How Strategy can work in the Long and Short Term
We’re into another year, and with that comes a new set of targets. Without a doubt, 2019’s targets are likely
to be pretty stretching in our industry.
Why? The external environment is uncertain and challenging. Within our industry there is intense competition – between retailers, between brands, and between brands and own label. Consumers have more choice than ever before, both across categories and within categories.
So, what do you do? How do you hit 2019’s targets?
Well, you start off by looking to your strategy. But the strategy looks like it is only relevant for the long term. It won’t help with the chase for cases.
So, you turn to short term solutions. Things that you know you can develop & deliver quickly. These will generate sales. But are they the right kind of sales? Often these short term solutions store up trouble in the long term.
We think this is the big challenge a lot of companies are facing right now: how to deliver sales in the short term AND stay on the right path in the longer term.
The answer is to have a good strategy that allows you to do both: deliver real results in the short term AND keep you moving towards your long term goals. A good strategy gets the short term and the long term working together. It means that you don’t have to choose one or the other.
What do we mean by getting the short term and long term working together?
Promotions are a classic short term action that companies can turn on. They work… in the short term. But they can often be detrimental in the long term.. You have to go deeper to hit next year’s numbers; you run the risk of training shoppers to only buy you on deal.
So, instead of reacting to the short term sales pressures with deep cut promotions, run promotions that drive the right long term behaviour. For instance, the Quaker Oats 5 for £4 promotion on their single pots allows them to drive a short term sales uplift whilst helping the longer term objective of hardwiring the 5 day a week consumption behaviour.
Innovation is a powerful weapon in a company’s arsenal. But all too often, we see a lot of tactical innovation that is aimed at solving a short term problem. For example, launching a line extension (e.g. a new flavour of pasta sauce) in time for a range review to protect space, which will most likely just cannibalise existing sales.
Rather than focusing time, energy and resource on strategic innovation – for example, products that are so good they are capable of dislodging a shopper’s current favourite or can open up new consumption occasions (e.g. pasta sauce pots for one for the smaller household).
Activation might be short term by its nature, but it can absolutely have an impact on the long term positioning of a brand. However, companies can often be distracted by an opportunity in the short term. For example, a brand wanting to drive its health credentials running a car giveaway competition because their partner agency was able to negotiate a deal.
Rather than being single minded about driving their positioning at every opportunity – for example the same brand running a gym membership competition.
Developing a strategy for the short AND the long term
To get the short term and the long term working together, we think there are three things your strategy needs to do:
2. It needs have an implementation focus:
Most strategies overestimate the impact of big, far-out changes & underestimate the impact of smaller changes. But a good strategy recognises the importance of smaller actions - that are often easier to implement - and prioritises these. It focuses on things you can control. It is not reliant on big, one off changes that require significant retailer support.
For instance, when it comes to merchandising and fixturisation, the focus ought to be on developing clear & simple SRP across the range. This is something within a manufacturer’s control and can be implemented relatively quickly. Within a matter of weeks, it can be live in store and having a real impact on how shoppers navigate the fixture. Unlike more complex fixturisation projects that look amazing as a concept, but require significant resource & retailer buy in. And, let’s be honest, hardly ever make it beyond the trial store phase.
1. It needs to set out WHAT to do and HOW to do it:
Many strategies are loaded with motherhood statements such as “right range” or “right promotional strategy”. This is meaningless for telling you what to do. A good strategy tells you what to do and how to do it.
For instance, in an eCommerce strategy, one of the longer term “WHATS” ought to be about having a portfolio of products that have a strong fit with the eCommerce shopper (younger, more affluent families). In the short term, “HOW” you do this means prioritising products within your current assortment that eCommerce shoppers are more likely to buy. It means directing investment to these products (promotions, activation, search optimisation). In the longer term it may also mean developing products that you don’t already have (larger multipacks, premium tiers).
3. It needs to have clear sequencing:
In our industry, change rarely happens overnight. Instead, it comes about as a result of small steps of change that add up to some striking shifts. A good strategy identifies the key steps you need to take – what you need to do now, do next, and then do later.
For instance, Healthy Snacking is now a reasonably mature category, but this didn’t happen in an instant. Instead, the likes of Graze started their physical presence in stores by building their assortment of singles in Convenience; then they drove consideration through temporary activation and feature space; next, came the launch of multipacks in supermarkets; and lately they have increased space for the category, both in the home aisle and in the food to go area.
A good strategy delivers on each of these three elements. It helps direct what you do in the short term AND makes sure that the actions you take work for the longer term.
Does yours?
If you want to more about how we can help you develop a Category, Channel or Shopper Marketing Strategy that delivers in the short term AND the long term, drop us an email or give us a call: