One of my favorite recent brand transformation stories revolves around Electrolux, the global appliance leader that for most of the past 50 years remained little known because it relied heavily on country specific brands such Frigidaire in the U.S., AEG in Germany and Rex in Italy for the majority of its sales.
The storied Swedish appliance manufacturer realized it needed to build its flagship Electrolux brand globally to compete effectively against emerging large, multi-category, brands such as Samsung and LG. The task was daunting. In the U.S. the brand was only known for high quality vacuum cleaners. In the U.K. the brand was positioned to compete in economy price tiers.
To start their transformation journey, the Electrolux leadership team found a new way to segment the market through exhaustive research around the globe. They honed in on groups of consumers who are under-served and who have the potential to drive significant sales, margin and equity to the brand. They profiled the key segments’ needs, tastes and personalities – even giving them names. These archetype consumers are the stars of the Electrolux transformation journey.
The company is now taking its insights to the market with a focus on product and experience innovation. In the U.S. a number of critical shopping experience touchpoints were launched that have altered the shopping terrain within the category. They include traveling designer showcases, sponsorships featuring Kelly Ripa, working with retailers in creating highly inviting and user-friendly in-store shopping environments and launching a best in category, engaging and intuitive web experience. Electrolux went all out to win with their consumers. Although there is still a long way to go, the brand has been put on the map in the U.S. and is truly separated from stalwart competitors such as GE and Whirlpool .
A conversation with MaryKay Kopf lends interesting insights into the challenges organizations face in meeting agendas for change. MaryKay spearheaded the transformation in the U.S. and has been leading the global transformation for the past two years as the first global CMO in Electrolux’s history.
How has Electrolux been transforming?
From being a manufacturing, engineering company to one that’s a world-class marketing enterprise, driven by innovation and focused on growth. It’s a positive journey, and we’re excited about it. But it’s not without its challenges.
Like?
For one, a shifting customer base to emerging markets, with a growing middle class, and where many will buy their first appliance in the next five to 10 years. Further, half of our business comes from unplanned purchases as many customers are upgrading, not remodeling. We’re figuring out the dynamics to that and how to approach the sale differently.
Further, our competitive world has really changed. There are bigger players, some from traditional consumer electronics (think Samsung), for example. And we’re learning to better leverage our organizational talent both globally and in our 150 local markets. And lastly as we transform, a challenge is to focus on culture change and the importance of engaging employees and other stakeholders to help us move forward.
What are the linchpins of your change agenda?
Probably the two that are most important to us are innovation and the consumer shopping experience.
We’re a company loaded with ideas for innovation. We’ve got a heritage of manufacturing and engineering and have infused that with tons of inspired thinking and creativity to innovate, based on these great consumer insights we have developed.
One of the issues we face is figuring out how to accelerate innovation without falling in the “technology for technology’s sake” trap. We’re looking at more information than ever before to inspire our inspiration. And we’re challenged to engage every level of the organization around innovation, whether that’s around products, how we go to market, or in the customer experience itself.
When it comes to the customer experience, several key questions tend to come up. If you’ve shopped for appliances lately, you know the stores can show you a sea of sameness. It’s a bunch of white boxes. So one question is how we can make our products look different? How do we change that sea of sameness they encounter when they shop?
Then there are questions around the digital divide. Customers go online to research and figure out what they want. But since we’re talking about major purchases, they also go to the store to touch and feel the appliance to make sure it’s right. But if they get to the store and can’t find what they thought they wanted online, it’s a problem. We have to find a way to bridge that.
Lastly, that customer experience has to be authentic, whether it’s online or in-store. We need to make sure we know what we stand for as a brand – and that we are delivering that in a very visual and compelling way.
What lessons have you learned from this journey so far?
It’s all about the people. If there’s only one thing you can change, it’s the people. And that means getting the right people in the right jobs, inspiring them, making sure they know what the vision is, pushing them to grow and driving collaboration in the culture. We’ve made a number of changes. We’ve tried to make sure we have the right talent in place. We’ve grown a team of very excited, very motivated very talented experts working together on this journey.
Mary Kay Kopf was a featured presenter for Prophet’s Change Agent Webinar Series. To listen to her complete comments recorded on July 13, 2012, click here.
