A "Fast Follower" is an organisation that waits for a competitor to successfully innovate before imitating it with a similar product. The Fast Follower strategy relies on a company releasing an imitation product in rapid time to secure vital market share before the competition.
We take a deeper look at some of the approaches organisations are using to make them more innovative and the pros and cons of the Fast Follower approach.
Increasingly those sectors not directly impacted by the growth of eCommerce are being challenged by the expectations of their customers and the rise of the disruptors as they seek to satisfy the customer and take market share.
Enabled by technology and multiple channels to engage with businesses, today’s customer expects all aspects of their life to be enhanced by a digital experience. In this dynamic, the empowered customer wants to be able to self-serve and access information and services across multiple devices 24/7.
For those businesses that have yet to fully respond to this demand, there is a need to innovate and develop a customer-led strategy.
The Fast Follower approach allows organisations to avoid the mistakes of others before them - the "First Movers" - and then adopt best practice for a customer community already familiar with the innovative changes.
Often First Movers launch without fully understanding the customer or the potential product’s problem. Their focus is on the land grab. However, the Fast Follower can refine and follow in their footsteps without the “trip hazards” that the First Mover experiences.
Technology companies, in particular, can reap the benefits of coming in from behind, according to J.P. Eggers, assistant professor of management and organisations at NYU's Stern School of Business. He puts this down to two reasons. First, that they get to observe the market, see what takes, and then go all out in that technology. And secondly, that they get to take advantage of the First Mover's learnings and mistakes.
With the rapid pace of technology advancements, there is a need to educate customers to gain appeal for new products. Being second to pitch means you don't need to do the education and selling that the First Movers have already done. The demand is already there. And better yet, you'll be able to create something even better.
The First Movers are the risk takers. And one thing that comes with being a risk taker is if you fail, you fail fast. It's hard to come back from that; scepticism may creep in and affect the response to future products.
Ultimately, the Fast Follower gets to take advantage of the market opportunity created by the First Mover.
The First Movers have already set the benchmark. So Fast Followers need to deliver a more complete solution. There's no room for error. The Fast Follower needs to get it just right.
The Fast Follower also needs to take into account a constantly changing market. You may think you understand the customer, but their needs change - often, and in some cases dramatically. Especially when a new competitor or new product enters the market and shakes things up. Standing still is not an option and Fast Followers need to act quickly.
And what about if the First Mover succeeds? You've been pipped to the post and lost out on a great opportunity. Just a small loss in your market share can be disastrous. And once they're on board with a new product, getting them to switch can be challenging.
Consumers are also more forgiving of First Mover errors, according to professors Henrich R. Greve and Marc-David L. Seidel. They argue first-to-market companies establish strong customer relationships and are therefore better able to recover from technology stumbles. There is an expectation that companies coming second to market should know better.
So is it good enough to be a Fast Follower? Snapchat were the First Movers in launching the video stories feature, but Fast Follower Instagram has surpassed their success. Instagram Stories has become one of the most popular avenues for sharing social media content, and now has more active daily users than Snapchat Stories - demonstrating a win for the Fast Follower. Apple, Google, Facebook - these are also all examples of Fast Followers who have reaped the rewards of observing the mistakes of their predecessors.
And whilst a First Mover can gain a competitive edge and market share, there's a lot to be said for the Fast Follower approach and learning from the mistakes of others before you. However, in the case of First Mover failure, Fast Followers need to be just that - fast. They need to come in with a better solution while the demand is still there. And the pressure is really on to not repeat the First Mover's mistakes.