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Why Niches Are the Next Growth Opportunity

J. Walker Smith

As personalization increases, brands will find growth opportunities in niches rather than mass markets.

Growth looks small these days. Most large, multinational brands are finding it difficult to grow not because growth is unavailable, but because when growth looks small, big brands struggle to see it. This shift is here to stay.

An analysis by the Financial Times Stock Exchange reported that profits for its more than 700 global firms located in developed markets declined by a jaw-dropping 25% in the five years prior to 2017. Yet at the same time, profits of smaller, national firms rose by 2%. Admittedly, profits aren’t the same as revenue, but this pattern of profitability is illustrative of the shift in the marketplace.

More to the point, an analysis by the competitive intelligence firm Craft found that the combined sales of Fortune 500 firms dropped from 2014 to 2016, largely due to poorly performing large companies, which have a disproportionate influence on aggregate results. When individual firms were broken out and assessed, nearly twice as many grew as shrank. Growth was occurring, just among the smaller firms, not the large ones.

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J. Walker Smith is chief knowledge officer for brand and marketing at Kantar Consulting and co-author of four books, including Rocking the Ages. Follow him on Twitter at @jwalkersmith.​