Traditional routes to market are serving big brands less well by the day, as social media enables smaller rivals to connect with customers. And with Covid-19 accelerating that shift, time is running out to move from playing in easy to hard mode, writes Mike Foster, founder and creative director, Straight Forward.
Life used to be simple for the biggest brands. They developed new products, built demand for them through television advertising, and then sold them through large retail partners such as supermarkets. Each group supported the other – and smaller competitors didn’t get a look in because they couldn’t afford to be on TV and didn’t get shelf space in stores. You might call it playing in easy mode.
Unfortunately, easy mode no longer gets results. The arrival of social media has spoiled the big brands’ party. Targeted ads allow the smallest brands a means through which to connect directly with customers and build a base. Social media makes it possible to target even the tiniest market niches with efficiency and precision. The old adage of 50% of advertising works we just don’t know which 50% is no longer true.
The result is that big brands are watching smaller competitors and new entrants nibble away at their market share. Their tried and trusted routes to market are coming up short. TV advertising is a blunt instrument at the best of times – and the world of multi-channel, non-linear TV only makes it blunter. Supermarkets are warming to the idea of working with smaller brands with loyal followers.
Some big brands are responding accordingly – they have switched to hard mode. Nike is one great example. In recent times, it has pulled much of its product range from third-party outlets, instead selling direct through a network of its own stores and online. It has also found new ways to build more personal relationships with its customers. Its Nike Training Club has effectively become a community of brand advocates. It maintains an engaging and connected social media presence. Hard mode may be more work, but it gets results – sales have increased, market share is on the rise.
However, many other biggest brands are still playing in easy mode. Performance is deteriorating because they have lost both the physical availability they once enjoyed in stores and the mental exclusivity they had with customers for whom TV advertising was the only marketing they consumed.
The solution is deceptively simple. Big brands must follow Nike’s example and switch from easy mode to hard before it is too late. And it will be too late sooner than you think: the accelerant effect of Covid-19 is everywhere to be seen; data from McKinsey shows that most categories have seen more than 10% growth in their online customer base during the pandemic, with many consumers planning to continue shopping online, even as physical stores reopen. Easy mode is over.
How, though, to make the shift in practice? Well, just copying Nike likely won’t work – every brand must play to its own strengths (and avoid its weaknesses). Instead, think about the glory days of physical and mental exclusivity – how do brands ensure their products remain easily available and front of mind in this new world?
The rise of ecommerce platforms such as Shopify might help with the former, for example, but so too might bricks and mortar stores. Emotionally connecting to customers, meanwhile, means getting into their hearts and heads via new mediums, with a compelling brand narrative creating meaningful connections to ensure long-term growth.
How we can help
At Straight Forward, our breadth of experience supporting brands puts us in an ideal position to help you work through some of the issues you’ll face. Here are some things to think about:
- Which ecosystems can you leverage – who are the partners you work alongside in today’s more complex markets?
- Is your back-end process up to scratch – can you provide an experience that keeps customers coming back, once they’ve found you in the first place?
- How will your intangible voice get heard – do you know what it is about your brand that sets apart?
Don’t be afraid to build on what you already have. Chances are that you have already started playing hard in lots of different ways. Now is the moment to step it up another level.
