Find a need and fill it. That’s said to be a key component of business success. And, of course, it’s essential to do market research to understand the market and its need. But, will this be enough? And, why or why not?
Yes, finding, researching and filling a market need is a valuable ingredient for business success. But, it’s not always enough. Research that focuses on understanding an identified market need may not provide enough knowledge about what steps must be taken to best fill that need. And, it can be easy to move too fast, thinking the business is ready to serve the need, when in fact there is still so much the company doesn’t yet understand about how to do so effectively.
An example of this is Old Navy’s size inclusion strategy that the company introduced during the summer of 2021, but had to scale back more recently. Old Navy (a unit of Gap Inc.) launched this strategy after recognizing that there are many larger sized women who want nice clothes, but find that what they’d like is often not available in their size. Thus, Old Navy had identified a market need. And, apparently, Old Navy decided to serve that need based upon the research it had conducted.
Yet, in May of 2022, Old Navy is scaling back its effort to meet this market need. This is discussed in the May 27, 2022 Wall Street Journal article “Old Navy Revamps Women’s Clothing Strategy“ by Suzanne Kapner. The article says, “Old Navy is scaling back an attempt to make women’s clothes more inclusive for all body types, after demand for the larger sizes fell short and the chain didn’t have enough middle sizes. Gap Inc. Chief Executive Officer Sonia Syngal said Old Navy stores will no longer carry all the sizes” although its website still will.
When pursuing a market need that is far broader than what was previously served, a company can face operational challenges associated with the new way of doing business. Based on my 25+ years research into business success and failure patterns, companies are more likely to succeed if they approach the new way of doing business by taking more gradual, evolutionary steps. Yet, the Wall Street Journal article said, “When Old Navy launched the inclusive sizes in August, Ms. Syngal told analysts that the rollout was the ‘largest integrated launch in the brand’s history and an important growth driver for the business for years to come’.” As I see it, the largeness occurring here can easily signal that the change may not entail the gradual steps needed for success.
Furthermore, the September 12, 2021 article “Old Navy Size Inclusive Shopping Model Sets a New Standard” in the publication Philanthropy Women reported on Old Navy with the quote that follows: “We set out to understand what women of all sizes wanted from fashion and the shopping experience and were inspired to revolutionize every area of our business.” Again, my research finds that business success generally comes from evolution, not revolution, and this suggests that Old Navy could have been more successful with a more gradual rather than revolutionizing approach. This is the case even though they did some research to understand what the market wanted.
Additionally, according to the CNBC online article “Old Navy overhauls plus size fashion line for women to win sales in $32 billion market,” which was published around the time when Old Navy launched its new size inclusive strategy, “Old Navy and Athleta have consistently reported the strongest same store sales gains among Gap’s four brands.” As I see it, this suggests that making major changes to the Old Navy brand can entail considerable risk to one of the company’s top performers. And, as my research finds, high risk does not lead to high reward, but it is the right, prudent risks that bring corporate growth. This is the case despite the fact that we often hear of companies encouraging greater risk taking allegedly to get improved results. Doing a major overhaul on a top performer can easily mean the company is essentially weakening what had previously been a good revenue source.
So, even when a company does some research and identifies a market need, they still must approach that need in a more gradual way that fits with their business. On May 27, 2022, Glossy, a publication on news and trends in beauty and fashion, quoted Gap Inc. CEO Sonia Syngal saying “we launched too broadly and too quickly. We over planned larger sizes with customer demand under-pacing supply.” Apparently, Old Navy is not completely giving up on inclusive sizing, but as reported in Glossy, it is a “realigning of store inventory.”
As I see it, the challenges a company faces when filling a market need in many ways parallel what a company faces when it identifies a hot trend, and must decide whether to pursue business related to the trend, which I wrote about previously. The mere existence of a market need or a trend does not necessarily mean there is a fit with a company’s strengths. And, if there is not enough of a fit, success can be a real challenge, if it is possible at all. Furthermore, moving too quickly can detract from how well the new line of business will fit.
In conclusion, the lesson here is that merely identifying a market need, even if some market research was involved, is not enough. To successfully implement the filling of that need, a company generally must take a more gradual, stepwise approach to get all the pieces working correctly. Too broadly and too quickly generally doesn’t work, as Old Navy has found.