of the six themes outlined by Mack, successful dark horse companies possess a strong identity, have a corporate culture aligned with that identity, tap hidden assets, pursue co-creation with their partners, create a blueprint to success and possess a culture of grace.
Starting with identity, companies need to identify who they intend to be, not what products they intend to make. “Your identity is actually very fixed,” Mack said. Companies who stay true to their identity are not followers, Mack said, instead they blaze their own trail with a sense of authenticity. “Retailers want organizations that create [a] path,” he said
Companies that are not true to their identity fall out of alignment, Mack warned. “Only 13% of employees think that they’re company is aligned to win. Most companies are really not relevant — 75% of organizations really don’t create value when you talk to the customer,” he said. There are four common blind spots that companies out of alignment have: their products are not unique, they underestimate the competition, they don’t know their customer’s agenda and they don’t listen.
Dark horse companies also exploit their hidden assets and share them with their partners, such as tapping collective knowledge, creating unique experiences for the consumer, bringing relationships to bear or manufacturing custom solutions. “The best asset you have may not be your products; it may be your intangibles,” Mack said.
“Intangibles and hidden assets lead into this other thing that dark horse companies do,” Mack said. “They co-create with the retailer; they co-create with partners; they listen to ideas [and] are really good at stimulating ideas.”
Mack noted that successful dark horse companies pull all of this together into a blueprint that helps them stay the course. “The blueprint uncovers your story [and] helps you learn your customer’s story,” he said.
In all, more than 700 companies, including 44 retailers and 22 suppliers participated in Meet the Market.
For more photos from Meet the Market, click here.
Affordable indulgence for the value-driven shopper
BOSTON — The search for value continues, but it doesn’t always mean cheap. It means “make my life better.” And when it comes to the $45 billion beauty market, the opportunities are aplenty. That was a key message from Sunday morning’s Insight Session “Putting the Polish on Your Value-Oriented Shopper.”
To help retailers and suppliers see how this trend is playing out within the dollar store segment, presenters Larry Levin, EVP of IRI, and Jessica Kalinger, Coty Beauty’s director of consumer marketing and shopper insights, shared how they collectively identified value-driven consumers to understand their shopping preferences
It is no secret that today’s consumers remain cautious and that their shopping behaviors have been altered to reflect a “new normal.” What this means for shoppers — especially beauty shoppers — is that value is extremely important. In fact, as Levin pointed out, today’s wealthiest shoppers love deals, those economically concerned shoppers want accessible indulgence and new innovation, and beauty shoppers are trading down from premium brands.
“It is chic for people to drive a Mercedes in front of a dollar store. Dollar stores delivered 4% growth, significant growth in beauty because people saw the value,” Levin said.
Added Kalinger: “This growth trajectory has been going on for the past three to four years. So a couple of years ago, my team noticed this trend and took a step back and investigated what within beauty was causing these dynamics.”
Coty found that year-over-year it was the same three segments really growing the category within the dollar store channel:
- Hair care, mainly shampoo and hair coloring, is the leader bringing in two-thirds of the total dollar growth within the last year;
- Nail enjoyed 3.8% growth, representing $4.2 million — thanks, in part, to increased points of distribution; and
- Color cosmetics grew 2.7%, representing about $6.4 million.
Other points included: innovation sparks excitement, so innovation must remain strong; connect with your savviest shoppers and know your segmentation; and don’t forget about
Innovating to fulfill unmet customer needs
BOSTON — There’s no other aspect in business that would tolerate an 85% failure rate. So why should it be tolerated in new product development? That’s one of the key questions addressed by Taddy Hall, SVP of the Nielsen Innovation Practice and leader of the Breakthrough Innovation Project, at the NACDS Insight Session titled “Breakthrough Innovation: From 85% Misses to 85% Hits” on Sunday.
“We believe that [innovation] is somewhere between magic and art, and it’s [in] this unknowable, unpredictable realm — it’s simply not true,” Hall said. Flopping the innovation success rates so that 85% of new launches are hits is definitely achievable, across industries and across categories, Hall added.
Another fallacy associated with innovation is that in order to aspire to higher rates of return, you need to embrace higher levels of risk. “There is no relationship between risk and return,” Hall said, suggesting that a routinely well-vetted innovation pipeline represents the ideal — low risk and high return.
The truth is, if you produce a solution that resolves a previously unmet customer need or fulfills an unmet aspiration, as defined by the customer (not the marketer), the product launch has a high chance of succeeding. “If you can embrace and operationalize the definition of innovation, that emerges from consumer’s actual behavior, the implications can be transformational,” Hall said.
Winners in innovation do a few things right, Hall said. “One [is] you can see the insight brought to life in the creative execution. Second is the in-store activation; it’s hugely important. With many brands, the in-store activation and the package design are the [leading sources] of awareness and obviously critical in driving trial,” he said. “Finally, what we found from these winners is that 40% of all trial occurs in the first 100 days. So make sure you are on top of launches because there are inevitable surprises in launches.”
“Breakthrough innovation is not random,” Hall said. “There’s a very disciplined process by which these breakthrough winners are generated. Much better innovation outcomes are absolutely a choice.”
There are three criteria with which Nielsen identifies breakthrough innovators. The product needs to be distinct; the product needs to be relevant with at least $50 million in year-one revenue; and the product needs to have endurance by maintaining at least 90% of its sales volume through year two.