A move from a business focus upon industry consolidation and benchmarking for efficiency, to consumer-centricity has a major impact upon brand management. For one, it means brand leaders will no longer have one or two major competitors but many smaller one’s.
The change of business from consolidation to disrupters, innovators and high value-added competitors, is causing many companies to re-think their future. This is most notable because the more innovative companies are able to achieve far greater levels of profitability, whether in products, services, retail models, business models or any other unique way of working.
As business is changing, brand marketing is changing because of digital disruption. So whether or not a brand or company accepts technology will change it, it will. Whether it writes new upstart disrupters off as peripheral, they may become central. As there are many of these upstarts, they will disrupt markets in many different ways. It makes it increasingly difficult for companies to define their “industries”. They are no longer able to focus upon one or two competitors, but a plethora.
The world has changed and is changing at a faster pace every day.
Whichever way, at the very least they force business to re-think how they work and market.
From “full frontal” attacks to brand fragmentation
Fragmentation is not a full frontal attack on any given brand – or even an industry – but it does signify the paradigm of competition is changing. It reflects the “art of the possible”. It “fragments off” the most desirable customers from incumbents. It makes the industry leaders experience a low level of discomfort and the visionaries ask serious new questions.
Many legacy brands are large. Almost omnipotent. It is not even easy to assess how digital technology will change some industries. It is also not as though most large brands will lose all their consumers overnight. Yet, every single brand will lose customers to small flanking brands. This may not be large at first, but it will often start with the more agile, profitable and aware consumers. The early adopters may in time become more mainstream.
Over the years, banks have lost much of their traditional product and service offers to other brands. This may not have impacted the organism significantly, but it is indicative of a trend that will accelerate with the availability of new technologies and the ease with which new brands are established in a digital era. It is also arguable that the new consumer is far more aware of market changes than 20 years ago. This creates a low level of discomfort (“Am I getting the best deal?”) amongst many of them.
For large companies it starts with acknowledging it is happening. That for one, there are now more uncertainties than certainties. Not easy to contend with as many large companies are used to being able to manage clearly defined environments.
Brand representation moves from two dimensions to interactive give-and-take
The tradition of brand marketing was based upon brand representation of a “flat” surface. This means it was based upon what the brand wanted to “present” to the consumer, rather than to engage with the consumer. It literally started with brand posters presenting brands to the consumer. The brand held up a sign telling you what it delivered. Simple, direct, show-and-tell. Little room for engagement.
Much of brand thinking is still based on that thinking.
Brands seem to find it very difficult to accept that their consumers are equally able to engage with them now. This relies on a far deeper level of consumer insight – mass marketing and segmentation are simply not enough when individual consumers react and engage in their own unique ways. Brand authenticity lies in being able to do the same. It cannot be “faked”, it has to be real. “Average” cannot do this. To do this, a brand has to deliver what it promises. This means a far greater interaction between “marketing” and the operations of a business; hence marketing has now become totally central to business. Now, while many companies may claim this was the case before, in my experience it rarely is.
Retail interface is changing
The emergence and growth of ecommerce is forcing the retail and media industries to re-think how they operate. This is taking much longer than what we expected. Some brands are starting to use QR codes. Some consumer magazines are starting to do this, merchandising in stores is starting to do this. Virtual reality is emerging in the more dynamic stores and areas of entertainment. It is starting in media brands such as Sport Illustrated and National Geographic.
Yet, the vast majority of retail stores and media continue to operate the way they used to.
Even the early adopters of ecommerce like Amazon.com are still stuck in a simplistic notion of predictive analytics. The brand has not moved on from its (initially very innovative) ability to predict the products and brands you may be interested in. That is while the depth of data they now have about a specific individual is vastly improved with more products, services, global and local, access to reviews, etc. The depth of data arguably enables a far greater depth of engagement with the consumer. Yet, to deliver this requires great agility and the adaptation of data, marketing technology and business operations.
The level of “distraction” for the average company has therefore multiplied. Distraction is bad for weak brands – it will attack the weakest first. This means at the very least, it forces companies to put consumers first, understand them well and leverage technology to engage them as effectively as possible.
At the very least, not doing so leads to a competitive disadvantage that will haunt large brands that ignore it. Market share lost is not easily won back. The better option is to make sure you retain and grow it.
