Month: April 2020

Who’d be in retail right now? While online vendors such as Amazon prosper (at the time of writing, the company is making $10,000 worth of sales a second), times for ‘brick and mortar’ shops have been – to put it mildly – torrid these past few years. Now, with the world enveloped in a Covid-19 pandemic, the going has got even tougher. Some retailers, many of them familiar high street names, have gone under – Laura Ashley being a recent one, with Debenhams, Oasis and Warehouse all teetering on the edge. In business, the motto is ‘adapt or die’, although given the extreme uncertainty of our current situation, adaptation feels like it is going to be difficult. So, we thought now would be an interesting time to look at how businesses – all businesses that depend on footfall, human presence and face-to-face meeting, not just retail – might cope and we have a few suggestions for how you may look to reinvent yourselves. The first thing to remember is that sticking one’s head in the sand is not an option. Things are unlikely to get back to normal anytime soon – indeed, they may already have changed forever. Some retail businesses, aware that the landscape had changed, were starting to adapt even before the coronavirus outbreak. Carphone Warehouse, looking at its data, had realised that its small standalone high street outlets were no longer profitable, so the company decided to close these down and incorporate mobile phones into its larger PC World/Currys stores, figuring that the latter’s tech offering would work symbiotically with the CW offering. Then there’s fast-fashion giant H&M, which, despite having opened new stores in emerging territories, has found its established markets in the US and Europe (where it plans to close 175 shops) under pressure. Management’s answer has been to change strategy, to use its 5,000 or so stores to act as logistical hubs to boost online sales: one can imagine your local H&M becoming not just a place to buy dresses and trousers, but also somewhere to pick up your online orders, maybe have a cup of coffee, meet friends, see a fashion show or the latest collections… the possibilities are almost endless, but to remain viable, a retailer must do more than just sell stuff, it has to add value, to offer shoppers an experience that’s worth their time and them travelling. In the affluent Battersea area of south London, Marks & Spencer has converted a medium-sized (and previously rather dowdy) clothing and food store into an ‘M&S Market‘, a kind of upscale miniature version of Borough Market, offering M&S favourites as well as ‘artisanal‘ goods, an in-store salad and herb farm fixture, local craft beers, food-to-go and so on. If you’ve visited, you were probably impressed – it reminded me of one of those upmarket New York grocery stores, the merchandise looks fresh and inviting, the layout is adventurous, it offers pretty much everything you could need, and there’s a real sense of theatre about the place. It’s somewhere you’d make a detour to, and spend time exploring. As someone who has a soft spot for M&S and who has despaired at the company’s tired retail estate and frustrating online experience, a visit to this store made me smile. I understand that early sales figures from SW11 are promising, so let’s hope it works. And of course, it’s not just the big chains who are looking at doing things differently. Many of the family-owned department stores that were once a feature of every town have gone under, but those that have survived have done so by offering that extra degree of customer service, and by providing – usually via their coffee shops and restaurants – a social hub, somewhere to meet friends, relax and have a natter. For older people particularly, oases such as these provide vital social contact with others. The online shopping experience may be convenient, cheap and efficient, but ultimately, it’s a cold, perfunctory process – which is why so many music fans still buy from record shops (although these have admittedly shrunk in number). Of course, all of these innovations are largely moot right now. As we are in the middle of a pandemic, social contact is being discouraged if not yet outlawed, and most business models seem to be broken. The emergency is as much financial as it is medical. But as unpredictable as events are right now, as bleak as the business outlook seems, there are still opportunities for those who are willing to do things differently. Where they were able to, many coffee shops and restaurants converted themselves into takeaway-only operations. I heard about a restaurant that, faced with enforced closure, had converted itself into a kind of retail outlet, buying supplies from its wholesaler as usual and offering customers ingredients and ready meals to take away and cook at home. Even our mighty supermarkets may be forced to change. The recent spate of panic buying has forced them into selective rationing and, visiting a supermarket, it’s striking how the staples are often in short supply, while exotic ingredients and gourmet sauces are still plentiful. One of the reasons for German discounters Aldi and Lidl’s success over the past few years has been their compact range (they are officially known as LADs, or “limited assortment discounters”) – typically an Aldi or Lidl will carry 4,000 lines compared to the 100,000 of a superstore. Research from Kantar and others has demonstrated that this limited range makes shopping easier and quicker, and actually strengthens the consumer’s perception of value. One can envision the supermarkets stripping out the dozens of fancy mustards or bottles of mirin to allow more space for the in-demand staples. And Amazon isn’t immune either – the online behemoth has said that it will not be stocking any more supplies of vinyl records, freeing up space in its warehouses and supply chain for more essential items such as groceries and toiletries. The out-of-home entertainment industry has been impacted perhaps more than any other sector, with theatres, venues and galleries closed and tours, festivals and concerts cancelled. How do musicians and actors make a living now? The problem of musicians seems particularly