BEST PRACTICES TO SURVIVE A CRISIS, PART 2: FOCUS ON BRANDS
2020 . 05 . 05 |
Since the world shut down a few months ago, brands have been faced with numerous challenges that shake the core of their existence. There are some tactical measures that can be put into place to mitigate the impact of the crisis and to emerge better positioned to deal with an uncertain future. In our ongoing series on Best Practices to survive a crisis, this article covers specific actions brands can take to weather the pandemic.
GLOBAL BRAND STRATEGY
Analysts agree that it is prudent to expect the disruption of “normal business” to continue until at least mid-2021, and even then the new normal will still be evolving. Wise brands will use this time to reassess all strategies and sort them to determine which ones are still relevant, which ones are wrong and which ones are in-between. Big picture assessment needs to consider:
• Overall business: are your priority growth markets still performing or will they be among the ones bouncing back? Do you need to course correct based on current economic conditions?
• Product portfolio: how did the core perform during lockdown? Can you rebuild demand for bestsellers that consumers may have held off from buying? Will you prioritize premium priced lines or promote those at lower price points? Is your offer suited to your points of sale?
• Retail partners: do you need to reconsider distribution? Are any retailers closing or going through bankruptcy? What eCommerce sites are working well and will continue to grow? Is it time to leave wholesale and go direct-to-consumer (DTC)?
• Vision: are you only planning to rebound or to grow long-term? Seize the moment while looking to create steady growth in line with multi-year goals.
• Budgeting & Forecasting: clearly, comparing this year to last year is no longer valuable. Looking at orders and sales day by day and week by week will allow you to define new trends and spot potential options to exploit.
Everyone has to take it one day at a time now but think tactically and use this lull to figure out how to create a business opportunity from a disaster.
Now more than ever is the time to finetune brand positioning by identifying the target customer and being sure all touchpoints are fixedly directed to them. Who you are, what you offer and why you are unique must be clear in all you do. Know your competition, their strengths and weaknesses vs your own – do the research now if you don’t know. Realize that consumers continue to monitor how brands behave, how they pivot production from non-essential to essential products, how they treat their employees, how they show compassion. Shoppers will reflect and think seriously before spending. Ultimately, they will buy the brands they trust and the ones they feel good about.
Two recent events come to mind. While big groups converted fragrance production to hand sanitizer, smaller brands, including the House of Sarah Baker, also jumped on the bandwagon and showed their support for the cause. Many c-suite executives took pay reductions, but Huda Beauty founder Huda Kattan and her family decided to forego their salaries for the rest of the year to protect their employees. Granted Ms Kattan is a multi-millionaire, but her action stands head and shoulders above equally seated CEO’s. The bottom line is, doing the right thing in a global health crisis could attract new consumers to a brand who demonstrates ethical and innovative ways of approaching the crisis.
Let’s also reconsider luxury positioning. The connotation with luxury goods is that they are self-indulgent and extravagant. There will always be consumers who want to treat themselves, but they may wish to be less conspicuous when most of the world is living through economic difficulties. Understated brands that are discreet with an emphasis on classic, artisan craftsmanship may be the winners. It’s not time for bling on packaging. It could also be opportune to incorporate the concept of wellness into your positioning, even collaborating with a high end but low-key spa who will certainly be looking for ways to reconnect with consumers.
Apply the old adage of “When life gives you lemons, make lemonade”, by using this time to reassess the entire product portfolio.
• Are there potential line extensions or innovative developments that could give new life to bestsellers?
• Can you create self-care coffrets that would correspond to socially distanced gift-giving? Are there any products in your lineup that may sell well in larger sizes, encouraging people to stock up? Can your packaging convey whimsy and happiness to bring some joy to the consumer who buys it?
• Speak to suppliers about options to go greener, to reduce packaging and to move towards sustainable alternatives.
The downtime can serve you to improve your assortment while continuing to deliver what your customers love.
DIGITAL COMMUNICATION STRATEGY
The digital age has allowed consumers to be in constant contact with their favorite brands. Even before COVID-19, it has been clear that when it comes to having a digital strategy, it’s do or die. It’s crucial that you plot out your communication to stay top of mind and keep your consumers engaged over the next few months while ensuring there is balance between selling and lifestyle. Here are a few winning strategies:
• Review your content plan. Is pre-prepared content still correct in tone, message and timing? Does it correspond to what your customer wants from you now?
• Engage by inspiring, educating, and entertaining. This will help build valuable emotional connections with your consumers.
• Collaborate with like-minded people or brands who are in line with your values and co-create an atelier, a video, a discussion. Talk with creatives about how they are coping with confinement, the importance of staying at home, what they miss most and what plans they have for the future.
• Be in direct contact: host an online focus group with top customers to find out what’s on their mind and how you can help. Or do an online survey. Instagram and Facebook stories will get you informal and rapid feedback. This allows the consumer to join the brand instead of just buying from it. Knowing the audience and the expectations will allow you to tailor your messaging accordingly.
• Live-streaming and IGTV are popular ways of connecting to consumers. The niches fragrance brands ExNihilo and Essential Parfums have hosted a series of live interviews with their perfumers on Instagram. This glimpse behind the scenes builds a positive relationship with the brand which will last beyond lockdown.
Conversations on digital platforms are now changed forever. Brands are going to have to adapt or get left behind. The winners will use the digital space to increase awareness, to peak interest and create curiosity, driving the consumer to online or, post-crisis, in-store, to learn more.
And this leads us to the last piece, what will happen at retail. Take advantage of this lull to conduct market research and to prepare a complete retail strategy. Develop a retailer ready digital package that includes everything to put your brand online: content, storytelling, photography, videos, SKU specifics and periodic updates. You can’t rely on the retailer to do this for you, so be proactive and make it easy.
With Saks Fifth Avenue, Neiman Marcus, Lord & Taylor, Debenham’s, and Galeria Karstadt Kaufhof all teetering on bankruptcy, with Macy’s looking to unload Bluemercury, know what liabilities could face you. As more stores are forced to shut their doors, it’s likely we will see deep discounting, which could harm luxury in the immediate future. Look to build long-term with strong retail partners who will survive.