Architecting Success

Architecting Success

Architecting Success

Brand architecture – the organizational system or structure underlying a portfolio – is something we don’t typically notice when it’s working well. The best examples go undetected: consumers naturally grasp a brand’s offering through carefully designed naming, color scheme, packaging, messaging hierarchy and organization of the physical or digital shelf. Like the bones of a house, we notice architecture only when it’s flawed – or worse, absent. Amid SKU proliferation, channel fragmentation & cluttered messaging, brand architecture can mean the difference between a product being selected or abandoned in a matter of seconds. This article unpacks brand architecture – when and why it works or doesn’t – with the goal of positioning it alongside other foundational tools in the brand management toolkit.

  • Companies managing multiple brands in the same category need to create clear “swim lanes” to ensure brands in the portfolio work together – not in competition – to capture a greater share of the pie. Especially in big CPG firms, companies often jump on a trend and leverage scale to deploy it broadly. Consider a pet company with multiple brands of dog food. Seeing the migration of “grain-free” from human to pet eating patterns, they might add a grain-free SKU to each of their brands. Without a clear portfolio architecture, lines between brands become blurred. Perceived differentiation declines, and along with it, willingness to pay.
  • Individual brands in growth mode find themselves in the (enviable) position of launching new products to reach incremental consumer segments, needs or occasions. Motivated by a desire to bring products to market quickly, these brands create new sublines, formats and/or varietals – but then encounter challenges when consumers are forced to discern differences between legacy and new products. Consider a juice manufacturer responding to consumers’ desire for less sugar and fewer calories. The creation of a new “Lite” subline to complement existing “Diet” products, while well-intentioned, may ultimately confuse shoppers who lack the time or patience to read nutrition panels.

Enter architecture, the art & science of organizing a collection of products or brands to drive clarity, distinctiveness & incrementality. Successful businesses use architecture to penetrate new consumers and/or need states, help shoppers quickly intuit differences across a portfolio and even create guardrails for innovation.

While there are numerous ways to organize a portfolio, most ladder up to one or more of the following:

Brands organize portfolios based on price tier, often in the form of a good / better / best construct.

Example: Composite decking company Trex offers products in four tiers – Trex Enhance® (Good), Trex Select® (Better), Trex Transcend® (Best) and Trex Signature® (Luxury). Differences in warranty duration, available colors, heat resistance and durability justify price differences and shoppers choose a product that matches their budget and definition of value.

Brands organize portfolios based on a highly discernible product attribute like flavor, ingredient type or format.

Example: Ferrara’s Nerds candy offers consumers four ways to enjoy: classic, rope, big chewy & gummy clusters. This architecture has myriad benefits, from courting consumers who typically buy other formats (e.g., gummy lovers) to justifying incremental shelf space and commanding a premium for novel experiences.

Brands organize portfolios based on the end users for whom the products are designed, often corresponding to specific markets or channels

Example: CLIF bar offers products for kids (ZBAR), women (LUNA), protein-seekers (BUILDERS) and hardcore athletes (BLOKS). Through this structure, Mondelez can not only recruit new consumer segments to the franchise but also prioritize distribution in specific channels like sporting goods stores.

Brands organize portfolios based on what the product does for consumers.

Example: OLLY famously pioneered benefit-led communication in the vitamins & supplements category. While the brand targets wellness-oriented women 25-44, its portfolio organized by sleep, mood, beauty, gut health, women’s health and immunity allows Unilever to effectively show up for VMS shoppers prioritizing these benefits while informing distinctive memory structures (sleep = purple, gut health = green).

In the case of newer categories that require more consumer education, like, say, nootropics, it’s often appropriate to organize based on one of the first two dimensions (i.e., what the product is). In our experience, however, some of the best brands organize their portfolios based on an amalgamation of these dimensions – effectively combining what it is with who it’s for and what it does.

The world’s largest hospitality company with 39 brands, Marriott understands architecture well. Take its flagship and namesake brand, which spans the select service, premium & luxury tiers. Each brand has a unique set of services and amenities, offered at varying nightly rates (what) inspired by distinct traveler profiles (who) and how they view the role of a hotel in travel (why) – united by the master brand’s core visual identity and brand promise.

