The New Normal

Are you adapting to the changing marketplace?

So, we’re back.  Have you missed us…?  Maybe don’t answer that one!

A lot has happened over the summer.  We’ve voted to leave the EU.  We have a new Prime Minister.  We will have a new leader of the opposition, who will probably be the old one.  And for the sports fans amongst you, we’ve had a brilliant summer of sport.

Indeed this summer has appeared to establish a new normal in British sporting performance.  We used to struggle to win Olympic Gold Medals, now we can’t stop winning them.  We had to wait 77 years for a British male Wimbledon champion, now we’ve had a winner twice in the last three years.  The England one-day cricket team used to struggle to score 250 in a game, last week they posted a world record score of 444-3.

Whether it is sport, politics, how we listen to music or watch TV, a new normal is being established.

The new normal applies just as much in the FMCG and retail industry.  Think back 10 years.  It was all about the Big 4 supermarkets.  It was about large out of town stores.  It was about more range.  Brand leaders were king.  There was food price inflation.  Growth, whilst never easy to come by, was there for the taking.  Jump back to 2016 and nearly every one of these things has changed.

Growth is harder to come by than ever.  Competition is more intense.  Brand leaders are being challenged from all sides.  Value is being scrutinised more than ever.  Ranges are being reduced.  We could go on.  How are you feeling right now?  If you’re a glass half empty type of person, you are probably getting pretty nervous.  Times are tough, right?

But, if you are a glass half full person, you are probably thinking ‘bring it on’.  It might sound counter intuitive, but it is often in times like this where the biggest opportunities exist.  In this environment, you can’t do what you did before.  You have to adapt to the ‘new normal’.

So, what do we think are some of the ‘new normals’?  And what opportunities might they present?

New Normal = Channel Blurring.  We are seeing an increasing blurring between retail channels.  Grocery is developing more food to go and meal offerings.  Convenience retailers are doing the same and upping their game in fresh food.  Food service outlets are staying open longer and offering better, more convenient solutions.  Deliveroo are giving us more access to takeaways than ever before.  Hello Fresh is giving people high quality, convenient scratch cooking solutions.

Opportunity = There are more meal occasions to go after than ever before.  Quick, easy, tasty (often healthy) meals are a key battleground.

New Normal = Solution Selling.  It used to be the case that if you made biscuits, then you just needed to have a better biscuit than the competition.  If you made yoghurt, you needed to have a better yoghurt.  Now you have to be the best solution.  Competing for the mid afternoon snacking occasion?  Then you have about 50 potential competitors.  Coming from a host of categories.

Opportunity = Think beyond your direct competitive set.  Know who you are competing against and what it takes to win in the key usage occasions you are targeting.

New Normal = Repertoire Buying.  Good quality products have always been important.  But good products from established brands could always rely on reputation.  People often bought them because they had always bought them.  However, for many brands, loyalty has weakened.  In many categories, shoppers think ‘good enough is good enough’.  Many shoppers are buying from a repertoire of ‘good enough’ choices.

Opportunity = For challenger brands, the playing field is more level than ever before.  For brand leaders, it has never been more important to establish a clear performance (and emotional) advantage.

New Normal = Polarisation of Needs.  Gone are the days when we all shopped once a week at the same store and topped up at the local shop in between.  Now, our needs are constantly changing based on circumstances.  Some purchases are becoming increasingly automatic (and will continue to do so – Amazon Dash buttons are on the way to the UK).  Some purchases are becoming even more considered.  Sometimes we are looking for health, sometimes we are looking for indulgence.  Sometimes we cook from scratch, sometimes we don’t cook at all.

Opportunity = Adapting what you sell (product, pack formats) and how you sell (merchandising, selling models) to meet the most relevant needs for the categories you operate in and the channels you sell through.

Is the old world better or the new one?  Actually, it’s a pointless question.  We are operating in the new one, so that is the only one that matters.

Apparently, ‘all failure is failure to adapt’, whilst, ‘all success is successful adaption’.  If that’s true, the winners over the next few years will be the ones who best adapt.  Adapt to the new normal.

If Team GB can win 27 Olympic Gold Medals, there is a lot of possibility out there.

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

© 2020 by Insight Traction