2016 was a tough year for brands. Retailers like The Limited and American Apparel filed for Chapter 11, the latter for the second time in 12 months; Macy’s and Sears struggled; electronics giant Samsung faced product crises, and corporate scandal threatened automaker Volkswagen.
For brands hoping to weather such storms and come out stronger, and for all brands seeking growth in a challenging, volatile environment, what’s the right strategy? Consumer brand leaders like to think big. But increasingly, the way to win big, and grow big, is to think small.
The reason is the new consumer — accustomed to information and choice, drawn to products specifically designed to fit their needs, and skeptical of those that stray too far from their core promise. They want authentic, credible brands.
Think small and you can reach them. By “think small” we mean: Focus on the brand’s promise, carefully craft products to satisfy the target consumer’s needs, and develop a simple retail strategy to deliver the brand proposition.
Thinking small doesn’t mean staying small. But it does require a new mindset and new business practices.
Tory Burch shows how to do it. The brand has reached the $1-billion mark by growing steadily and with restraint. Its singular design aesthetic and product quality remain consistent. Management has turned its back on growth opportunities that are at odds with the brand.
Quiksilver, by contrast, thought big and lost big. By expanding into new brands and acquiring its way into new arenas like skateboarding and snowboarding, it lost its connection to its surfer roots, and to its core customers. Surfing-oriented competitors like Hollister swooped in, and Quiksilver filed for bankruptcy in 2015.
There are many examples of the right way to think small. Nike maintains an unwavering focus on athletic performance and quality. Apple focuses on innovation and limits its product range, making sure its whole product line will fit on a dining room table. Trader Joe’s offers a focused assortment — just 8% of the SKU count of a typical grocer — which supports a smaller store footprint. Patagonia stays true to “environmental activist” brand values. Amy’s stays focused on organic, vegetarian foods and consistently communicates “family owned” values.
To grow big by thinking small, follow four basic rules:
Consumers have lots of choices. So do brands — about how to go to market. But the worst mistake you can make is to broaden your target customers, dilute the brand and chase every new opportunity. Instead, think small — it might just be your key to winning big.