During difficult times, brands grow stronger and it’s crucial for CEOs to understand the mechanics of their brand in order to increase revenue or market share, and capitalise on this opportunity. Times of uncertainty and hardship motivates people to come together and unite around a central message. As the foundations of brand building are the same — connecting with people through identity, preferences, and ideas — the opportunities to strengthen and grow are prevalent. Building a brand
brand requires a long-term focus and scaled investment as a company grows. Broad reaching brand initiatives remain one of the best ways to increase market share and drive commercial outcomes in any given year. Genuine, sustainable commercial growth is achieved when a company can change consumer minds to influence buying behaviour, now and in the future. This is done by consistent value innovation; designing in response to consumers’ rational and emotional needs. Beyond products and services, it could be an exceptional digital, service or delivery experience, a tightly-bound brand or vertical community, inclusive, authentic and relevant communications, responsible environmental approaches, or creativity in cultural innovation. With reduced reliance on physical retail or experiences, forced changes in customer behaviour and needs, fewer competing options, and even greater convergence of distribution channels, here are some of the most important themes business leaders need to be aware of for driving modern brand growth. 1. Tapping into need states through authentic connections and communities New consumer need states have emerged, leading heightened expectations around accessibility, immediacy, and relevancy. Customers are naturally gravitating to brands that cater to new and/or evolved needs, whether it’s a rational need (deliver direct to my door) or emotional (teach me more about self-care). Brands that have moved quickly to adjust their strategies have been able to easily attract light or non-users (who may eventually become frequent purchasers). Going beyond this, many brands have demonstrated a sense of solidarity, shared values, and made efforts to bring people and businesses together. By facilitating open discussion in online communities, a company can tap into a consumer’s desire for access and belonging. For retail brands, it’s important to consider — and consider well — the person and associated communities you are ultimately selling to. Doing so enables a brand to expand reach with their desired audience where they spend their time online, and create value through genuine, authentic shared experiences. Geenie, Modern Fertility and, locally, Kmart, are ones to watch for the communities they are building. All three have tapped into the power of solidarity to create value for consumers, enabling them to connect, share, and shop whilst supporting the causes they believe in. 2. Driving growth through category and product innovation The decline of traditional retail, together with emerging customer needs has presented an opportunity for brands to expand or redesign their core products and category — and, in some cases for underdeveloped or new markets, fuel rapid revenue growth. Successful brand initiatives have met a combination of rational needs and emotional needs in the context of 2020. More brands are leveraging sub-brands to facilitate entry into new markets and capitalise on market growth, from American Eagle sub-brand aerie’s OFFLINE activewear collection to local online retailer The Iconic’s move into beauty and wellness. Beyond this, curation has allowed brands to drive revenue by increasing the perceived value of the product, either by offering greater convenience when shopping, or linking collections to an occasion or cultural moment. The Iconic does well in this space: the brand’s #StayHome collection taps into the changes in consumer behaviour during the pandemic with face masks, loungewear and activewear for living and training indoors. Meanwhile, retailers like Outdoor Voices have launched bundled product kits as a way of providing tailored product recommendations and increasing average order value online. Equally as ingenious are the brick-and-mortar stores, particularly those in the hospitality space, that are getting creative with branded merchandise collections. Iconic local institutions, such as Ray’s Bar in NYC, partnered with other small businesses to launch co-branded special edition shirts to generate much-needed revenue during a time when foot traffic was non-existent. The move paid off with over $8,000 in sales in just 48 hours and led to Ray’s Bar entering the wholesale apparel business. Looking across categories, new product partnerships, forged between unexpected yet complementary brands, are another way for retailers to push the boundaries and innovate in their category. These partnerships bring fresh ideas whilst allowing both brands to leverage the others’ audience and new ways of thinking. Lego and Ikea’s playful storage solution, Bygglek, is a standout example of how two brands can leverage one another’s strengths to reinvigorate their product category and create demand for a new product. Ideas like this are what enables brands to adapt and thrive during the pandemic: the Lego Group reached double-digit growth in sales and revenue in the first half of 2020, with DKK 3.9 billion in profit (AU ~$850 million). 