Marketers beware the ‘growth killer’ of convergence
Marketers have the potential to drive sudden, accelerated growth for their brands if they can avoid the twin dangers of convergence and sideways innovation, according to Marketing Week columnist and Passionbrand founder Helen Edwards.
Speaking at the Festival of Marketing: The Year Ahead last week, Edwards outlined why a number of industry factors lead to product convergence between competitors, helping to solidify category norms over time – often despite the best efforts of marketers to break away. The trend sees reduced differentiation and the gradual evolution of a ‘truce’ between rival products.
Some factors, such as regulations that delay the use of new ingredients or the fact some sectors have a limited supply base for raw materials, can be beyond the control of marketers. But other activities can see marketers make the issue worse, said Edwards.
These include lazy research in the name of customer centricity, where competing companies ask the same questions of the same shared customers, she argued. In addition, global brands decide to protect their position in established markets where they are dominant, leading to cautious behaviour in emerging markets where they have a smaller market share and the potential for greater growth.
“Convergence is a growth killer. Convergence is a problem,” said Edwards. “Your brand can’t stand out. Brands then cluster around points of parity in the category, the category gets robbed of its dynamism, commoditisers and discounters tend to settle in and a sort of low stakes truce arises.”
Because marketers tend to be ‘doers’ they seek to solve this problem, with the converged situation leading them to employ lateral innovation.
Convergence is a growth killer. Convergence is a problem.
Rather than driving genuine growth this means incremental uplifts from brand extensions such as new flavours and variants, or limited edition, collaborative and seasonal versions of existing ranges. The approach can see brands caught up with new initiatives that in fact just distract them from real change.
“The most high profile form of lateral innovation is wanting to go DTC [direct-to-consumer]. I’ve heard it so much from mainstream, traditional retail brands. They all want a bit of that DTC pie,” she warned.
“But in the end we are still selling the same product or service through a different channel. It’s not a new idea. It’s not really innovation.”
She noted that many of the brands that started via DTC channels are now extending their offer to more traditional physical shops.
Marketing in the 21st century is in danger of being remembered as “the great leap sideways,” Edwards explained. She offered a series of ‘small solutions’ to address the issue, but added that fundamental change is more likely to deliver real, substantial growth.
The key to that is to acknowledge that we are entering a new age that is likely to be substantially different from the past and to play a role in shaping it, said Edwards.
“Stick to your brand DNA, but aim for bigger,” she said, advising brands to pause to think rather than rushing to deliver for the next quarter’s results. Instead they should take time to identify opportunities for real, transformational change by answering different questions, she suggested.
Reducing the ‘friction’ of too many choices makes your buyer’s decision easier
Chief among those should be how to take inspiration from – and help to define – the age we are entering.
“What is this going to be the age of?” she asked, suggesting that it will be very different to the agricultural, industrial and information ages we have known in the past. Edwards suggested three alternative ages that brands could utilise and help to shape.
These are the Age of Recombination (putting existing things together in new ways), the Age of Eccentricity (where fringe lifestyles become increasingly mainstream) and the Age of Zero (where we all move beyond ambitions of zero carbon and zero waste to reduce our own levels of choice, in the interest of reducing waste and emotional clutter).
“When you get two forces colliding, sudden growth can result,” said Edwards. But to find them, marketers need to avoid the two ‘growth killers’ of convergence and lateral innovation.