  • Courtyard by Marriott is for value-conscious guests who want convenient, flexible, no-frills travel experiences
  • Marriott is for conservative travelers who find safety & security in familiar hospitality experiences from a well-known, trusted brand
  • JW Marriott is for premium guests who associate travel with wellbeing and seek elevated amenities & experiences that inspire

Everything about these sub-brands – from the 2D and 3D visual identities to the nightly rates, staff uniforms, check-in experience, onsite amenities and F&B programming – flows from this carefully orchestrated architecture.

Having been around for almost 150 years, Barilla has learned a thing or two about architecture. While most of its U.S. volume is classic blue box, in recent years the brand has proliferated to reach different consumers with nuanced needs at varying price points.

  • Gluten-Free, Whole-Grain and Protein+ are for pasta lovers with dietary and/or macronutrient goals
  • Al Bronzo is for home chefs who want a premium taste experience without the fuss of homemade pasta
  • Chickpea & Red Lentil is for carb avoiders who prioritize nutrient density but don’t want to sacrifice their pasta ritual
  • Ready Pasta is for consumers short on space, time & cooking utensils who still want a home-cooked meal

Notably, Barilla uses product naming, color, packaging shape and messaging hierarchy to quickly and effectively resonate with each of these consumers and use cases.

The good news is, it’s never too late to create (or optimize) the system or structure underlying your brand. You don’t need a degree in architecture – just a strong brand identity, a deep understanding of how consumers engage with your category and a network of partners to bring it to life.

Interested in learning more? Contact us at info@seuratgroup.com.

Challenger Brands: A Look Back, to Look Forward

Challenger Brands: A Look Back, to Look Forward

Challenger Brands: A Look Back, to Look Forward

Over the years, Seurat Group’s Challenger Brand studies identified many practices of winning Challenger Brands. However, one characteristic rises above the others among successful Challenger Brands, which is a relentless drive to delight the consumer. This is the secret sauce a challenger utilizes to develop and provide a unique and compelling value proposition to consumers. Today, we step back to highlight two brands from previous Challenger Brand studies that distinguished themselves by delighting consumers in ways overlooked by traditional brands. We see this process play out time and again as Challenger Brands are founded and flourish in categories where incumbents become disconnected from the needs of their consumers.
NUUN

How did it all begin?

When Nuun was founded in 2004 consumer attention in the beverage category was increasingly turning to the prevalence of sugar in products. Athletes in particular craved solutions that hydrated them without excess sugar and additives, but were primarily faced with choosing between traditional branded options that combined hydration benefits with high calories. By identifying this consumer tension, Nuun created a new hydration solution separating “electrolyte replacement from carbohydrates.” While they were immediately accepted by hardcore athletes, Nuun was quick to realize this healthy hydrating beverage was something that a broader universe of consumers desired. We highlighted the steps they took in our 2016 Challenger Brand study as they used everyday ambassadors to drive growth by demonstrating that healthy hydration was available to everyone – not just athletes.

What unmet consumer needs has the brand continued to solve?

Targeting recovery & rest: Nuun has continued to solve health-conscious consumers’ needs within the hydration space. In February of 2019, Nuun launched Nuun Rest. Vishal Patel, Nuun’s senior head of R&D, framed the move as a new approach to recovery products saying that a lot are “protein based.” Nuun “wanted to take a different route and include some minerals that take you in a direction of more restful relaxation.” The brand was able to stand out as they zeroed in on specific product benefits their consumers were drawn to. Nuun continued this theme of distinct and purposeful product delivery in 2021 when they sought to expand into providing its users with clean, lasting energy with Nuun Energy. Unlike many incumbent products that were loaded with long ingredient lists and excess sugar, the brand looked to offer consumers an alternative that was non-GMO verified, vegan, gluten-free and kosher. These product expansions further differentiated the brand for their consumers.

Where are they now?

Nuun recently entered into an agreement to be acquired by Nestlé later this year. The brand is a major player in the healthy hydration space and is poised for additional growth due to their continued commitment to delight the modern consumer, consistent with their “challenger roots.”

LILY’S

How did it all begin?

