Everyone seems to want a Stanley water bottle these days. The 40 ounce bottle has become a social media sensation, and it has skyrocketed in popularity with young people. According to Fortune, the recent introduction of a Target-exclusive Valentine's Day product line created quite a stir: " People are camping outside Target stores, and there have been reports (and social media videos) of physical alterations as people try to get the special edition of the cup that has become something of a multi-generational craze."
Interestingly, the company has been around for more than 100 years (founded in 1913). The brand enjoyed popularity with construction workers and outdoor enthusiasts for its rugged, utilitarian products. I remember my dad owning an all-steel thermos bottle, as did many other of his fellow factory workers. Trendy it was not.
In 2016 the company launched the "Quencher" - a very large water bottle (40 ounces) with a handle and a straw whose narrow bottom fit into a car's cupholder. The product did not enjoy market success until a 40-something blogger named Ashlee LeSueur started touting the product online. She even advised the company to market the product to women, rather than to the men the firm typically targeted. She encouraged them to create a line of Quenchers in many bright colors. The company's executives resisted for some time. Then they shifted gears, and they began to adapt the product and the marketing. The product has become immensely popular. Great news, right? Well, perhaps executives should still be worried.
When a brand explodes like in this case, executives need to ask themselves: Is this surge in popularity likely to generate a permanent lift in revenue, or are we experiencing a temporary spurt of growth that may subside? Could the bubble burst quickly, as other companies introduce copycat products, or as consumes move on to the next big thing? Given these questions, leaders need to think about how to mitigate the risks associated with scaling up quickly to meet this surge in demand, only to be left facing challenging circumstances if the popularity wanes quickly in the near future. Think Peloton, who did not mitigate these risks effectively. Here are a few thoughts about managing the potential downsides at Stanley:
1. Don't forget the traditional core customer, and certainly don't neglect their needs. Sometimes, firms take their eye off the ball in pursuit of new customers, and then capable rivals emerge to attack their core. What do the construction workers and outdoor enthusiasts need? How should we continue to innovate for them? Invest some of the new profits back in the core.
2. Scale up with caution. Don't over-hire in pursuit of the growth. Cutting workers later will be mighty painful.
3. Get comfortable with some product scarcity. That may even enhance the product's popularity. It may be better to stock out then to be stuck with a ton of excess inventory if the product suddenly loses its "cool" among these new customers. Moreover, too much product out there in too many places can actually contribute to a sudden turn in popularity, as people begin to complain that "everyone" has what they once considered a more exclusive product.
4. Be cautious about extending the brand further into new product categories. Investing some of the new profits in innovation makes good sense (rather than simply pocketing all the cash), but you have to ask yourself: Will we have a competitive advantage in this new category or market segment? If so, what precisely is our advantage? Don't just pursue growth without understanding the nature of the the firm's competitive advantage.
5. Watch product quality like a hawk. As production scales up rapidly, many firms encounter quality problems that quickly become a brand's downfall. Put in place strong measures to insure that product defects remain very low.
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