acute, as playing live is now practically their only means of scraping a living, the returns for recorded music being so meagre. Yet even here, there are some green shoots. A number of enterprising jazz, rock and folk artists and grassroots venues have started live streaming gigs straight to fans – the most high profile example being last weekend’s Lady Gaga-organised One World: Together at Home series of gigs, which featured the likes of The Rolling Stones, Elton John, Paul McCartney and Billie Eilish, which raised more than $127m for Covid-19 relief. With more and more people confined to their homes, there will be a hunger for entertainment of all kinds, and this could represent an opportunity for those wanting to take it up. There have also been (as yet unverified) rumours that streaming sites such as Neflix, Disney+, Spotify, Amazon, and Apple TV/Music have seen huge growth; and The New York Times speculated that the album (as opposed to individual tracks or the playlist) might make a comeback, with listeners looking for a richer experience. With stores switching to “logistical hubs” or fashion show destinations, artisanal food halls from M&S, barbers selling T-shirts, restaurants becoming retailers, what is the response going to be from marketing services, media, production and similar businesses? What good can be learned from what is happening right now? How do these businesses think differently too, use their creative energies to help their clients (in every conceivable sector) get through this most testing of times. This is where the dynamic, nimble, and innovative can steal a march on the big consultancies that have eaten into their domain so much in the past few years. Creatives, technologists, and planners will need to concentrate not just on award-winning campaigns, but business solutions. Times as extraordinary as these will require different thinking and new ways of working; and without putting too much of a gloss on what is a grave crisis, this could be the biggest opportunity for agencies since the 1950s. Peoples hands are being forced to find new and innovative ways to solve client problems, and there’s no people better to do that than those within the creative community. Some of the ways that businesses may look to adapt or reinvent their service offerings and models may include: Recognising that the disintermediation process will continue as clients develop more digital marketing and creative capabilities internally. You could look to step towards this, rather than bemoaning it, and assist in the process by offering clients access to talent that can work within these departments on a temporary or permanent basis. Clients may want you to develop the strategic approach and the ‘big idea’ that then gets handed over to their internal department to take on and fulfill across their communications and content channels. Or the reverse, where the clients wants their internal thinking to be activated by highly effective and efficient execution agencies. Becoming digital and technology partners to your clients. It is clear that technology has now become a critical factor in developing competitive edge for brands – the current environment has now elevated this further. Many clients are unclear about which technology platforms are right for them and how to integrate and leverage these into their marketing ecosystem. This is an opportunity for you to develop deep strategic partnerships with clients on the basis that you can help clients understand how technology can give them the edge to win in tomorrow’s markets. Another area that you can deepen your relationship with clients is in relation to data. Clients now have access to massive reservoirs of data that can be utilised to shape messaging, new product development, innovation and marketing investment optimisation. In many cases this data is underutilised as clients have simply not figured out how to even begin to draw out the necessary insights and conclusions from it. You can utilise your strength in creative thinking to synthesise the data into new approaches to strategy and marketing communications in these rapidly shifting times. Yes, it does seem rather gloomy out there right now, but it is also an opportunity to reinvent yourselves in order to become indispensable to your clients for the next 20 to 30 years. And in keeping with this we are in the process of extending our own offering – watch this space. Read more

As the world faces its gravest crisis since the second world war and the Great Depression, it is inevitable that our attention will focus on behaviour – of all sorts. Since the Covid-19 pandemic affects just about everyone, will impact every corner and sector of every economy around the world; and because the disease occupies just about every square inch of newsprint and every minute on virtually every type of media, there’s no other story in town and, in developed economies at least, it feels as if we are on some sort of war footing. And while during the war and the Depression, negative coverage tended to focus on the bad behaviour of individuals or groups (from nations to companies), in our brand-dominated age, the focus in 2020 falls on brands. Interestingly, earlier on in this developing story, coverage tended to focus on the brands that were doing good things, behaving altruistically. But as the scale of the crisis has escalated, and the reach of the virus has become universal, and in the “wartime spirit” of “we’re all in this together”, it is now expected that brands will behave well, acknowledging the depth of the crisis. So, earlier this week the housebuilder Taylor Wimpey – one of the first construction firms to close down its sites – said it was scrapping annual bonuses and announced that its board were taking a 30% pay cut; and, the same day a number of major banks announced that, following order from the Bank of England they were scrapping shareholder dividends and were thinking of doing the same with bonuses. Given the crucial role that the banks – who have, in the eyes of a great deal of the public yet to be forgiven for their role in the 2008 crash – are going to play in the coming weeks and months, especially as