Case Study
Truworths International
Recapturing market dominance through a new cultural value system
Challenge
Truworths, an international fashion retailer with over 300 branches, began to lose its dominant market position. Its attempts to replicate its competitors’ successes drove them further into a spiral of declining market share despite buoyant economic conditions at the time.
Truworths needed to find a way to differentiate themselves in the market and stimulate a new way of thinking about their industry.
CEO
Insight
Truworths engaged Lapin International’s innovation consulting services to help their leadership team move beyond the space that was occupied by its competitors.
Through Lapin’s strategy process, Truworths uncovered the very soul of its purpose – both as a group of individual leaders and as a business enterprise.
This allowed the leadership team to gain a deep understanding of why people buy fashion, and why they pay such a premium for it. It uncovered customers’ intangible yearnings that can be satisfied in the buying experience.
Using the Truworths purpose as a framework to inform every aspect of their business, they aligned the way they purchased, merchandised, managed people, advertised, and designed their customers’ unique experience. Truworths’ customers began to experience something that was visibly different from their experiences with other fashion retailers. Truworths did more than supply fashion. It instilled a feeling of pride and dignity in the target customer it identified.
Action
- Lapin developed a unique Truworths value system, unlike a set of values, with which the company built a culture unique to them.
- The architecture of the new culture that founded in the value system was designed directly with the executive team and was used to deliver the intangible experiences promised by the Truworths purpose.
- The new culture that Truworths developed was indigenous to it and its leadership so that it could not be copied by competitors. It became a vital component of its strategy to deliver a differentiated offering.
- Using their value system, Truworths unleashed human energy and innovation, liberated their managers from bureaucracy and empowered them to make agile and sound decisions.
Impact
Since engaging in Lapin International’s innovation consulting process, Truworths have achieved in excess of a 25% year-on-year average growth rate. Truworths’ returns on equity in excess of 50%, have defied market analysts. They were rated as the second best fashion retailer in the world (after Abercrombie & Fitch) for return on investment and margin.
Truworths has moved beyond the very idea of competitive advantage and has instead developed what Lapin terms, “Distinction.” A unique combination of customer experience and culture that, built from within its own DNA, cannot be replicated by competitors. In recognition of Lapin International’s work, David Lapin was invited to join Truworths International’s first Board of Directors after it was listed as a publicly traded company.