Catalytic Thinking / Marketing Strategy

Be a Challenger – or be roadkill

This is the first guest post from Hilton Barbour – independent Marketing Provocateur – lending his insight into Challenger Brand thinking and how this applies to changing paradigms in retail.

Drive long enough and you’ll have that heart-wrenching moment when an errant squirrel suddenly and unexpectedly darts out into the middle of the road.

And stops.

Unless you’ve the reflexes of a fighter pilot, the next part of the story unfolds in sad, graphic detail.

Slowly. Agonizingly. Inevitably.

Roads, we’re told from childhood, aren’t safe places to play. Markets, we learn as adults, aren’t safe places to play either.

And the worse place to be – be it a road or a market – is slap-bang in-the-middle.

Historically, business’ could delude themselves into straddling the middle of their market. Offering just enough breadth of inventory or points of distribution that they could avoid the commitment required to become a big-box retailer (say like WalMart, Tesco, Loblaws) or a highly-specialized niche offering.

No more.

HMV is the most recent fatality

The UK press is awash in news of HMV’s receivership after 92 years in business. Music lovers are tearful at the loss of another music icon. Town planners are lamenting the end of England’s fabled “High Street”. A lively debate has been going on at this blog about all the reasons why.

Of course the Internet and the music-downloading phenomenon are cited as key reasons. Just like Blockbuster’s bankruptcy was put down to the superior online streaming services offered by NetFlix.

That’s a fair analysis. The Internet has created a powerful alternative to the business model in which HMV and Blockbuster operated under.  It was just easier (and often cheaper) to sample, browse and buy online than schlep into a store.

But that’s not the complete story.

Its not just the Internet

If it was, what about other casualties in the retail wars? In the UK brands like Jessops, Woolworths, Comet have gone to the wall. In Canada, Hudsons Bay Company and Sears have had a long bumpy road. The Internet isn’t solely responsible surely?

Perhaps the answer is infinitely simpler? By playing in the middle of the road, they were all destined to become roadkill.

Not large enough to compete with WalMart, Costco on scale and volume or to negotiate hard enough to drive low prices. Not niche enough to charge higher margins by virtue of superior service, deep expertise or product knowledge like a speciality boutique.  Like that errant squirrel, caught frozen in the middle…with receivership barrelling down upon them.

Challenger brands and Retail

For me personally, that’s why Challenger brand thinking is so powerful and so needed in today’s retail environment. It abhors middle-of-the-road positioning and forces brands – regardless of their size – to take a stance and make a commitment to that positioning. Retail Challenger brands – like Zara and The Body Shop – have sustained global growth because they’ve remained laser-focused on a differentiated story. Zara’s incredible “fast fashion” ethos brings bleeding-edge trendy clothes from concept to store in 10 days, The Body Shop has been unwavering in its ecological mandate years before the rest of the industry took notice. Like true Challenger’s they defined a succinct story and rallied the entire organization behind it.

For HMV the dye was cast when they moved from the location for die-hard music lovers to mass appeal. Decisions requiring employees to hide their tattoos stripped HMV of their most passionate music-loving staff. Catering to the masses meant inventory that could be bought cheaper on-line or at larger retailers. No win.

The lesson?

Straddling the fence is not a position

It’s actually the complete absence of a position. Straddling is not a strategy of playing it safe in a market rife with risk and uncertainty. It’s actually riskier and inherently dangerous. Sure, your demise may not be overnight but, like HMV’s 10 year slide into receivership, its inevitable.

Have any brands flourished by servicing the middle? Can Challenger brand thinking give retail brands a new lease of life?

What say you brand and retail experts?

<While we’re clinically passing judgment on HMV, take a moment to consider the 4,000 staff directly impacted by this. These decisions to “play it safe” do have a very real human consequence>

_MG_4630_Hilton_CROPPED_B+WHilton Barbour – aka Marketing Provocateur – is a freelance Strategist whose personal motto is to “Question everything” Working in Marketing allows him a quasi-legitimate avenue to pursue a life of intellectual ADD.

Find him on LinkedIn or provoking over on his blog.


6 thoughts on “Be a Challenger – or be roadkill

  1. Pingback: 3 things HMV’s staggering incompetence teaches the rest of us | interacter

  2. You are looking for an argument, so here it is.

    Every brand’s “position” is someone else’s “middle-of-the-road”.

    Bodyshop’s ecological evangelist is going to become middle of the road as more and more green brands outflank Bodyshop.

    Check back 90 or even 9 years later.

    What is bleeding edge today will necessarily become middle of the road.

    As long as you define brands rationally.

    Products have rationales. Brands have emotionales.

    “Loyalty to the originator” does not have to die.

    It’s possible for “HMV” to have adopted “Gangham Style” as their brand of music.

    • I agree – and also feel that brands need to continually evolve to maintain their challenger status, as Hilton explained.

      If they don’t, then they simply fail to decide what they are, and that inertia kills them.

      As more things become acceptable to more people, so the vibrant and brave brand needs to push further and further to maintain their brand status. RedBull couldn’t have thrown a dude out of a balloon at the edge of space without years of pushing other boundaries first…

  3. Sumit – on some, but not all, points I can agree.

    On Kodak – absolutely. I might also suggest hubris and ostrich-in-the-sand played a part – but then that’s crippled other brands like RIM, Nokia, Enron, Polaroid as well.

    On bean counters – agreed they like counting beans and other tangible things. But you are able to actually put a value on a brand as numerous folks do. Coca-Cola’s much loved brand is a 70x multiplier of all the organization’s physical assets as the respected folks at Interbrand have shown.

    On BodyShop – certainly the ecologically-minded brand position has become more popular, and credible, as the market has matured. But no-one can question Body Shop’s right to that territory because of the way it acts and conducts business since its inception. It hasn’t just woken up to bang the ecology drum – that’s been their position and their Challenger ethos since Day 1. Those who chose Body Shop over others, like Sephora, Lancome etc do, in small part, because of their position.

    My POV in the post – as it relates to HMV amongst others – is that they were unable to (very simplistically) decide if they wanted to compete on volume/price and compete with Asda, Tesco, Amazon etc or compete on deep expertise/service like a boutique. By trying to straddle the fence between both, they were caught in the middle…

  4. Agree with your overall argument that getting the right positioning is key always and that choosing clear water is vital, but HMV and others that have been subverted by the internet surely had a different problem, not of positioning, but of wilful deafness. I’d love to have been in HMV board meetings in, say, 2006/2007 when the directors were talking about positioning and strategy. One of them must have said “what’s that noise?” . Then the answer would have been “can’t hear anything”. At first, the noise of internet delivery and iTunes would have been imperceptible. But it got louder every month until that vehicle not only filled their rear view mirror, but must have made all conversation almost impossible. And still they ignored it. Feels like the innovator’s dilemma rather than a positioning challenge.
    Nice blog btw.

  5. @Stan – yes, Clayton Christensen would have a field day with the current run on the UK high street. I suggest positioning issue (than wilful negligence and being asleep at the switch) because they seemed loath to take a point of view on their business and their business model. Straddling the high touch “expert” positioning, which they had legitimacy in, while also trying to compete on price and the fickle “boy band of the moment” content made their position impossible to defend.

    Appreciate your comment.

    BTW, have been a fan of your agency for a while. You’ve recently hired an old colleague of mine Jessica. Keep up the great work.

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