With the UK entering its third Covid-19 national lockdown – at an estimated cost to the economy of £400m a day – spending in the first quarter of this year will not only be £24.57bn lower, according to Oxford Economics, but the country is facing the first double-dip recession since 1975.
Tens of thousands of businesses have been forced to shut, with others on the brink, so marketers will face major challenges in fuelling the economic recovery across the sectors which have been the hardest hit – including leisure and hospitality, high street retailers, and charities – without breaking the bank.
So, what do industry leaders believe marketers can do to help brands recover from one of the most devastating economic earthquakes the global economy has ever witnessed?
Econsultancy managing director Richard Robinson says marketers must first recognise that the past year has witnessed the digital transformation of the masses.
He adds: “Everyone, no matter who they are or where they’re from, has grown in confidence and competence online and finally learnt the last mile really is the only moment of truth for customer experience.
“Being a marketer in the middle of this unprecedented acceleration of change has meant being at the epicentre of customers’ transformation, experiencing the move to realtime, seamless omnichannel brand relationships and an insatiable desire to consume content and purchase product whenever and however they like.”
However, Robinson reckons that, despite all of this, the role of marketing has not changed and the industry must continue to champion the customer, drive growth, innovate and communicate.
He continues: “To keep brands one step ahead of customers’ growing digitally fuelled lifestyle marketers need to upgrade their knowledge, skills and mindset to survive and thrive. In a world of frozen headcounts, restricted budgets and the need to do more with less, there is no greater priority for every professional marketer in 2021 than learning their way out of the crisis.
“To quote the great Peter Drucker ‘because the purpose of business is to create a customer, business has two and only two basic functions: marketing and innovation. They product the results, all the rest are costs. Marketing is the distinguishing, unique function of the business’.
“Drucker was profoundly correct, but, if a marketer is either unable or unwilling to step up learn the new rules of engagement for maximising brand value in the new app-normal, the brands they serve will not see out the next 12 months. “
REaD Group client services director Dean Standing believes that marketers need to spend more time focusing on understanding their customers by increasing the amount of first party data they collect, and then combining it with third party data to enhance it, and build the best possible view of an individual.
In this way, brands will be able to determine customers’ likes and dislikes, and how and when they want to be communicated to, he argues, adding that companies can then use all of that knowledge to create inspiring connections with their customers.
However, Standing also cautions against brands being needy and over-communicating. He continues: “Companies should analyse contact frequency and build a communications programme accordingly, but they shouldn’t just rely on the likes of email; traditional channels still deliver ROI and increased lifetime value. Direct mail and SMS are quietly exceeding expectations.”
Richard Exon, founder of Joint, adds: “Covid has exposed and accelerated inequality right across the country. This is as regrettable as it is undeniable. But it’s a challenge businesses and brands are well able to rise to. Because everybody, no matter their income and material wealth, needs help this year. People on lower incomes or out of work require understanding and active support.
“Timely information, honest pricing and fair dealing from brands can make the world of difference to individual lives when money is tight. Admiral Insurance’s Stay at Home Refund was a 2020 highlight with its blend of insight, empathy and good old fashioned creative thinking.
“If every company framed the pivotal question ‘how can we help more people more of the time’ in a similar way 2021 could prove to be a high water mark in smart brand action.”
Exon also believes that brands which cater to more materially comfortable audiences will face a “blizzard” of competition, adding that one consequence of growing inequality is that some people are better off today than they were 12 months ago.
He cites commuting professionals, who have been able to keep their jobs and previously enjoyed high discretionary spend on holidays, eating out and leisure activities. In fact, the Centre for Economics & Business Research (CEBR0) used ONS data to calculate an average saving per household of £7,100 through lockdown.
Exon comments: “Given that figure is an average, if it is even nearly accurate it points to a huge build up of consumer spend that businesses will be competing for fiercely in 2021.”
Meanwhile Brand Potential co-founder and CEO Mary Say believes brands will need to wake up to a new era in which conspicuous and mindless consumption is no longer acceptable.
She adds: “Brands will need to accelerate their focus on delivering products and services that have a positive impact, whether that’s on people, the planet or simply on our pockets. Consumers are going to be more mindful of their purchases, choosing brands that serve a genuinely useful purpose, or that provide reassurance that their hard-earned money is being spent in the right way.”
In terms of developing new ideas to tap into changing consumer behaviours, Say maintains that it will not necessarily be about more, new, bigger ideas; it could be about rationalising an existing portfolio, and renovating what is there, with an innovation mindset.
Say explains: “A close look at your brand architecture can give you less products to support, and make your range work harder. Smart packaging solutions can enable you to cut costs while adding value. Apply an innovation lens to claims, formulations, packaging; sustainability, so that your brand can say and do more, with less. And, of course, every innovation should do good, for the consumer, company, community and category.
“Sustainability is no longer a nice-to-do; it’s a must-do. Before Covid, we were seeing a significant rise in brands looking at sustainable innovation. And while this may have been temporarily put on the back burner while brands were in the trenches, we will see sustainability rising rapidly back up the agenda as consumers become more discerning and thoughtful about their choices.”
REaD Group customer engagement director Scott Logie is in little doubt about the direction marketers need to take, saying that “without stating the bleeding obvious, data has to be the answer”.
“First of all, there are a number of models available to provide insight into which consumers are the most at risk, economically, as a result of the pandemic. It is a surprise to me that more brands are not mining this data.
“Having said that, I get that survival has been key and it is interesting to me that the clients we have seen surviving, and even thriving, across the past year, are those who have continued to market, to engage with their consumers and across different media. And also have not appeared to be desperate – they have stuck to what they do well, continued to service their customers and prospect for more.”
Exon concludes: “Brands will be key to businesses successfully navigating what the world becomes post lockdown and post Brexit. In particular brands that deliver actions not just words.
“There have been so many broken political promises at a government level – the deal was neither the easiest in history nor oven ready it turns out – that glib headlines and promises of sunny uplands just don’t cut it any more. When we look back at 2021 we won’t ask ‘what did brands say last year?’ we’ll ask, ‘what did brands do’.”
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