Legacy brands have today many opportunities to seize, to expand profitably. It’s time for them to take back the lead.
E-commerce, digital marketing and new pure players are changing consumer goods industries to become more consumer-centric and focused on new needs and usages.
This new ecosystem is also breaking down traditional barriers between distribution channels and product segments, creating strong growth opportunities.
So far, this new space has been occupied by new entrants that make the buzz, concentrate all the attention and are presented as new “gemstones”.
In reality, these new comers have invested heavily for only few well-known successes (e.g. Dollar shave club, The Honest company, Casper).
In consumer products industries, they have spent more than €90 Billion of fundings over the last 5 years, in approximately 10,000 new ventures; while at the same time, there have been less than 10 unicorns in the same sector.
It is actually much easier for traditional and well-established brands to embrace these new growth opportunities than for new insurgents; they have all the required weapons to do so:
- Established brand(s) with customer trust
- Industry expertise and development capabilities
- Deep consumer knowledge
- Distribution know-how
Key to success relies on their ability to be “consumer-pull” and “singularity-push” at the same time:
- “Consumer-pull” to identify new consumers unmet needs with in-depth 360° analysis of the customer journey
- “Singularity-push” to leverage brands unique capabilities and assets to prioritize and push disruptive ideas (technical edge, brand image, distribution know-how, channelization expertise, category management, etc.)
Dyson is a good example of a brand that has successfully entered new market segments combining a “consumer-pull” and “singularity-push” approach, leading to increased revenues and profits by more than 4x since 2010(1).
Exhibit 1: Dyson new product and performace
More recently, they entered hair dryers market with a new product breaking with industry standards and answering consumers unmet needs: appealing, noiseless, fast, protecting hairs and travel friendly.
Despite a 399€ price, the Supersonic has captured 8% market share in Europe in year 1.
By refocusing on customers’ unmet needs, legacy brands have fantastic opportunities to seize.
They are facing a “Winner-Takes-All” situation:
the first able to transcend its customers’ longlasting trust with new “Pop-up” experiences and offering(2), will grasp these new profitable growth spaces.
- Laurence-Anne Parent | Senior Partner | In charge of Retail and Consumer Goods practice
- Fayçal Baddou | Manager