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Growth. If you work in a company listed on stock exchange you probably are familiar with this elusive mantra. Growth is an imperative. If you work in an a US originating company or US based company Global Growth or Global Dominance is an imperative. Wall Street favours future over present as it makes money on bets on stock price potential between today and tomorrow. Wall Street rewards those who have Growth potential and who grow Fast. Faster you grow, Bigger your stock price.
The seductive promise of digital growth makes global brands wrongly discount serious organisational pains and challenges felt by their employees.The Seductive Promise of Digital Growth
Then we have digital. digital is a growth opportunity. Global brands are deeply aware of this. If one looks at digital as a channel for sales/distribution (I've discussed this in another article - Brand ON Digital or Brand THROUGH Digital) the promise of growth is alluring. If you're a retail brand (and in the end most are either via their own retail channel / stores or partners - distributors / retailers) you probably have experienced / are aware that your retail sales growth is flat or even negative. If you're very lucky you still have around 5-7-10 retail growth. However, those growth numbers are far from the Wall Street expectations and especially if you're a global brand. For a global brand some markets you're doing better, some markets you're loosing, so your growth in one market will be offset by other markets. Overall if you count just on retail sales you're not going to get many fans on Wall Street. They know you won't be able to grow fast, and well, Wall Street is about fast money in the end.
But, digital is different story. If you work in a retail brand you probably got the taste of this new "thing on the street" - digital is double digits, even triple digits growth. If you are a global brand I bet your shareholders got the taste of this new 'high' and got hooked on it. As retail sales are stuck flat or single digit, e-commerce, direct-to-consumer, digital or however you want to call it is growing 20-40%. Even more! Nike, in 2016 had a yearly growth of 40+% of online sales, impressive if one takes into account it's size.
Growth in fiscal 2016 Q3
While the share of online sales compared to total is still small, the seductive promise of growth shines like a star. For big players in industries naturally predisposed for online growth potential (For example Cosmetics) - and I'll take an example of L'Oreal- those numbers range around 7%
If you compound this growth promise with higher margin promise (more margin you keep to yourself as you're selling direct-to-consumers and usually lower costs of sales) you can understand the allure of and high bets being thrown in digital by Global Brands.
If you work in a retail brand you probably got the taste of this new "thing on the street" - digital is double digits, even triple digits growth.Growing Digital Brands, means Growing Digital Pains
However, growing digital brands means growing digital teams. And growing digital teams mean growing digital pains. Even though global brands are established companies, with developed capabilities and established processes in core / traditional fields they've dominated like retail supply chain management and traditional brand / marketing, Digital is a new field and new ball game. Growing on digital requires from global brands to acquire, develop or incubate new core competences and capabilities. At the same time they're asked to develop new competences, they're asked to grow both today and for future, in sales, which in marketing / brand translates to growth in execution.