What are trends for?
In the minds of most businesses, trends are see as things to follow. They represent the movement of the market in a certain direction, and thus to follow the trend is to follow the money.
The formula is pretty basic:
“X is starting to become more important to consumers, therefore if we offer X we will increase our relevance and grow.”
It’s logical, consumer-centric, and of course completely and utterly wrong.
The reason for this should be obvious to readers of this newsletter. All strategically sound businesses have a fixed value offering, or if you prefer “job” to do in the market, and in order to carve out market space and grow brand equity they need to deliver on it consistently. If they go against their role by following a trend that isn’t aligned with it then not only will they fail to capitalise on the trend – they’ll destroy their existing position too.
For a case in point look no further than the recent troubles faced by Waitrose, the UK’s “posh” supermarket.
For those who haven’t been following, the chain that was once beloved of the aspiring middle classes has taken a beating both in its reputation and its finances. Why? Because it committed the sin of trying to “keep up with consumer needs”.
As you may have noticed, the UK and indeed much of the world has been struggling with a “cost of living crisis” that has forced many consumers to economise. At the same time, budget supermarkets such as Aldi and Lidl have continued to rise, as many punters (even middle class ones) have come to see that they aren’t so bad after all.
The trend narrative then has been clear: consumers are struggling to make ends meet, and are seeking out cheaper options.
So what is a brand like Waitrose to do?
Well, if they’re like any other trend-chasing market-share-obsessed organisation, the answer is obvious: cut service, cut prices, and in doing so “serve emerging consumer needs” and steal share from their budget competitors. And of course this is just what they did – only it didn’t work out quite the way they expected.
The problem lies in the fact that Waitrose’s market role – their destiny even – is to be the posh premium supermarket, whether they like it or not. Regardless of “trends” they cannot change this. By chasing their budget / mid-market competitors down the price rabbit hole they 1) fail to convince price-sensitive shoppers to switch because hey, they’ve already got good options in this space, and 2) they betray their core audience by damaging their once fabulous product.
Waitrose are but one example of this trend-chasing error. In truth it befalls almost every strategically mediocre business, especially those under pressure to grow from shareholders, and the pattern is always the same:
- Grow by delivering value X
- Observe the growing popularity of value Y
- Chase growth by offering Y at the expense of X
- Ultimately fail to deliver either and suffer
We might call this process the “trend trap”.
So what lessons should we take from this? I think there are three.
LESSON 1 – YOU CANNOT CHANGE
This is one of the strategy truths that’s hardest for business to grasp, but it’s key. You are what you are. You’re stuck. You cannot change. Your business has been selected by the market to fulfil a certain role, and it has no interest in you doing anything else, even if you want to.
For a business to switch strategy is like a frog deciding to become badger – it’s futile because it’s simply not in its nature. It doesn’t correspond to its component parts, nor the way that the ecosystem receives it. All it succeeds in doing is becoming a shit frog and even shitter badger.
LESSON 2 – TRENDS ARE OVERHYPED AND NOT UNIVERSAL
In the grand scheme of things, even the mightiest trends are seriously overblown. For the most part things don’t really change – or if they do they change so slowly that businesses adapt to them organically and imperceptibly.
The reason for this misleading hype is twofold: first, people love trends because they seem like free money, and so will latch onto them and blow them up regardless of their true scale. And second, many trends (especially these days) have corporate sponsors who have an interest in promoting them.
Always ask of a trend: who benefits? Because although it probably isn’t you, it sure will be somebody.
LESSON 3 – TRENDS ARE RELATIVE TO YOUR STRATEGIC POSITION
Finally, and most crucially, recognise that all a trend represents is a change in the context in which your business operates. How you respond to it is entirely determined by what it means relative to your current strategy. This leaves you with three possibilities:
- If it is aligned with your strategy they happy days, it’s an easy opportunity to push your position further and profit
- If it is against your strategy (as cost of living is with Waitrose) then this is an opportunity to push against the trend for extra standout and creativity, or to take advantage of the vacated market space left over from other naive trend chasers
- And finally let’s not forget the possibility (nay, likelihood) that the trend has nothing to do with you whatsoever! There’s nothing wrong with taking no position on it at all. Believe me, if it actually matters, it will seek you out, and the solution will become vividly apparent
At the end of the day, we must recognise a sad but crucial fact:
Sometimes market conditions evolve in a manner which isn’t ideal for our brand.
This doesn’t mean we’re screwed, and it certainly doesn’t mean we should change our strategy. It’s just luck, like the weather. Brands who thrive, who have built their house on the rock not the sand, are those with a firm grasp of strategy and the courage to stand firm.
For them there is no bad weather, and there are no inconvenient trends – only another challenge to be navigated and overcome.