Consumer-Led Growth Strategy
Whether you’re a retailer, brand or other player in the value chain of a consumer good or service, your success ultimately hinges on whether the consumer buys what you’re selling. As a result, L.E.K. Consulting’s approach to growth strategy always starts with the consumer… what we call a “consumer-led” growth strategy.
Our approach puts the consumer at the heart of building the necessary fact base to inform sound growth strategy. Developing a deep understanding of the consumers in your addressable market forms the foundation of the fact base, and must play a central role in making choices about the right strategies for driving growth and value. Key components of this include:
- Who are (and aren’t) your target consumers? What are the attitudes that define them?
- How much spend do they represent?
- How do they behave? Make decisions?
- What are their purchase patterns? Triggers?
- How are you positioned with these consumers today?
- How are your competitors positioned?
- Where are you advantaged and disadvantaged on a relative basis?
From here, we supplement this consumer insight with an objective view of internal (areas that are largely within a company’s control) and external (areas that are more or less “given” by the marketplace) factors that define the realities of the marketplace in which our clients participate and their relative positions in that marketplace. Combined, this fact base provides the ingredients for defining viable strategic options to consider and prioritize. While every client circumstance is different and requires a tailored approach to address situation-specific issues, our consumer-led approach serves as the backbone for building value-creating growth strategies for our clients.
National footwear specialty retailer: We conducted a top-to-bottom assessment of the business, developing a holistic consumer-led growth strategy spanning consumer segment prioritization, value proposition repositioning and marketing, merchandise assortment enhancement, store concept refinement, and a real estate/location strategy. Comps turned from negative to positive in all quarters post-strategy.
Regional big box electronics retailer: Faced with declining store comps, we were engaged to revisit the retailer’s value proposition and develop a long-term growth strategy. We segmented the customer base and studied their behaviors, brand perceptions and unmet needs. Based on these insights, we identified the optimal brand repositioning strategy. The project resulted in comp store growth, material earnings expansion and 20% growth in revenues over the next year.
Iconic mattress brand: Losing share to a key competitor and struggling to stay relevant among retailers, an iconic mattress brand came to us for help. Our in-depth conjoint analysis and consumer research provided a unique perspective of customer needs and helped the client create disruptive product innovation and a “consumer pull” brand strategy. The new product was called an industry game-changer, the client experienced significant sales growth, outpacing the market, and the competitor’s share price lost 50% of its market cap.