Pivot to Success
Things became more digital in 2020. Digital has changed the future of brands’ survival and success in 2020 and beyond.
According to Kate Smaje, senior partner, McKinsey and Company, “The [COVID-19] crisis has forced every company into a massive experiment in how to be more nimble, flexible and fast.”
The experimentation is coming none too soon
Before the crisis, 92% of company leaders said their business models wouldn’t remain viable at the current rate of digital change. Since the crisis, businesses made decisions that would’ve taken months to a year to work through into a strategy.
Smaje’s comments suggest that at least some of that 92% have made changes they hadn’t anticipated. “Business leaders are saying that they’ve accomplished in 10 days what used to take them 10 months,” said Smaje, “and that kind of speed is what’s unleashing a wave of innovation, unlike anything we’ve ever seen.”
That innovation isn’t limited to specific industries, either. Businesses of all sorts have employed some radical thinking.
Life is Good After Change
We were listening to Guy Raz, co-creator of NPR programs like the TED Radio Hour and How I Built This, talk about his new book on KERAThink Radio. That’s when we heard the news of how the apparel brand Life is Good pivoted to weather the current economy. Its story is one of what is no doubt dozens of stories of companies making similar moves.
Life is Good boasts more than $100M in annual sales, mostly through its retail outlets. The COVID-19 economic disruption drove retail sales down by 80%.
The company’s leadership, who are responsible for the livelihoods of nearly 200 employees, had to make a decision. They had to decide quickly in order to continue operations.
Life is Good could have hoarded cash and furloughed team members, but those people had been with them for years. That option would fly in the face of their branding, which is driven by a feel-good ideal. So, leadership decided to double down on technology to keep the business going.
The firm used its cash to invest in technology and equipment that allowed them to print things like t-shirts, caps, coffee mugs, and posters on-demand. How would that help?
Typically, it takes 15-18 months for a design to go from production to sale in a retail storefront. Life is Good could not afford to follow that typical timeline, nor could it bet on retail reopening sooner than later. The investment in technology, on the other hand, would allow the company and its customers to create designs on-demand and ship almost immediately. Not only could they skirt the usual process, but they also could avoid expenses associated with maintaining inventory.
Did the Strategy Work?
The strategy worked. Life is Good’s direct-to-consumer sales have increased by 300% even as the pandemic has raged on.
Have those sales made up for what was lost in retail sales? Not entirely, but success is relative. It’s not always about profits. Sometimes it’s about keeping your head – and those of your employees – above water and surviving to fight again another day.
The company’s pivot to digital production and direct-to-consumer sales has allowed it to do more than just tread water. It was impactful enough that it expects to be okay when the virus clears, and it has a new revenue channel to boot.
How has your organization pivoted to ensure survival – or find success – this year? Have the pandemic and its economic effects led you to accelerate a facet of your business?
If so, we’d enjoy hearing about what changes you implemented and what steps you continue to take to keep your brands’ survival and success in 2020 viable going into 2021.