QUICK READ: Change is coming and in some cases, it’s already here. Even in states that are open consumers aren’t spending like before the pandemic. What you learned in your first marketing course is moot. Time to update marketing to reflect what consumers want from a brand.
Segmenting, target market, mass marketing metrics. Goodbye. Hello to micro segments, relevant messages to relevant audiences and in the end sales is not a metric anymore because earning more on what you sell is.
Across the world, consumers are emerging from lockdowns warier and more thrift-conscious than before. That will drag on any recovery and could encourage governments and central bankers to follow up on coronavirus handouts with more costly stimulus.
Commonplace brands such as chocolate giant Hershey or toothpaste-maker Colgate say consumers have traded down. Dollar stores, meanwhile, expect to open their doors to a new set of customers as they did after the 2008-09 Great Recession.
Is branding dead? No but consumers have become a LOT smarter about shopping and they are not buying brands that don’t align with their values. They also know that the higher prices are because of advertising and most advertising is way off the mark.
Much hangs now on what happens to the mountain of savings built up by those households which weathered the worst of the lockdown fall-out and have pushed the overall U.S. savings rate to a record 33% of income. Will they spend again? Probably not until President Biden is sworn in and a real leader makes them comfortable that we can unite and beat the pandemic.
Even though my business is thriving I have put off major purchases and cut back on others. I keep asking “what if?” and right now consumers are doing the same thing.
What are brands to do?
1ne: Examine your brand, not as you want it to be, but as consumers view it.
2wo: Get rid of the same ads you were using before the pandemic and social issues. It shows you’re out of touch and is a waste of money.
3hree: Start realigning brand marketing teams to be more responsive. Ditch the Zoom meetings and PowerPoint’s. Change your organization to be more responsive to the marketplace.
4our: Shorten distribution channels. If you need an explanation you’re in deep mud.
5ive: Use this time to go out, into the marketplace, and watch how consumers are shopping.
6ix: Forget about the pressure to increase sales. Right now is a great time to take costs out of your brand. Ditch unnecessary advertising and promotions that are irrelevant.
7even: Look at everything you do as a consumer. Why should I buy from you and what is the brand promise? For a lot of people, the brand promise is simply a good product.
8ight: Learn to talk to micro-segments instead of mass markets. People living in a small town in Mississippi don’t view some ads the same way as people living in Chicago.
9ine: If you become a “hot brand” because of a wanted product it may be only temporary. Don’t push for line extension right away. Tide expanded too fast which confused consumers and now P&G is cutting back products.
10en: Finally you need to keep a pulse on consumers. I believe they are going to permanently change but at some point, they WILL start spending again but they won’t waste money on brands that don’t listen aren’t responsive.
Finally, look for people who consistently think differently. People who fight the bureaucracy and want to take advantage of opportunities NOW. The biggest challenge facing brands is going to be their own internal organizational structures and convincing MBA’s that a “numbers” approach needs to change.