Case Studies

A Retailer Turns the Channel...

Extending a retail brand into new markets and categories

SITUATION

Fortune 500 international retail giant was facing severe economic pressure, new and increased sources of competition, and a rapid trend toward commoditization. Its goal was to propel both its business and its brand forward by identifying new platforms for growth. Specifically, it sought to identify combinations of product/service categories that: 1) share a common underlying thread and customer-based benefit, 2) were entirely new-to-the-store categories, and 3) could each result in $100M+ in sales per year at retail. Importantly, success hinged on solving two variables simultaneously: 1) which new equities the brand should embrace to enhance the shopping experience and increase its relevance with consumers, and 2) how to capture and propel the business-building ideas that resulted from these new brand equities.

ACTION

A comprehensive audit of the company’s existing innovation pipeline and a review of its successes and failures in recent new category introductions was the starting point for the engagement, which was led by a current FullSurge partner in a previous role. This was supplemented with new consumer research to determine the elasticity of the retail brand with an eye toward identifying logical new equities and associations the brand should strive to own. Collectively, the work streams resulted in the creation of a brand extendibility “playing field,” which was a concise articulation of the ways in which the brand: 1) could easily extend in the near-term, 2) could potentially extend in the long-run in conjunction with positioning refinements, and 3) could not and/or should not ever extend. New product and service concepts were developed and tested to determine which growth platforms represented the best opportunities to bolster business and financial performance while simultaneously reinforcing desirable brand equities for the retailer’s master brand.

RESULT

The first growth platform to launch in market was comprised of categories that shared a common theme around technology, education, and entertainment. Tech toys, electronic gadgets, and hobbies were examples of new categories contained within this platform. Impressively, the retailer launched new products in the market within six months of project completion and the platform far exceeded expectations by generating $500M in Year 1 retail sales. Additional growth platforms that have yet to be launched were also included as part of a five-year innovation roadmap for growth.

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