So for large legacy brands – change while you still can, debate options while you still can. Waiting does not make a company more competitive, it simply forces it into a corner faster. It is always better to change when you are not yet forced to.
Technology enables consumer fragmentation
The most marked impact of digital technology is upon the individual consumers. They are able to live a life of personalised interface with their friends, peers and brands. Consumers can construct their impulses, communications, networks, interests, information and entertainment in their unique ways. They can now live in their own worlds. The construction of individual reality is real.
Consumers create content on an equal footing with brands and large companies. Consumers review, praise or criticise, on an equal footing. Consumers are able to make much more informed decisions about products and brands than ever before. Consumers are able to access vast sources of information, some highly specialised, when reviewing issues, studying or making brand decisions. Consumers decide to share content. Or they decide to ignore it.
All-in-all, consumers are in control. They have so much access that they pay attention for a very short time and become bored easily. This means brand innovation and brand experience innovation have increased significantly. Added to this, is the sheer access to abundant information, which means not only are the consumers bored faster, they are also tempted by competitors faster.
Digital technology enables total personalisation, contradicting the very principle of market consolidation
The fact that digital technology enables total customisation is diametrically opposite to the traditional mass marketing approach where “average” experiences was good enough.
A brand can now build a very personal, engaging, authentic relationship with the consumer. This means it is fast becoming the new “normal”. The key issue is that this is now expected by consumers; hence it is no longer something a company may consider as an option.
For some years, we have had brands like BMW offer consumers a certain degree of customisation. Today, with a brand like Tesla, this has almost become indefinite. A car can almost “take-on” the requirements, needs and “personality” of its driver/ owner. From being able to adjust controls, update its own software overnight, welcoming its owner into the car, Tesla is able to offer a degree of personal comfort no car has been able to do to date. This is largely because of a sophisticated yet simplified technology interface.
The notion of seamless consumer engagement, in a consistent and integrated manner, has always been elusive to brands. Manual systems, human failure, disparate technology, varying infrastructure, all made consistent brand delivery complex and almost impossible to attain.
Today, technology enables this. As The Internet of Things grows, systems integrate, online and offline marketing channels converge, brand experiences will become more manageable and seamless.
Yet, for companies to change, they need to think this way. It will not happen if they see digital technology as an adjunct to the central business processes and the rest of marketing.
The best brand, regardless of category, sets the standard of engagement and experience
There is something like “The Butterfly Effect” in business. This happens when something small that one brand does, resonates across all other brands, even if just in the most minute way. Once done, nothing else is the same thereafter. It changes the way in which consumers view all other brands regardless of category.
As an example, if my bank delivers an exceptional new experience, that becomes the level at which I now expect other brands to behave. It “re-sets” the scope of engagement of all other brands. Even within the constraints of data privacy, we do not like it when our bank does not know us, or tries to sell us the same thing (we don’t need) again and again. So while we are apprehensive of our data becoming freely available, we are also unhappy if our brands do not use it to our advantage.
We happily share everything about us on LinkedIn because we believe it will benefit us.
Another paradox of modern marketing.
Brand experiences are no different from experiences with friends. The better you know your friends, the more able you are to remain close to them. The more intuitive interface becomes, the more authentic it becomes. Technology enables it but also makes it imperative.
To conclude
A new business universe demands a new marketing approach. This means really putting consumers at the centre of the business, knowing as much as possible about them. Leveraging technology to engage them in the way they want to be engaged. It means innovation now has to be a far more central capability for companies.
The question has to shift from “why?” to “why not?”
For most companies, this means the uncertainties it deals with have multiplied many times. Living with contradictions is the new normal.
This also demands a new management style, greater agility, and arguably, the eventual death of companies stuck in conservative paradigms. If one thing became clear after 2008, it is that no company is immune to demise.
None of us can claim we know exactly where the future lies, or even what technology will be capable of. But we do know it can no longer be business as usual. We know we need to ask the hard questions, even if we won’t have answers at times. We know we will need to be agile. The risk profile of most companies will increase.
We do know we will need to inculcate innovation into our culture and DNA. The nature of innovation is the ability to live with contradictions. To accept we won’t have all the answers.