Time is the equivalent of money, productivity, quality, and innovation. Being early to innovate—or imitate—has always been a critical success factor. Now it is more than ever before. A series of seemingly strong competitive barriers have fallen away under the onslaught from private labels. Customers are less loyal, and they demand active interaction with their brands. Real-time data permit new business models and leave room for new competitors. Speed—in this environment—is a key to survival and success.
Speed Matters—Now More Than Ever
In the 1980s, brand players competed on technical superiority. When attacked by imitators in the 1990s, they successfully countered with creative marketing and extensive advertising. When retailers topped their marketing budgets in the first decade of this century, fast-moving consumer-goods (FMCG) companies moved to point-of-sale tactics. But retailers cut back on branded SKUs, restricted shelf activity, and policed merchandising.
Now it is time to focus on areas in which private labels simply cannot keep up. With their main focus on imitation, they will always be a development cycle behind. The only reliable way to stay ahead is through continuous and frequent improvements to product attributes.
The digital and mobile customer base reacts faster and is becoming more demanding. Today’s consumers purchase seamlessly through multiple channels and actively participate on blogs and social media, creating enormous opportunities as well as a major threat: customers expect their brands to be responsive—and are fast to move on if disappointed. Only sufficiently agile companies can manage to satisfy customers’ needs.
Unprecedented amounts of real-time data are created through the digitalization of the customer relationship. These data hold the key to understanding customers’ needs and expectations. Retailers are becoming more comfortable with this information, and digital vendors such as Amazon.com and eBay excel in reacting fast to ever-changing customer expectations. If FMCG players want to maintain their strong position in the value chain, they need to utilize these data to boost their agility.
Since George Stalk Jr., a senior advisor of The Boston Consulting Group, invented the concept of time-based competition, BCG has worked on hundreds of related client assignments. The number of assignments had remained fairly constant over the years, but it more than doubled from 2010 through 2011. As other levers lose their power, speed in innovation and imitation becomes perhaps the leading general source of competitive advantage. To fully realize its benefits, companies have to take speed to a new level.
To support this transformation, BCG has distilled several best practices from its work with more than 30 speed champions. The result is our speed-to-market playbook.