Every sector in its earliest days looks different than when it has matured years later. Sometimes change can take several decades to truly set in; it may take place over several years; most recently, we observed substantial change in just 18 months as the pandemic accelerated certain trends—like the shift to e-commerce—and pushed rapid adoption into a short amount of time.
Business models evolve, competitive landscapes shift as companies come and go—some subsumed by their peers, others gaining market share through acquisitions and growth, while some startups fail to reach that maturity stage, especially in nascent industries. Yet while the pace of change varies, transformation is constant.
How do you survive in a crowded marketplace, especially when so many direct and indirect competitors want to eat (literally, for meal kits) your lunch? Looking back on 10 years leading HelloFresh, the largest global meal kit company, these key learnings stand out to me as the most important takeaways for enduring an industry shakeout and achieving staying power—and they can be applied across sectors:
Invest in long-term growth aligned with your vision to stay competitive
Providing a product or service you are proud of and that keeps your customers coming back is critical, but don’t get so mired in the day-to-day that you neglect your company’s long-term vision. The successful leader keeps one eye on the present and another keen eye on points three, five and even 10 years down the road. Consider every decision through the lens of “does this align with the vision for the company?”
Take the meal kit sector—a category once flush with dozens of competitors has consolidated, and only a few key players remain. My company, HelloFresh, began its journey 10 years ago with a mission to change the way people eat forever. From day one, our mission has been inextricably linked with developing a data-driven technology platform across our entire value chain. We have been a leader in this space because we excel where others have failed: investing in long-term growth via technology, product, and infrastructure to better serve new and existing customers and expand our total addressable market.
Today’s meal kit players must compete with a market crowded in a different way as more companies solve the “what’s for dinner?” equation—third-party delivery partners, Amazon, and grocery chains flexing their newly minted e-commerce platforms. Our early investments in technology, with a steady eye on future growth, have enabled HelloFresh to remain competitive a decade forward.
A steadfast commitment to investing in growth and building a business for the future are key to achieving staying power in a crowded market, especially when competitive landscapes (inevitably) change.
Know your customers
Customer feedback is essential in today’s marketplace—it’s how you ensure your product or service solves a customer need and stay on the pulse of what customers are looking for, so a competitor doesn’t beat you to the punch. Any business that fails to understand its customer is playing from behind. Fortunately, there is no shortage of tools designed to gather and leverage customer feedback to drive decision-making.
Digital-first businesses have a leg up in this realm. At HelloFresh, we are constantly updating our 3 million customer data points—analyzing customer feedback to inform recipe development, understand which tastes work for different markets, and tailor customer profiles with new options based on order history and preferences.
Organizations are increasingly looking for strategic direction grounded in customer insights and data. A recent survey found 87% of customer experience professionals say customer feedback has become more important since the onset of COVID-19. This is the right approach—especially for companies seeking to differentiate themselves in a crowded market.
Know what your customers care about. Conduct regular surveys, understand their views on matters relevant to your business, and match those insights to wider trends to create new products.
Grow your total addressable market
Focus on improving the total market penetration of your business and consider how to reach new, untapped customer segments—with an existing core product, or by serving up a new one. Maintaining a diverse array of products and/or brands enables the business to grow its total addressable market by serving a broader range of consumer preferences, needs and wants.
At HelloFresh, we drive growth through a three-pronged approach: entering new markets, leveraging a multi-brand strategy, and expanding offerings through mergers and acquisitions. We launched this year in Sweden, Denmark, and Italy, and have found new customers by offering multiple brands to appeal to a variety of needs (EveryPlate, a lower price point, and Green Chef, an organic, diet-friendly option). And our acquisitions of ready-to-eat experts Factor in the U.S. and Youfoodz in Australia help expand our offerings as we observed increased customer demand for these options.
Start small. Expansion may be a new local market (vs. a new country) or a new product. Chart the growth path that makes sense for your business, identify the right levers to pull, and scale to new and existing markets and customer segments.
The bottom line
To achieve staying power, every decision should ladder back to your company’s vision. Focus on investing in long-term growth, building a dynamic relationship with the customer (with rich customer feedback), and growing your total addressable market.
Too many young companies feel pressure to launch and aggressively promote the business as soon as possible. Instead, put more energy towards getting your business lines to work correctly, fulfillment to operate smoothly, and shoring up the supply chain—then bring it to market. Leverage the learnings and best practices you’ve gathered from past launches. Take the playbook that led to your initial success and apply it elsewhere—and continue to refine and rewrite that playbook as you go. This is the recipe for success in any industry today.
Read More: Achieving staying power in a crowded market