BUSINESS BANDITS AND MARKET SHARE THIEVES
Consumers now more than ever are open to discovering new brands, particularly digitally native brands that offer a sense of inclusion and community.
There is a modern-day heist underway by brands that are brave, agile, and resilient. The bounty is big and if captured could catapult a brand ahead of its competition stealing market share like a thief in the night. Besides a shakeup in market position, we also believe M&A opportunity will emerge over the next few years as a direct result of a company’s actions during this time.
Zoom leaps to mind as a company that became a front runner in the competitive web-based conference software industry sprinting ahead of companies like GoToWebinar, WebEx, WhatsApp, and others. Since March 2020, Sendor Tower a market intelligence firm reported Zoom’s first-time installation of their mobile app has jumped 728%. The platform’s paying customers have more than tripled. At Zoom’s height of usage, it reported there were more than 200 million participants using their application. The Zoom team anticipates roughly $1.8 billion in sales this year which is nearly twice as much as their March forecast.
Consumer behavior has shifted due to COVID-19, creating tremendous opportunity or a need for brands to pivot. Being respectful of the balance sheet is always a good practice however there is also a time to take chances, assume some risk, and gamble on growth opportunities.
We have all seen the stories about brands slashing expenses, pushing out launches, postponing marketing spend, and letting go of top talent. Certainly, in some cases, this is necessary. Other brands have taken an alternative approach. They tie on their red business bandana and with ninja-like skills wield their marketing swords to capture the attention and spending power of the consumer. In fact, we predict these brands will be thrust to the top of their industry well beyond the eventual passing of COVID-19.
Consumers now more than ever are open to discovering and buying new brands, particularly digitally native brands that offer a sense of inclusion and community. This is an opportunity for smaller, lesser-known brands to step up and engage with their target consumer and lure them away from the traditional legacy brands.
After being locked up and binging on pandemic snack food, we are now heading into the summer season and the dreaded swimsuit selection predicament. Typically, this quest would require countless trips to store dressing rooms tugging, turning, and adjusting to select the right swimsuit. With many stores closed and the public’s concern for safety, this task is made even more difficult. With the current shopping challenges, consumers are turning to digitally native brands designed to meet their needs without experiencing the product in real life. Swimming away with consumer’s money and shifting market share is Andie Swimwear, an on-line luxury women’s bathing suit company offering sizes from XS-XXXL. Between their “fit quiz” and “fit experts” they promise to find a woman the perfect swimsuit from the comfort of her own home.
While it might seem like Andie was perfectly positioned to capitalize on this timely opportunity, the team at Andie had to find a brave way to deal with launching their seasonal suites. As an e-commerce brand, Andie relies on digital marketing which is highly visual. Normally, their team would produce a well-orchestrated photoshoot of their new line at tropical beach destinations with models, stylists, and the magic of photoshoots. However, in 2020 travel restrictions and quarantine made this impossible. The team at Andie decided to use their own staff and friends as models and do their photoshoot in their backyards as they sheltered in place. Melanie Travis, founder and CEO also spent more time engaging with consumers and creating communication via Instagram and SMS. Her timely, authentic, and relatable tone and content took a very personal and sometimes difficult task (swimsuit shopping) and made it fun.
Speed, responsiveness, and directing resources to initiatives that matter is the new business mantra and is essential to answering market needs. Lengthy bureaucratic processes, long lead times, and comprehensive budget assessments are being replaced by fast decision making and laser-like focus on doing the essential things that truly matter for a business. Companies that can become more agile will rapidly surpass their competition while those who stay moored in cumbersome processes and drawn-out approval requirements will miss out on opportunities and have market share stolen without ever seeing it.
With the travel industry in complete disarray and luxury brands scrambling to provide consumers with a value proposition that is timely and focused on their need for safety, Four Seasons rose to the challenge and demonstrated its ability to be agile.
On May 13, Four Seasons announced a collaboration with Johns Hopkins University to “validate it’s new global health and safety program, Lead With Care, and provide ongoing, real-time guidance on the evolving COVID-19 situation.” This swift and calculated move is answering a consumer need for safe travel as well as provide employees with a safe workplace.
As luxury hotels are forced to pull back on many of their premium offerings which drive their price point, Four Seasons ability to be agile and pivot to providing guests with the reassurance of safety is remarkably astute. As any sailor will tell you, it’s important to continually make adjustments to your sails to stay on course to your destination. During this time and always, businesses must be agile. Time will tell if this collaboration will result in stealing share from other luxury brands, but we are most certainly betting on this business bandit in the long term.
Having the ability to withstand, overcome, or rebound from difficult conditions is essential for every business, but particularly during this time. Flowers may not normally be something you would consider to be resilient however Christina Stembel, CEO of Farm Girl Flowers, is a perfect example of being resilient.
Farm Girl Flowers is a 10-year old on-line retailer of flower arrangements doing an estimated $50 million in annual revenue. In a recent interview Christina Stembel gave to Future Commerce Podcast, she shared her story of being given 12 1/2 hours to shut down her operation in San Francisco as the shelter in place order was given due to COVID-19. 80-85% of her business was done by 200 employees. Customer orders were already in the system and hundreds of thousands of dollars in perishable inventory were in transit to her company from the growers.
She had to furlough her staff and donate or throw away $150 thousand in flowers. Orders went down 60% immediately and Mother’s Day was right around the corner. Thankfully, she had a small distribution center in Ecuador with farm partners which launched January 5th. Out of necessity, she quickly pivoted her business to the Ecuador operation which required an expedited plan to build the infrastructure, hire and train staff, and redirect order fulfillment to the new location. She also opened four additional fulfillment centers in a month, requiring repositioning of equipment, training staff to make bouquets, and sorting out the computer systems and order processing all within about 5 weeks.
As of early May, Mother’s Day orders looked strong, and the bounce-back was happening quickly. All indications show that Farm Girl Flowers sales will be on track for 2020 and consumers may have found a new way to send flowers.
At Buzz Beauté, we applaud all the daring business bandits and market share thieves out there that have pivoted their businesses and demonstrated how to be brave, agile, and resilient through a global disruption. In the years to come, we are excited to see how companies like the ones mentioned above and others will benefit from choices they made in the past few weeks. If you would like to contact Buzz Beauté for D2C strategies contact us at email@example.com.