When elephants battle, it takes caution to keep clear of their feet. But the nimble field mice can dart in and out, gathering the threshed corn and setting themselves quite a feast on the sidelines.
If a newly launched product does not reach the expected millions in sales by the end of the first year's sales cycle, it is ruthlessly chopped. Supermarkets in turn are cutting down the product lines on the shelf, to one or two by the majors, and the rest their own brands.
The drive for efficiency cuts deep. Just last week Unilever warned it was cutting its world marketing staff by 800 jobs and some $500 million in costs. Unproductive products will be trimmed - as will its marketing and advertising budgets.
It is all economically rational, sewing loose ends and "trimming of the tails". And it's great news for the also-rans. Because every time one of the big players cuts back, it's an opening newly created. It means the customer has less and less variety of choice. And it gives an opportunity to the small manufacturer or the startup with a good idea.
Look around, you'll see them everywhere. Some of the newest trends are also some of the oldest. Most obvious is the boom in farmers' markets, in every country town and it feels like, every city suburb. Once a week, or once a month, the chalked blackboard signs pop up on the highways and a flood of passing cars drives in. Farmers' markets don't necessarily offer better prices - our supermarkets are pretty cheap anyway - but they give us the variety and feeling of choice we demand.
The other booming market is electronic. You don't even need a table and umbrella to open an on-line shop for your goods. And you don't need to pay shopping centre rents for the shopfront - on line, every fresh browser page is a store window.
They also don't have to be in your neighbourhood. Amazon is everywhere in the world, with a growing range of products. For that matter there are thousands of small business trading through eBay.
Sometimes on-line can be aggressively competitive, like Ruslan Kogan's fast-growing electronics retailer, Kogan Technology. "Work out what your competitive advantage is and flaunt it,” he says. His advantage is not being encumbered by bricks and mortar stores or rents. He then flaunts it in the faces of Gerry Harvey and JB HiFi.
For Kogan the rational economics of the big boys give him strength. As he said last month, “We teach our staff to swim upstream, to innovate continuously, to question absolutely everything. It’s in the culture of the organisation.” His philosophy is working - he was tagged as Australia's richest person under 30, a year ago, and has set up a subsidiary in the UK that is run remotely from Australia.
Our field mice are small and agile and able to quickly change in response to customer demands or fashion whims. They jumped on social media for intimate contact with their customers, they are creating a new shopping experience. In the US they have already started to take nibbles out of market share, just one or two percent but growing rapidly. They'd better watch out.
No comments:
Post a Comment