3. Creating brand and commercial value through cultural relevance From the #BlackLivesMatter movement to climate change, the pace of cultural expectation and transformation has changed in 2020. Some brands have struggled to respond adequately, while others are addressing younger consumers’ demands for social change in creative ways. McDonald’s partnership with Travis Scott is a case in point. The fast-food giant, which has been struggling to gain cut-through with an increasingly health-conscious consumer, leveraged the musician’s social media power and youth appeal to create relevance with a younger demographic. The $6 Travis Scott meal resulted in a 20% surge in app downloads and an overall 4.6% boost in comparable sales for the three months ending in September. In a period of uncertainty, nostalgic fashion and reruns are also speaking to millennial and Gen Z shoppers who are longing for the comfort of a simpler time. Global brands, from Nike to Esprit, are rereleasing iconic styles from the archives and becoming culturally relevant again as a result. At the same time, brands are testing the waters in the multi-billion dollar gaming industry as a way to resonate and remain relevant with younger audiences. Fashion houses like Valentino & Marc Jacobs have created fashion lines specifically for Animal Crossing: New Horizons and integrations with Fortnite. 4. Acting as a force for the greater environmental good This year has seen a heightened focus on the circular economy, and more customers are consciously investing in brands that support sustainable business practices. In light of this, brands have reevaluated their sustainability goals to see what can have the most impact — and the ones that place their efforts front and centre are benefitting at the top and bottom line. Countering the fast retail trend, slow retail is now the standard that brands have to live up to in order to stay commercially relevant. Taking the lead in this space, Patagonia’s Worn Wear program and Toad and Co’s “Renewed Apparel” program both invite customers to repair, renew and upcycle their items so they don’t go to landfill. Other players in apparel and retail, such as For Days and IKEA, are opting for swap or buy back models to encourage repeat purchases whilst increasing their sustainability efforts. Even the world’s most influential retail brand, Apple, has manufactured its iPhone 12 out of almost entirely recycled materials — and pre-orders for the product sold out within hours of its announcement. 5. Integrating intention, balance, and wellbeing as core pillars of brand philosophy Amidst the uncertainty and anxiety of 2020, more brands are integrating wellness into their brand philosophies, both externally through their brand mission, values, and messaging and internally through company culture. These concepts of connection, wellbeing and balance go against the grain of the (often destructive) growth-at-all-expenses mentality we’ve seen from the DTC space in recent years. For the brands that take the time to invest in deliberate progress and balance, the payoff comes from sustained growth, greater brand and product consistency, and a higher degree of trust and loyalty from consumers. In a typically fast-paced luxury market, John Sterner is one brand that has slowed down the pace of production in favour of refinement and finesse. Describing themselves as the “antidote to the disposable culture”, this deliberate brand approach enhances their product value by conveying notions of exceptional craftsmanship and artisanal products. Partnerships are another avenue that large local retailers are leveraging to go beyond the tangible benefits of their product and tap into the emotional. Bedding manufacturer A.H. Beard’s partnership with Beyond Blue, Kit Kat’s limited edition RUOK? wrappers, and General Pants’ ‘Stay Bold’ campaign with Black Dog Institute all showcase how brands can integrate well being into an offering in an authentic way, and enhance brand value as a result. But when it comes to adapting and creating value, there are plenty of ways to get it wrong. Only recently, Bloomberg called this out in an article highlighting how disruptive startups and established brands, ranging from Casper to Colgate, claim to be unique in product, groundbreaking in purpose, and singular in delivery — and do the exact opposite in their messaging and delivery. So how can retailers avoid going from brand to bland? When trying to adapt and thrive, brands need to build favourability and trust by inspiring a state of mind in the customer, creating a sense of intent and original purpose behind the company and offering, and convey a confident spirit of individuality in brand strategy, product, and marketing.