Most retail, consumer and luxury brands are starting to report positive sales and profit margin growth. This is good news, but let’s face it, the sales growth is against terrible numbers last year and the margin growth is through tight inventories and aggressive cost reductions. And with easy comparisons until October, the news is likely to look pretty good for the next two quarters.
Unless the economic outlook improves dramatically, for most companies it will become clear that they are not getting back to pre-recession levels of business any time soon. Going forward, growth is likely to remain muted and margin rate improvements are going to be tougher to come by. So the real question is what are companies doing to drive market share growth? For many companies that reduces down to this: what are they doing to drive share of customer growth?
When it comes to taking action on share of customer growth there are only two types of companies. The first is the company that may have a corporate strategy (often exemplified by big binders of strategic and long-range financial plans sitting on shelves), but does not have a customer strategy. That is, they don’t have deep consumer insight, they haven’t developed actionable customer segmentation, they don’t have segment specific marketing plans, they don’t have truly useful customer value metrics and they aren’t part of the conversation age. For these types of companies they need to commit to developing a customer strategy and they need to move with great focus and commitment. Now.
The other type of company has a reasonably well articulated, pragmatic customer strategy (or they are close enough that they can realistically move into action). With business improving and many competitors still trying to figure out what to do, these players have a once in a generation opportunity to press their advantage, whether that is through opening new stores, creating a compelling multichannel experience, developing a leadership position in location-based marketing or through many, many other possible leverage points.
The answer for both is the same: Get in the car and drive!