For generations of consumers, chocolate has been a delicious indulgence. It’s something consumers love, but many struggle with the guilt that comes after partaking in a treat. The founders of Lily’s Sweets understood this basic tension well, and the brand was created on the premise that consumers should be able to enjoy delicious chocolate without a serving of guilt. Lily’s accomplished this and stood out from other brands in the category by giving consumers a delicious sweet treat without the sugar. In our 2019 Challenger Brand study, we highlighted Lily’s for their ability to carve out a unique competitive edge. They provide an indulgent and guilt-free chocolate experience all while operating within guidelines of fair-trade certifications and by using plant-based sugar substitutes.

What unmet consumer needs has the brand continued to solve?

Lily’s expands the sugar reduction movement: Founder Cynthia Tice has a clear brand strategy in mind that Lily’s is, “a leader in the sugar reduction movement, here to help limit your overall sugar intake while working to give you sweets you’ll obsess over.” COVID provided opportunities for the brand to delight consumers in new ways. As the pandemic caused the country to shut down, consumers were grazing and treating themselves at a higher rate. In fact, 46% of adults said they snacked more during the pandemic and the top driver of this was a desire for comfort. Lily’s capitalized on this trend and launched products to meet this elevated consumer need. In January of 2020, the brand launched milk chocolate caramel popcorn for those family movie nights amidst the lockdown. In June, they continued to innovate and target consumers who were increasingly baking at home, launching white chocolate and chocolate-caramel baking chips.

Where are they now?

Lily’s attention to consumer needs within the broader snacking category allowed them to branch into new occasions and reach new heights of success. The brand recently entered into an agreement to be acquired by The Hershey Company. The acquisition was an acknowledgement of Lily’s ability to delight the consumer, with Lily’s CEO Jane Miller noting that by “joining Hershey’s family of brands, Lily’s will become a platform confection brand making BFY options easily accessible to all consumers.”

By remaining relentlessly connected to the emerging needs of consumers in their categories, both Nuun and Lily’s highlight how Challenger Brands succeed and flourish when focused on that secret sauce. Do other brands come to mind that have done the same? We welcome conversation at info@seuratgroup.com.
What is Your Category Leadership Plan?

What is Your Category Leadership Plan?

What is Your Category Leadership Plan?

What has changed?

Retailers are seeking forward-looking, omni-channel insight and leadership from manufacturers to ensure they are anticipating trends and continually building category value. This means that the concept of category leadership has become democratized. No longer do you need to be ‘assigned’ category captaincy to be a valued go-to partner and ally. Being a valued partner does not rely on the size and scale of a manufacturer’s business alone.

Instead, brands of all sizes can influence omnichannel execution by leveraging a unique point of difference to drive value with consumers and unlock a win-win-win proposition (brand + retailer + shoppers). Even brands with 5% share can disrupt and earn the right to execute by leaning into their strengths and clearly articulating their joint value creation vision.

In this new democratized landscape, a new approach is required to ensure that category leadership is an integrated discipline within your total demand planning. Success depends on the manufacturer’s ability to bridge the disconnects between the current landscape and where the shopper is heading with a clearly articulated vision.

What is the new approach?
Winning commercial strategy links brand strategy to customer activation through the common language of consumer needs, starting with a proprietary view of the consumers’ definition of the ‘category’. Larger incumbents tend to define it defensively, while disruptive brands tend to view their markets through a forward-looking consumer-first lens. Having a clear, consumer-driven, and forward-looking category vision sets the organization on a course for advantage

Brands that execute category leadership successfully are not just transactional sellers attempting to negotiate terms that benefit themselves. Rather, they are allies who bring perspective on how brands and retailers can both invest and act to mutually move toward a better future state.

From Transactional to Ally
Where to Begin: 5 Value Levers

We have outlined 5 potential value levers that winning brands employ to build effective category leadership narratives with meaningful outcomes.

1. Unlock New Ways to Engage the Consumer

Brands emerge as allies when they authentically articulate who they win with, why they win, and how this translates to shared value with their retail partners. This could mean appealing to the next generation of consumers, to an under-developed or high value consumer demographic, or to owning a unique way to build consumer engagement and relationships.

