Exceptional insights from a past, placed candidate. Executive search for marketing leaders.
Start Preparing Emergence From COVID-19: Preparation over Predication
- Published on April 30, 2020
Status is reachableIpalibo DawaribokoStrategy Lead – Global19 articles Following
No one can predict the future, but anyone can prepare for it. To prepare brands for the future after COVID-19, I looked at past crises and potential future scenarios, learning from what China went through most recently.
Learning from the Past Pandemics
As unique as our experience is today, there are elements from the past, from which we can learn. From the Spanish Flu of 1918 to the Swine Flu of 2009, there is a lot to learn from our collective history, but one lesson stands out.
Research on past flu pandemics by Le Moglie et al. (2020) showed that pandemics cause long-lasting declines in social trust, due to the experience of social disruption and generalized mistrust of news media and government.
From a marketing standpoint, trust is critical, and up until recently, brand trust has been in decline. Importantly, research shows that brand trust has a significant impact on brand equity metrics (Delgado and Munuera, 2005). As of 2019, three-quarters of consumers thought it was now harder to trust what brands say (Ford and Harris Insights and Analytics, 2019). And research from Denstu (2019) showed there is a misalignment between consumers and CMOs on how best to increase brand trust.
Combining these insights leads to one clear conclusion: strengthening and solidifying the trust consumers have in your brand should be a critical part of any present and future plans.
And there is an opportunity now for brands to act. Based on the first weekly COVID-19 Crisis Navigator tracker from Denstu USA (4/2/20), we know that people are looking to brands for action. At this point, there is a general sense of ambiguity as consumers figure out how to best respond to the outbreak, and they want guidance. Consumers are also looking for brands to put people before profits – donating to those in-need and taking care of their employees – over simply just acknowledging the outbreak.
Learning from Past Economic Challenges
As building brand trust is vital during and after pandemics, so is maintaining other aspects of strong brand equity. A look back at periods of economic uncertainty and challenges reveal common pitfalls to avoid.
One common temptation is to over-invest in product promotions at the expense of brand building activities. Multiple studies reveal that while this is an effective short-term driver of sales, it can have a negative long-term impact on your brand and customer experience overall (Marketscience, 2020). Another common pitfall is to simply cut budget absolutely, or deeply. Historical research suggests that companies which go dark for a year or cut investment in half, take between 3-5 years to recover to pre-budget-cutting levels (IPA, 2005; Millward Brown, 2008).
When we look to the past, we quickly learn that strong brands become a premium multiplier for business stability and growth during times like this. Building strong brands, focused on solidifying trust, during this time requires preparation for how consumers’ mindset and behavior will likely shift.
Learning from China
When we look East to China, who is further ahead on the COVID-19 journey than we are, we see a mix of pessimism and optimism from businesses and consumers.
In China, almost all small-and-medium-sized businesses (96.4%) have suffered losses as a result of the pandemic, with one-quarter (26.4%) expressing some degree of pessimism for the future. In contrast, one-third (31.9%) of businesses are cautiously optimistic about the economic situation and over three-quarters (78%) of consumers are optimistic about life after the pandemic (WARC, 2020). Understanding the shifting mood in society is important as consumers expect brands to speak up and act during this time (Kantar, 2020).
As moods shift, so does behavior. Half of Chinese consumers purchased products online that they would normally buy offline. Mobile gaming and short video consumption grew 43% and 14%, respectively (WARC, 2020). Interestingly, experts expect the post-pandemic optimism felt by consumers to result in a sharp rebound of activities, which were strong pre-pandemic, including OOH dining, entertainment, and travel.
These shifts in behavior, in turn, has affected media spend. The biggest hit channel is China’s traditional media. Newspaper and magazine expected spend dropped by 16% and 12%, while OOH spend is expected to grow just 0.7% down from the expected 2.5% growth rate.
As traditional media suffers, emerging media is seeing a boost. China’s live-streaming commerce market was worth $4.4bn in 2018. Now, an estimated 525 million Chinese consumers will watch a live stream in 2020 (iMedia Research). Further, in early February 2020, live streams on Taobao, Alibaba’s e-commerce platform, saw a 110% year-on-year leap in users (Gartner). As a result, brands (including Nike, Monki, Diane von Furstenberg, Audi, and reality TV star Kim Kardashian) have used live-streaming to engage consumers and sell products.
By quickly pivoting their focus to their online app, Nike reported only a 5% decrease in sales for the quarter ending Feb 29th despite closing stores in China. Its online app saw an 80% increase in active usage in China over the quarter, resulting in overall sales growing 30% online.
So, how should marketers prepare for the future in the US?
As you set out to navigate this moment we are in, your mantra should be ‘preparation over anticipation.’ In preparation, I advocate your start with the core of great marketing – people. Looking at past pandemics, people are wavering in the trust of societal structures and institutions. People are looking for brands to act and speak up. People are adapting. Lastly, and most importantly, people want to be optimistic about the future.
In this moment, how do brands solidify, and even strengthen trust? Trust is the basis of any relationship, and marketers should look to treat their brand like they would any other relationship, looking at the fundamentals of EQ (emotional intelligence) to better understand where to focus, where they are strong, and where they have opportunities to be better.
So, with people and their current needs states in mind, here are five actions marketers must take now and in the future:
In The Midst of Covid-19
- 3×3 Scenario Plan – Partner with your strategy and research teams to brainstorm how (1) your category’s core business will be impacted long term and (2) your consumers’ behavior or mindset will change over time (e.g., moving from security to freedom). Remember you aren’t trying to predict the future, so brainstorm at least three possibilities in each area, based on need states. Then mix, match, and identify what actions your marketing and media would take in those scenarios. If done right, you will end up nine possible scenarios and nine corresponding actions for your brand.
- Maintain Brand Exposure – Top of mind awareness matters during periods like this. Historically, turning down the lights on your brand has a serious negative impact that can take years to recover. Keep speaking up – your consumers want and expect you to.
- Build Trust Aggressively – As consumer trust wanes, brand trust becomes a premium multiplier for your business. Partner with your strategy and research teams to understand how much trust consumers have in your category and brand. Investigate what they view as trust-building behavior, don’t assume. Once you understand this, begin building trust aggressively to stand out in your category in the short and long term through your communications.
- Move With Speed – As the pandemic comes to an end, consumers will likely be hungry to experience all that they gave up during quarantine. (ex. China Revenge Shopping) There will likely be a flood of spending and activity across categories, media, and culture. This will be a critical time as consumers look to re-establish and form new spending habits, so speed will critical for brands. Prepare yourself to market with speed and agility, based on “new normal” scenarios.
- Adapt & Innovate – While consumers will return to old habits, many will retain their new habits. We will likely see sustained levels of e-commerce and, slightly reduced but still strong, activities in gaming, live-streaming, and short-form video consumption. Account for these in your scenario plans and adapt to take advantage of the new habits that are sustained.
We end as we began by acknowledging this truth: no one can predict the future, but anyone can prepare for it.
Until next time, stay prepared.Report this