3 Common Challenges Brands and Retailers Face in Tough Trading Conditions
“The CEO called. They want you to meet in their office right away. A trend has been missed and they want you to explain why we haven’t done it.”
Have you ever been in this situation?
When you’re in charge of telling a global corporate what the trends are, this is your biggest nightmare.
Founder and CEO of TrendBible, Joanna Feeley shares observations on the common challenges brands and retailers face, with guidance on effective strategies for overcoming these hurdles.
How did we miss it?
The trigger point for some companies investing in trend forecasting is that they have missed a trend. They see their competitors jump on a new product or meet the needs of new consumer attitudes and behaviour and dominate the market.
There have been several companies struggling recently as we face more difficult trading conditions. Over the years, I’ve had too-late conversations with companies who know things are going wrong, that change has happened and that they’ve failed to keep pace with how the market or consumer has shifted.
When trading is tough, there are 3 common challenges I see amongst brands and retailers that prevent them from growth:
1. Over-reliance on core product
It can be tempting in times of high change just to sit tight and do nothing at all. Granted, you’ll always have ‘perennial’ or ‘timeless’ segments of your product range that don’t change, but part of a good range strategy is having some newness in there. Whether you have a tangible end-product or not, you’ll need something fresh to say to your audience to remain relevant and timely. This is where trends come in. The key is picking the right trend. There’s no point picking a trend that doesn’t fit well with your ‘timeless’ qualities (for which you’ll always be known), it will be immediately obvious to the consumer if it’s off-brand, which causes confusion.
“Hitting the sweet spot between Timeless and Timely is the key to being supremely relevant and is critical to thriving in turbulent trading conditions.”
It’s not good to rely too heavily on core product, or to rely too heavily on a ‘timely’ trend product – you have to get the balance bang-on in order to hit your commercial objectives and have something fresh to say to your customer. You also have to de-risk the newness and ensure it’s the most relevant, appropriate, and desirable thing you could put in front of your audience at that time.
2. Not understanding when to action a trend
It’s one thing to know what the next trends are, it’s another thing to know precisely when to act. I’ve seen companies go too early, launching a product that gets a lukewarm response, followed swiftly by the pressure to shelve the idea – only to see the rest of the market develop the same product 6 months later and clean up.
“Knowing your customer and what’s influencing them outside of their relationship with your product category is critical to getting your timings right.”
Householders and consumers often cross-pollinate behaviours and tastes from one area of their life to another. The alcoholic drinks industry has been disrupted by the fitness industry, the baby soother industry has been disrupted by the sustainability agenda, and the shampoo industry has been disrupted by veganism. My point is the most important shifts often come from outside of your immediate category. Being sure about when this will influence your customer is critical for commercial success.
3. Not lining up what’s next
I once had a flooring company call up and say although they were still enjoying the success of having a number one selling grey carpet in their collection, they had noted sales had slightly started to drop off versus the previous few years. This often sparks panic and having ridden the crest of a wave so confidently; companies now start to wonder what the ‘next big thing’ is.
“You need to have a really sound innovation and testing process to stand a chance of having your next number one seller waiting in the wings.”
Having a strong performing product with no evidence of what will replace it is risky territory. Riding the crest of a trend is wonderful but also terrifying. Everyone knows deep down it can’t carry on forever. What commonly happens is product teams see the golden product start to fail, and then start to guess what will replace it.
Investing in the ‘future’ consumer for some businesses can feel risky, particularly when it comes to budget rationale and dealing with the challenging trading conditions in the present moment. The most resilient companies have a really solid trend forecasting process in place, including clear budget planning. We’ve created a practical guide designed to help companies who are new to trend forecasting think about how they will develop a rationale and approach to setting aside resource and budget.