The Honest Company appealed to digitally native, Next Generation moms who valued ingredients, style, convenience, and a connection to the brand’s values. Honest created intimacy with this valuable, growing segment of moms and built a portfolio that appealed to moms through their life-stages. They effectively communicated the value of their right to win with millennial moms to retailers, creating a proposition of joint value creation.

Result: CVS and Target gave Honest 8-foot shelf blocks, believing Honest could help them convert these important consumers in new, different ways, even as the brand also scaled on Amazon.

2. Reinvent Category Dimensions

Winning brands continually rethink the value dimensions of their category. Consumer-led innovation can create stronger connectivity with the end-users’ lives and create value for customers.

Even if your category is not as chic as Next-Gen baby care, it does not need to be boring!

Decades ago, the trash bag category focused on purely functional benefits (i.e., doesn’t break!). Glad identified significant consumer pain points, such as smell and sustainability, and expanded its line to include experiential products (scented) and sustainable products (biodegradable). This revolutionized the consumer’s view of the category and unlocked trade-up opportunities.

Result: Consumers latched onto the benefits; today, premium trash bags make up more than 70% of Glad sales. Glad maximized revenue capture and drove high-margin value for the retailers, who rewarded Glad with outsized shelf share.

3. Connect O20 (offline to online)

As more shopping migrates online, new insights around omni-shopper behaviors become increasingly vital to planning. Many shopper priorities (and difficulties) remain constant from offline to online in an omnichannel world: reaching prospective shoppers, driving conversion, and building baskets.

While winning conversion in-store has been a key imperative for years, Unilever identified cart abandonment as a key pain point for retailers and manufacturers in the Personal Care space online and devised a plan to address that unmet need.

Result: Leveraging ecommerce data, Unilever brought targeted strategies to help retailer partners smartly invest in digital media, drive larger baskets, and optimize the shopping experience for consumers.

4. Spark Shopping Excitement

Retailers look to brands to help drive traffic and engagement both online and offline. Brands that leverage their unique point of difference to create memorable, buzzworthy experiences can win outsized influence and achieve their executional priorities.

Sumo Citrus, a branded seasonal citrus varietal, has a limited window to drive volume and revenue capture for retailers.

Leveraging this scarcity mindset, they have invested behind the programs, displays, in-store support and training to create in-store theatre with dramatic, towering displays. Stores that meet certain executional criteria are eligible for their premium product for a longer season and Sumo delivers the buzzworthy displays.

Result: This alliance creates value for the consumer through a fun, shareable shopping experience; for Sumo, with a significant footprint and social media buzz; and for the retailer, through foot traffic and trade-up to a high-margin citrus product.

5. Champion Education

When a category has a high education threshold, retailers look to brands to help partner in communicating the category role and engaging the shopper.

Leverage credibility as a trusted expert and source of information to add value to consumers’ lives beyond high quality products. This can also bring value to the retailer beyond traditional demand generation to create further influence.

The Clorox Company leveraged their storied history of scientific expertise and leadership in the disinfection space to empower retailer partners to educate consumers around personal safety and hygiene during—and emerging out of—the global pandemic.

Result: Clorox was able to authentically aid their retailer partners with a growth vision that elevated value by providing information and education that inspired consumer confidence in their changing cleaning habits and choices. This unlocked value through retailer acceptance of omni-channel shopper programs and increased Clorox’s ability to influence the future planning of cleaning and disinfection categories around the globe.

Conclusion
Brands that effectively communicate their role in creating category and shopper value based on a forward-looking vision are positioned to win with retailers and, importantly, the next generation of consumers. Category leadership is up for grabs, and not just for the big players, but winning requires mapping a category vision to the entire demand plan to enable choiceful and synchronized decision making.

We welcome a discussion about what your brand’s category leadership could look like!

To discuss any of these ideas further, please contact us at info@seuratgroup.com.

Winning Omnichannel in the Next Normal

Winning Omnichannel in the Next Normal

Winning Omnichannel in the Next Normal

Does your organization have a strategy to gain share in an omnichannel environment turned upside-down by COVID-19?

