Here, guest contributor Christophe Therrey, Director of EMEA Sales with Centric Software, explores three business strategies for success in 2019. Christophe teaches business strategy to MBA students and is a part-time pilot who co-founded a not-for-profit organization that uses flying as an educational tool for children with disabilities.
As 2018 rushes to a close and the new year fast approaches, predictions of industry changes with news of revolutionary technologies like 3D, blockchain and Artificial Intelligence start to make the rounds. News articles and blog posts abound with what can feel like an endless list of opportunities to leverage or new market challenges to tackle.
You might meet new year predictions with optimism, energized and excited to take on new strategies and carve out market share. Whether you are looking for a new way to connect with customers and take personalization to the next level, or want to create innovative products, or are searching for an efficient way to expand in new markets or new product lines, smart business strategy combined with foundational technology like Product Lifecycle Management (PLM) solutions will keep you in the game in 2019 and beyond.
The market challenges at play for brands are complex with the rise of giant online retailers, the exponential growth of brands over the last 25 years, the pressure to keep up with the competition to create more trend-right products faster at more affordable prices, and the proliferation of technology and e-commerce platforms making it easier for brands to set up just about anywhere in the world. The good news is that there are many examples of strategies that work from which you can take inspiration!
Here are three strategies with real-world application that your business should consider to stay ahead of the game in 2019. Read on to discover how innovative PLM solutions, combined with smart strategy, drive digital transformation that will propel your business forward.
Business Strategy 1: Customer Intimacy
Create a level of involvement with your customer that is unmatched by your competition. Make them feel special with customized products, smart recommendations and personalized assistance. Use demographic and customer preference data gathered through customer loyalty programs to put together powerful merchandise and line plans that offer what the market wants and create products that invoke unique perceived value for customers.
Two real-world tested methods of a successful customer intimacy strategy are offering personalization or customization of brand-favorite products, and incorporating customer feedback into designs to improve product functionality and durability.
For example, brands can offer personalized versions of core products like signature bags to boost demand and buzz. Customization gets customers involved in the creation of their own products by allowing them to personally select details such as trim color or handle type. Suddenly, generic products become intimately important to an individual customer, giving them the opportunity to express self-identity and uniqueness while maintaining loyalty to their preferred brands.
In another form of customer intimacy, brands learn from customer feedback and experiences with their products ‘in the field’. Brands renowned for high quality and longevity put products through rigorous testing for usability, quality, care/maintenance and more, but inevitably, some products sometimes get damaged after they are sold.
Make an offer to customers to bring products back to the store for a repair as part of your customer service plans. The advantage is gaining valuable insight into product materials and design that could be improved. Enter information about each individual damage incident and repair into a quality testing library for future reference and adjust testing protocols based on customer feedback.
How do innovative, digital tools like PLM support customer intimacy goals?
Use a PLM solution to manage each unique, customized product design and production to give customers a transparent view of how their specific product is made. Working with PLM makes it possible for customers to interact directly with the workshop where their personalized product is being produced. PLM even manages the product specific information for each customized product from design to manufacture so production teams and the customer have an immediate view of where their new item is in the production process.
Modern PLM solutions are a repository for real-time product information for internal teams throughout the lifecycle of the product, including quality assurance and testing, and customer feedback once the product is sold. Real-life customer feedback can be directly entered into the PLM system and connected to that specific product to flag any defects to improve the testing process, resulting in creating better products in the future.
Business Strategy 2: Product Leadership
Some companies adopt the strategy of bringing innovations to market on a continuous basis, leading the way with original products that challenge industry norms and establish competitive differentiation. Speed is essential here, as companies that want to succeed with this strategy need to bring new products to market first in order to capture market share, making time to market a key success factor.
Another factor to consider when implementing a product leadership strategy is succession planning; make sure innovation doesn’t walk out the door when one of your key team members moves on to another opportunity or is unexpectedly out of the office. The benefits to brands for achieving peak product leadership are increased revenue and accelerated time to market.
One example of how product leadership can be applied, is to think of a popular running shoe brand. Once runners find a favorite type of shoe, they tend to stick with it. Rather than competing on price or focusing on branding, running shoe brands can decide to reinvent the running shoe altogether with innovative materials or construction to increase comfort and performance, while building a base of loyal customers who won’t go back to any other shoe. To keep innovating effectively to bring customers new and better products, brands can also put a lot of time and effort into field testing new designs, fabric and materials.
How does PLM drive product innovation and leadership?
Continuing with the running shoe example, brands can use both elite and everyday runners to test shoes using PLM product field testing apps to instantly enter real-time wearer feedback into the PLM system. This eliminates time-consuming elements of the testing process as PLM gives brands the ability to quickly incorporate and test new fabrics, materials or designs, making the product more innovative and enabling brands to get products to market faster.
Another example of how PLM is a foundation for product leadership is to think of brands in the fast fashion space. The amount of work required to create new products to hit stores several times a month is immense. PLM supports this style of product leadership by equipping decision makers with tools to iterate multiple product versions and make fast decisions increasing new product output.
Inadequate succession planning is a significant obstacle to product leadership. PLM is key to building up a digital knowledge base that isn’t dependent on a handful of people to keep functioning. With all historic and current product information saved in one centralized PLM system, brands aren’t forced to rebuild product knowledge from a mess of spreadsheets and emails every time someone moves on and can continue innovating even after the most experienced employees have left the company.
Business Strategy 3: Operational Excellence
A third strategy to consider is operational excellence, which is a process-oriented strategy. Rather than trying to bring the most innovative products to market or a personalized customer experience, brands simply aim to be the best at what they do – offering an attractive selection of high quality products at the best possible price. This is a common strategy for traditional retailers who recognize the need to step up and adapt to a fast-changing world.
Take, for example, a typical ‘multi-category’ retailer with a mix of about 80% food and 20% non-food product offerings looking to compete with online retailers rapidly moving into the food business. Multi-category retailers are faced with the challenge of retaining and attracting new customers with a revitalized customer experience.
Retailers have adopted a multi-pronged approach to stay competitive; in addition to offering new food items, they are also expanding into new markets or are creating their own lines of apparel, furniture, home goods and electronics at a higher margin than the branded items they sell. Operational excellence when developing own-brand products means more control to balance quality and price combinations, leading to new and more customers visiting the store or e-commerce platforms.
How does PLM power an operational excellence strategy?
Brands can take advantage of PLM to centralize all product information in one robust platform for product development, which improves the efficiency and transparency for all teams working to bring well-priced, quality products to market faster.
PLM includes modules to manage costing, materials and suppliers to allow companies to rapidly simulate the cost impact of a new material and/or of a new supplier, ensuring product quality at affordable prices.
But this is just one example.
Brands also develop operational excellence in the way that they sell in different markets around the world. Expanding into new territories means adapting to significant differences from climate, to languages, to sizing. The same product offering has to be both global and highly localized. PLM empowers companies to manage collections in a global way with a local approach. PLM allows brands to develop a collection that is customized and sorted by different regional factors such as sizes, price points, channels and styles. This ensures that companies can successfully bring the same products to market in different regions without reinventing the wheel each time.
Ultimately, product is key. You can offer customers a wonderful in-store experience or a totally personalized product, but they won’t be happy if it comes apart at the seams two weeks later! The three business strategies that companies can pursue to compete in 2019 – customer intimacy, product leadership and operational excellence – must rest on a strong go to market foundation. The companies successfully carving out their own market share in spite of evolving market challenges know this and PLM is the secret-strategic-investment-weapon that enables them to focus on what really matters: making great products and getting them into the hands of people who want them. Here’s to a successful and prosperous 2019!