By Bill Gullan, Finch Brands
Reeling from struggling earnings and loss of market share, GNC recently announced a “One New GNC” rebirth initiative. Closing U.S. stores for one day on December 28, 2016, the company rolled out a store redesign, a revamped loyalty program, and a (merciful) end to different prices online and in store. There is clearly a need for business and brand evolution, yet this approach raises a series of interesting questions:
1. Are they focusing on the right things?
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There’s no question GNC is addressing areas in which it has fallen behind. Yet will a new store concept — driven by technology — win back consumers the company lost to other channels or direct businesses? Put another way, I’m not so sure the world needs a 9,000-unit specialty vitamin and supplement store when its highest interest categories are available everywhere from Amazon to food/drug/mass.
2. Will there be unintended consequences?
GNC’s previous loyalty program was a strange concoction based on steep discounts on certain days each month. The new iteration makes more sense, but how will consumers educated by GNC to shop a certain way react when their patience and discipline is rewarded differently? Hopefully not like JCPenney’s customers did when faced with a major change (or elimination) of incentives — they revolted.
3. Is GNC a brand for this moment?
While the vitamin and supplement category is large and mature, GNC occupies a volatile position given the competitive dynamic — but it goes deeper. The company has stood for engineered nutrition, while many consumers are heavily scrutinizing ingredient panels and skeptical of synthetic processes. In short, GNC is selling the power of science while the consumer zeitgeist is all about the simplicity of nature.
Every so often, a major company shifts direction. Sometimes the changes are too big, too fast — like JCPenney. Sometimes they get it just right — like Domino’s, which combined product improvements, promotions and self-aware marketing to regain leadership. Sometimes, however, the changes just aren’t big enough.
It’s easy to sound off with neither the data set nor responsibility of GNC’s management team in Pittsburgh. Still, my sense is that GNC is using a cosmetic fix to address fundamental issues. If even the CEO admits GNC’s model is ‘badly broken,’ I’m not sure this effort goes far enough.
As President of Finch Brands, Bill Gullan is one of the marketplace’s premier brand developers. A world-class speaker, writer and facilitator, Bill’s point of view is highly sought after by clients and in the worlds of media and academia. Across a nearly 20-year career, his work has influenced hundreds of brands — including particularly powerful recent successes for Everlast, Conair and ThinkGeek.