A significant shift occurred in the consumer packaged goods industry over the past few years as leading organizations adopted an omnichannel approach to consumer demand generation and selling. These companies moved away from a siloed, ‘push’ approach to mass marketing and acknowledged the realities of a complex consumer / shopper journey along with the need to make brand connections in a more relevant, meaningful way. Those that made the shift realized significant growth as the majority of industry growth shifted to sources outside the traditional brick and mortar world.

COVID-19 heightened the importance of taking an omnichannel view as consumer points of influence and purchase rapidly shift. It also revealed the need to re-visit what we mean by the term omnichannel, given three new realities:

1. Omnichannel is bigger than we thought
2. Consumer / shopper journeys are dynamic and rapidly changing
3. Last year’s playbook no longer applies

Omnichannel is bigger than we thought

Do you know where your core consumer personas are making brand decisions and shopping? That question is increasingly difficult to answer, as the majority of CPG spending now falls outside of ‘traditional’ sources tracked by syndicated data.

Both brands and retailers now compete against a broader set of options that threaten to supplant their offerings with more compelling value propositions. A broader framing also makes it increasingly difficult to influence consumers as they move along the purchase journey.

Example: Functional Water

Brands and retailers must recognize that consumers do not think in terms of ‘channels.’ The imperative is to conduct regular, far-reaching assessments of where and how consumer personas are fulfilling their needs—or risk losing market share to unseen or untracked competitors.

Consumer/shopper journeys are dynamic and rapidly changing

Consumers are changing more quickly than ever. Gone are the days when brand owners and retailers could comfortably develop annual plans followed by a period focused on execution. The disruption and changes ushered in by COVID provide an important lesson on the need to adapt quickly.

While COVID is clearly disruptive, brands and retailers need to be vigilant and agile at all times. For example, the Pet category experienced tremendous change when Chewy.com and Amazon provided a much more compelling total value equation for pet parents that caught many brands and retailers flat-footed.

Brand owners and retailers need to efficiently focus resources on consumers that represent a disproportionate share of business. But rapidly changing consumer behaviors reinforce the need to also deploy forward-looking insights to identify future sources of growth or disruption, and proactively nurture these spaces before competition arises. This requires brands to develop rapid “test and learn” capabilities to create conviction and action new learning. Otherwise, business owners find themselves chasing new sources of demand and struggling to close a widening gap.

Last year’s playbook no longer applies

In this fluid landscape, it is increasingly challenging for brands and retailers to stay visible and trigger connections at the right time. In the Next Normal, brands can no longer be passive influencers of the experience at the shelf or rely on basic ecommerce search.

Example: Impulse triggers have shifted

The need to connect with consumers at the right time, in the right way, with the right message is even more important given that only 8% of today’s consumers consider themselves brand loyalists, and are highly willing to switch brands or retailers when they see a better offer.

It is critical to understand the relationship between your brand offer and your consumer’s lifestyle. Leading brand owners and retailers are using forward-looking journey insights to map where and how to best sway consumers through brand messages and value added experiences.

How to drive change

Brand owners and retailers need to take action now to ensure they are equipped to win in the Next Normal and beyond. As we’ve seen, the only constant is change: the CPG industry has changed as much over the past three months as in the prior ten years. Four key steps are recommended to configure for an omnichannel Next Normal. Each step is illustrated based on a case example from a leading personal care company that successfully unlocked new pathways to omnichannel growth.

Seurat Group is an insights-driven consumer packaged goods consulting and private equity firm whose mission is to delight consumers. We create for our clients the clarity to act & invest in a better future.

Reach out at info@seuratgroup.com for additional thoughts on building a consumer/shopper insight foundation and omnichannel growth strategy for the Next Normal and beyond.

Moving from Respond to Reimagine: Leading Customer Engagement in the Next Normal

Moving from Respond to Reimagine: Leading Customer Engagement in the Next Normal

Moving from Respond to Reimagine: Leading Customer Engagement in the Next Normal

Radical Change in Retail

 

 

The pace of change among incumbent retailers in the consumer goods industry has historically been painfully slow. Despite many aisle reinvention projects, ‘stores of the future,’ in-store theatre, and shopper marketing programs, executional change has been measured in small increments: one additional facing, one incremental display, one shelf added to a category, or one more household adopting click and collect.

