Unlocking a much, much larger opportunity
A category expansion story
A major global consumer brand was looking to grow via an expansion into an adjacent category (as major global brands that have saturated their primary category are want to do).
They had a small category-extension product that was languishing in obscurity in one corner of the globe. It was selling modestly, but had only very little attention paid to it by the local team (and absolutely none from the global brand & innovation leadership).
The new category, though, was juicy!
First, as a part of the broader health & wellness trend in CPG (one that the brand wasn’t yet playing in), the adjacent category had steady growth that far out-paced the brand’s legacy category.
The business case also showed serious promise with quite high consumer price-points and some meaty margins to boot.
To top it all off, consumer expectations in the category nicely fit with the key strengths of the brand, so the equity would be an asset.
The team — to say the least — was salivating.
But! The product wasn’t growing in the market it was in… and the team had no clue whether it could actually compete in this new-to-the-brand category, especially in the hotly contested US.
Perhaps there was a way 🤷♂️… So, we helped them find it.
Our Challenge?
Unlock the best approach for entry into a hot, but hotly contested adjacent product category
Our approach
Stage 1: Pre-launch Experiments
While the innovation managers got to work localizing the existing product for a rapid test-launch in the US...
We got to work experimenting.
Validating the brand's opportunity, while iteratively testing key aspects of the product, value proposition, pricing, messaging and audiences.
Stage 2: DTC Seed-launch
Then, over the course of 3 months, we operated a stand-alone DTC store for the new category-extending product.
And we kept on experimenting, but this time with real conversion & repeat-purchase data.
Generating key learnings across the product, product portfolio, visual design, and (pivotally) target audience.
The DTC operation was left in market for a further 12 months, because the learnings were so fruitful.
Key outcome
We identified a new, much larger opportunity than the team knew was possible
Prior to our work, the broad assumption by the team was that while this category-extension play was a great growth opportunity for the brand, it was always going to be contained within the traditional niche of the new category… Our learnings disagreed.
We were able to triangulate observations across a wide set of real-world data sources…
Audience persona experimentation in our paid media
Value prop message experimentation via ads & the DTC site
Post-purchase qualitative surveys
Post-consumption (2 weeks later) follow-up qualitative surveys
Specific analysis of repeat purchaser survey responses.
Allowing us to identify & validate a mass-scale consumer persona and job-to-be-done that had not been considered by the team nor discovered via the traditional research that was performed prior to our involvement.
The consumer and job also just happened to play incredibly well to the brand’s natural strengths.
Our true, real-world, behavioural data ultimately provided the team with the sell-in story needed to call up major national US retailers instead of the niche retail partners they had previously planned for.
Opening up a much, much, much larger business case for their growth investment.
The product is now in market, nationally across the US.
Other notable outcomes
Uncovered key feedback that led to important product reformulation to drive increased satisfaction scores
Confirmed the conversion impact of a new packaging design (before it was even printed)
Determined the sales split forecast between sub-portfolio products for future forecasting