hundreds of thousands of companies and individuals teeter on the edge of ruin, banking brands will come under the spotlight more than any other brand. Already they have been criticised for being ‘too commercial’, and I think, as a result of public and governmental pressure, we can see banks becoming less hard-nosed and fulfilling a social function, perhaps even working in the service of the wider public good rather than the demands of stockholders. Given the scale and reach of the suffering caused by this pandemic, the public – and perhaps governments, particularly if they’re looking to get re-elected – aren’t going to forget or forgive those brands which transgress, and not just banks either, which brings me neatly onto a fascinating survey – The Trust Barometer, compiled by PR giant Edelman from 12,000 respondents in leading global economies – published this week. It says that brands’ actions during the coronavirus pandemic will have a significant impact on future purchasing behaviour for consumers (as a side note, it will be fascinating to see how followers of certain Premier League football clubs, who have so far made an absolute hash of things during this crisis, react. As every marketing student knows, footy clubs enjoy unrivalled brand loyalty – if they are seen as behaving in a way that goes against current sentiment, such as furloughing ground staff whilst continuing to pay the full salaries of professional footballers, what will happen to their support?). Already, reveals the Barometer, consumers are demanding that the must change the way they interact and communicate during the Covid-19 crisis, with 65% agreeing with the statement ‘How well a brand responds to this crisis will have a huge impact on my likelihood to buy that brand in the future’. When looking at individual country responses, the figure for the UK was 64%, with China (interestingly) way out in front with 88%. One-third of respondents said they had already stopped using a brand that was not acting appropriately in response to the global crisis. The importance of the role brands could play is reflected in the sentiment that globally 62% of consumers said they did not think their particular country would make it through the crisis without brands playing a “critical role” in the fight against Covid-19. And, even more importantly, consumers are holding companies to very high standards – the first thing they demand of brands and their owners is for them to ‘protect the well-being and financial security of their employees and suppliers, even if it means suffering big financial losses’; with 90% of global respondents supporting this statement and 52% saying brands ‘must’ do this to earn or keep their trust. Another vast majority (89%) said brands should shift to producing items that help people meet the new challenges presented by the virus and/or offer free or lower-priced products to health workers and other high-risk individuals. We’ve already seen this, with formula 1 racing teams and others offering to make ventilators (and working with the NHS to design and provide equipment), companies such as Zara owner Inditex switching to mask and PPE production, Diageo providing 96% ethyl alcohol used in vodka and gin production to the production of hand sanitizer and LVMH, the luxury conglomerate, is switching production from making high-end perfumes to turning out the same. Various take-out food and coffee shops such as Pret were providing free hot drinks and discounted food to NHS staff and Uber are offering free rides and meals to NHS staff, whilst onboarding a significant number of independent restaurants and speeding up payments via Uber Eats. This is the new normal – it’s no longer good enough to be ‘great value’ or ‘good quality’, brands now not only have to respond to the crisis in a positive way, but they also have to be seen to be doing so. 90% of respondents expect brands to keep the public fully informed of how they are changing the way they operate in light of the global health crisis. Brands are warned against being light-hearted in their communication strategies with 57% advising against advertising that is too humorous. The public are entertaining themselves by sharing amusing videos and cartoons on social media, they don’t want brands to try to be funny and gatecrash the party. And it would appear they don’t want really want brands to connect with them regarding virus-related issues via social media with only 19-31% (depending on platform) wanting communications via Social, compared to 45% via traditional media (TV, newspapers and outdoor) or email (41%). Unsurprisingly, the most trusted spokespeople are doctors and health authorities (trusted by 78%), but strikingly, brand CEOs and brand ambassadors/experts were still trusted by 44% and 48% respectively, meaning that high ranking directors and marketers have an opportunity to build on and reinforce themselves as trusted advisers (or need to, depending on your point of view). So, in our new reality, brands should properly contribute to the greater good; not act alone. One of the criticisms of big pharma right now is that the companies are protecting, rather than sharing, their data – data sharing is seen as crucial to developing a breakthrough. Brands need to collaborate and work towards a common goal – we have seen this with supermarkets ensuring specific times kept free for vulnerable shoppers and sharing deliveries and data about stock levels with each other; they should solve, not sell; their marketing messages must be authentic and considered in tone, they must communicate with emotion, compassion and facts. And what part can marcomms agencies play? I think it will be a crucial one – one of wise counsel as opposed to just being the “people who sell”. Agencies need to focus on enhancing their role as protectors of brands. In this way, traditional agencies, which understand brand stories better than anyone (perhaps even more than the brands themselves), who know the power of visual and textual narratives to change behavior and reassure, can claw back some of the ground they have lost to ‘in-house’ and the big consulting firms. But that’s a subject for a future piece. Read more