COVID-19 has clearly changed this dynamic. Retailers had to quickly respond to shopper behavior disruption and manufacturer supply realities with significant changes in-store, online and in fulfillment. Whole departments, such as Deli, were upended to address health and safety concerns with prepared foods, while store layouts were shifted to manage shopper flow and distancing requirements. Space and inventory holding power were quickly re-wired to meet radical shifts in demand overall and for specific products (e.g., paper and cleaning products), as well as ramp up for different fulfilment models such as click and collect.

Many manufacturers and retailers benefitted from these rapid changes, particularly shifts in consumption back to the home, consolidation of shopping trips, and re-prioritization of consumer needs that spiked demand for safe, convenient, and high-value brands and products.

We are quickly moving past the respond phase and do not believe the recent past provides a complete picture of the future.

The COVID-19 accelerant is now ushering in an unprecedented reimagine phase across the retail landscape, bringing changes within the next six to twelve months that historically would take five to ten years to develop. This presents both massive opportunity and risk for manufacturers. Shifts in consumption and shopping behaviors will drive continued change at retail and elevate the importance of influencing shopping behavior across an evolving, complex purchase journey.

More than ever, manufacturers need to be proactive to create customer planning engagement or risk having outcomes determined for them. Winners will influence customer planning conversations by using new insights to reimagine the category vision, growth drivers and brand roles. Our ongoing dialogue with consumers, shoppers, and retailers reveals four key areas of focus to reimagine the growth vision for each category:

 

Implication: In the face of renewed foodservice consumption, trading partners must identify ways to bolster the retail/at-home offer. Each category and brand must continually evolve their offer and value equation to maintain share-of-stomach gains from the respond stage.

For example, Deli is critical to meet demand for fresh, convenient, and great-tasting foods, but must shift from open, self-serve bars to a safer packaged assortment to compete with away-from-home options.

 

Implication: Re-orient category growth drivers and brand roles to address evolving consumer and shopper needs. Manufacturers need deep insight into why consumers are changing behaviors to identify what will ‘stick’ during the reimagine phase and how to deliver value to different tiers within a category.

Brands that played premium roles will need to demonstrate how they address a broader demand landscape and meet the needs of consumers making changes due to financial impacts of COVID shutdowns.

 

Implication: As shoppers make more planned trips, brands must be top-of-mind, prioritizing physical availability and visibility both in-store and online. Manufacturers need to build omni-channel shelving guidelines and partner with retailers to influence category strategy at shelf (share of space, brand blocks, shelf position) and online to both influence and deliver on demand. This requires factoring in holding power and optimal mix to meet the needs of a range of fulfillment options and incorporating strategies to influence shoppers at the point of purchase.

For example, as online sales in the Vitamins, Minerals, and Supplements category grew 15% vs. last year, manufacturers like Olly are helping retailers like Target use their .com business to compete for sales against a proliferation of direct-to-consumer players. In parallel, manufacturers are leveraging their growth online to ensure right availability, holding power, and brand blocks in-store to support other fulfillment models.

 

Implication: Provide a seamless omnichannel shopping experience for those who are interacting with retailers and brands across more touchpoints. Retailers need to provide operating models that delight and deliver on shopper demands before expanding service offerings. Manufacturers need to apply new insight through the various paths to purchase and identify implications for driving demand at the point of purchase to plan with retailers.

Follow the lead of manufacturers who are already providing visibility to total omni behavior to develop optimal online programs and physical retail recommendations that reflect online needs and in-store fulfillment.

Reimagining the Next Normal of Customer Planning

Winning manufacturers have a vision for creating category value grounded in a new insight foundation, using a forward-looking lens to understand where shopper behavior and decision criteria are headed.

Value comes from translating this insight into a category vision program that reimagines solutions for the four aspects outlined above and is communicated through a persuasive selling narrative that can be adapted to key customers and channels.

Seurat recommends the framework below to create the vision, narrative, and program to increase customer engagement during this pivotal window of shopper and retailer change.

 

 

 

Reach out to the Seurat Group at info@seuratgroup.com for additional thoughts on building an insight foundation and category vision to capture long-term growth through the reimagine phase and beyond.