How many of you have watched ‘The Truman Show’?
The film starred Jim Carrey as Truman Burbank. Truman was the star of the Truman Show, a reality TV programme broadcast around the clock.
Truman lived in the fictional seaside town of Seahaven Island. The town was a Hollywood set within a giant dome equipped with thousands of cameras to monitor all aspects of Truman’s life. The residents of Seahaven were all actors – acting out a script and repeating lines fed to them by the show’s producers.
Truman was the star of a reality show that he was completely unaware he was in.
It was only when Truman started noticing unusual events (e.g. a radio channel that describes his movements) that he starts becoming suspicious about his life. This leads to a sequence of events – too many to mention here – that ends with Truman sailing out of Seahaven, through the dome wall, to freedom.
For 30 years Truman Burbank had been living the story. He only knew what he knew. In contrast the audience watching the Truman Show could see everything that was happening.
Truman was inside the frame. Everyone else was outside the frame.
Why are we talking about this? Well, in our industry, it is easy to be inside the frame. We are all very close to our categories and brands. We live and breathe them everyday. We often see what we are trained to see. We often do what we are trained to do.
This means that in the current times of change (e.g. changing macro environment, changing channel and category landscapes), the temptation is to protect. How to protect sales of our current products in our current categories in our current channels?
When you are in protection mode, you focus on what you have. You have a narrow view. But, in times of change, you need to look at what you could have. You need to have a broader view. You need to step outside the frame.
So how can you do this?
Where To Sell. Inside the frame = look at where you currently sell. Outside the frame = look at where you could be selling. Look at the latest IGD growth forecasts. The declining channels are Hypermarkets and Supermarkets. The growing ones are Convenience, Discounters and Online. So, do you swim against the tide – try to protect business in large supermarkets? Or do you swim with the tide – go after business in the growth channels? Whatever you think about Jack’s, it is a move that responds to where the market is heading, not where it has been.
It is not just that change is happening. It is the scale of change. For instance, a manufacturer could afford to ignore the Discounter & Value Channel when it was 5% of the market. It is much harder to ignore when it is 15%+. It is the same with Amazon. It is a small player for most FMCG manufacturers right now. But that might change very quickly. Stepping outside the frame is about looking at where sales will come from in the future not just where they are coming from now.
What To Sell. Inside the Frame = look at what you are currently selling. Outside the frame = look at what you could be selling. Just over ten years ago the iPhone didn’t exist. Now it is easily the biggest contributor to Apple sales. Ten years ago if you wanted to find a healthy savoury snack you would have had to do some searching. Now they are everywhere. What is sold in your category in 10 (5… 3…) years’ time could be very different from what is sold today.
We think Coca Cola is a good example of a company swimming with the tide. They are looking at where the market is heading and diversifying their portfolio = water, fruit juices, iced tea, coffee. They are also adapting in their carbonated drinks heartland. Their latest 6 sheet poster has a picture of Classic Coke and Coke Zero Sugar with the line “with sugar, without sugar, you choose”.
How To Sell. Inside the frame = look at how you currently sell. Outside the frame = look at how you could be selling. Razors & Blades is an interesting example. Gillette had the market sewn up. A tried and tested model – cheap razor, expensive blades, upgrade every 3 years or so. All was fine. Until Dollar Shave Club came along (then Harry’s). They challenged the traditional selling model. They offered a new way of selling.
It is one that Gillette has had to follow (they have a subscription model now) and acknowledge (recently we saw a large Gillette Fusion pack of blades being supported with the message “10 months of shaving”). Did Gillette think about a subscription model? Probably. Did it look risky to do it? Probably. So, they didn’t do it. Then someone else came in and did it anyway. It is much better to disrupt your own model than to be disrupted.
We are not saying that any of this stuff is easy. It’s not. It’s hard. But it is often the hard stuff that is most important to do.
It took Truman Burbank 30 years to figure our what was going on and then do something about it.
Hopefully it won’t take the rest of us that long.
Feel free to forward. Have a great weekend and speak to you next week.